SAP Retail Omni-Channel Commerce - Components and Scenarios

Dear Retail community,

In my previous blog I have outlined how paramount an omni-channel strategy for retailers is. See also the publication by McKinsey about the need to go Omni-Channel.

Now I would like to dive into the SAP components retailers can use to build SAP Retail Omni-Channel Commerce scenarios, and describe their role, capabilities and integration in more detail.

Instead of creating an all-new solution from scratch, SAP rather leverages the proven capabilities and special powers of existing SAP components, and composes them together in an Omni-Channel reference architecture as seen below. Based on these components we invest in innovations, new capabilities and integration:

In the following chapters I would like to describe the scenarios and data flow between these main components. This should be a high level reference recommendation for your orientation.

SAP Retail Omni-Channel Commerce scenarios are based on four key SAP components:

• SAP Retail Core Merchandising (IS-Retail)
• SAP hybris Commerce Suite
• SAP Customer Activity Repository (CAR)
• SAP hybris Marketing

supported by optional components

• SAP POS by GK
• SAP hybris Profile
• SAP CRM or SAP Cloud for Customer
• ...

For now I will concentrate on the key components:

Each key component has its special role in the omni-channel landscape, which stretches well beyond pure commerce scenarios.

hybris Commerce Suite (yCommerce) as "Digital Commerce Hub"

The hybris Commerce Suite is THE central platform that drives and manages digital commerce channels within an SAP omni-channel landscape. The data and processes required by hybris Commerce are hereby retrieved, connected resp. aggregated from backend system(s), e.g.

• SAP Retail Core Merchandising (IS Retail)
• SAP Customer Activity Repository (CAR)
• SAP hybris Marketing
• Loyalty Management
• 3rd party systems
• …

This makes the hybris Commerce Suite THE DIGITAL HUB in an omni-channel landscape, providing backend data and processes to the digital shop-front in a transparent, flexible and highly adaptable way.

In an ideal SAP Omni-Channel Commerce landscape, all digital channels are managed by the hybris Commerce Suite, which provides data (products, prices, promotions, stock level) and application logic (order creation and status, account data, ...) to the individual digital channels.

The hybris Commerce Suite is well integrated with SAP ECC and SAP IS Retail for master data, order documents, etc., and SAP continues to invest in an even deeper integration, e.g. with the SAP hybris Commerce, integration package for SAP for Retail.

The Online Documentation for the SAP-hybris Commerce Integration resides in the hybris WIKI, which however is restricted to hybris license customers and partners only.

SAP Retail as Central Core Merchandising system

SAP Retail is the central merchandising system (ERP) as we know it.

In the given SAP omni-channel scenario SAP Retail is the leading system for product master data and prices.

As such it provides the following data to the hybris Commerce Suite:

• Article master data, characteristics, classes
• Stock inventory data
• List prices, promotion prices and bonus buy conditions

This master data is transferred from SAP Retail via the hybris DataHub interface (as XML based iDocs) to the hybris Commerce Suite database.

Within the hybris Commerce Suite this SAP master data is used to

• Build product catalog(s), which are tree-like hierarchy structures of sales categories and promotion areas. This allows a user to browse and navigate in shop categories
• Build a search index(es), allowing users to perform searches within a digital channel
• Display product/price/stock inventory at the shop-front of the digital channel(s)
• ...

In the recommended SAP omni-channel scenario the hybris Commerce Suite is responsible for

• B2C user registration, user management and consumer master data creation
• Order creation

Consumer data records

• are created in the hybris Commerce Suite. So a consumer can register and login with user/password completely within hybris Commerce Suite, change the address afterwards etc. However, hybris Commerce is neither a CRM system for managing customers, nor a governance system to harmonize and distribute master data across the solution landscape. This is the role of a CRM system (SAP CRM or C4C) and MDG.
• The consumer data record can optionally be transferred to the SAP IS Retail system via iDocs. Otherwise a CPD customer is used for the sold-to party in order documents.
  • Please note
    For omni-channel purposes it is strongly recommended not to use a CPD "dummy" customer ID, but to transfer and create real consumer data records in IS Retail/ERP, to have it available e.g. in Master Data Governance solutions, for reporting and for SAP Financials Management, just to name a few.
    From IS Retail the customer ID should also to be distributed to CAR (for omnichannel transaction history), and to hybris Marketing (for 360 degrees view of the customer and for a personalized marketing,
    
    
• In addition, consumer data records can also be replicated from hybris instantly to SAP Cloud for Customer, to allow a C4C based service management. This feature was introduced with hybris Commerce Suite 5.7.

Consumer orders

• are created by and in the hybris Commerce Suite (based on the Asynchronous Order Management scenario) and are stored in the hybris database.
• Then hybris order documents are replicated to a connected SAP ERP or IS Retail system.

As outlined above, the hybris Commerce Suite is well integrated with SAP ECC and SAP IS Retail for master data, order documents. An SAP Retail Industry Integration AddOn for hybris Commerce is available, which supports to transfer and use Generic Articles in hybris Commerce as well as merchadise category hierarchy.

SAP Hybris Marketing (yMKT)

SAP Hybris Marketing is SAP’s Marketing Platform, based on the formerly known SAP CEI, enriched with SeeWhy capabilities as well as marketing planning and execution applications, just to name a few.

The key is the central repository within SAP hybris Marketing, which is designed to collect marketingrelevant data from all possible systems, applications and angles,

• ERP('s)
• digital channels
• CAR
• PRM
• CRM systems
• loyalty management solution(s)
• 3rd party systems
• social media networks
• market research data (e.g. AC Nielsen, IRI)
• geospatial data
• etc.

For example, SAP Retail feeds SAP hybris Marketing with transactional and master data like product data, customer data, orders, sales organization, merchandise category assignments etc.

In future, SAP hybris Marketing will use customer profile information collected by the new SAP hybris Profile solution, which holds the complete customer profile across the pillars marketing, sales, service and commerce.

For example, SAP Retail feeds SAP hybris Marketing with transactional and master data like product data, customer data, orders, sales organization * merchandise category assignments etc.

Two yMKT applications are integrated with hybris Commerce:

• yMKT Segmentation defines and determines target groups and so-called "campaigns" (= target groups with a validity period, e.g. senior with dog, valid from Dec 1 to Dec 31, YYYY)
• yMKT Recommendation uses advanced predictive analytics capabilities to determine product recommendations at runtime, based on target groups/campaigns, but also personalized on individual customer data, transactions, social interactions stored in yMKT Marketing Data Mgmt,  , …

By integrating the hybris Commerce Suite with SAP Hybris Marketing, the Web Content Management Solution application (WCMS) within the hybris Commerce Suite can access SAP hybris Marketing at design time to define the rule-based behavior of a given digital channel by including target groups/campaigns well as product recommendations, see the chapter below.

In an SAP Omni-Channel scenario SAP hybris Marketing is co-deployed on deployed on SAP HANA in co-deployment with the HANA based CAR, to maximize application, hardware and infrastructure performance by shared database tables, e.g. for orders.

Please note: SAP Hybris Marketing even independent from an SAP landscape and/or SAP backend systems, and can run and thrive even in a complete non-SAP environment.

Integration of the hybris Commerce Suite with SAP Hybris Marketing

Hybris Marketing is already well integrated with the hybris Commerce Suite, or to be more precise: with the Web Content Management Solution (WCMS) within hybris Commerce.

When integrating the hybris Commerce Suite with SAP Hybris Marketing, the yCommerce's WCMS can access Hybris Marketing Segmentation at runtime to have it identify the target group/campaign(s) of a hybris consumer/customer.

This happens in detail:

Design time

• At design time target groups are defined in yMKT Segmentation, and so-called initiatives are created based on target groups with an added time stamp/validity period. So an initiative is a target group valid for a given period.
• At design time in hybris Commerce WCMS, rules and actions are defined. In case actions are defined using target groups, the hybris WCMS calls the yMKT Segmentation and copies the selected initiative(s) into hybris WCMS.

Run time

• At runtime an anonymous consumer browses the webshop. hybris WCMS calls yMKT Segmentation for initiatives even for unknown consumers, who still unveil some information like their browser and device, internet knot of dial in, product categories and searches the consumer performs , etc.

• As soon as the consumer identifies himself (cookie, login, registration) hybris WCMS calls yMKT Segmentation and retrieves the information, to which initiative(s) the consumer is assigned to.

• hybris Commerce applies whatever was defined at design time in WCMS for the given initiative(s).

This schema is also applied to the Hybris Marketing Recommendation, an yMKT application built to predict product id’s of recommended products based on the customer marketing profile data in real-time. WCMS uses the information provided by SAP hybris Marketing to maximize the personalized customer experience at the digital shop-front. These capabilities have been further enhanced in the yMKT 1508 release.

SAP Customer Activity Repository (CAR)

SAP CAR is the central Retail planning platform genuinely designed for and built on SAP HANA.

CAR has many tasks for Retail businesses, but let’s focus here on the omni-channel point of view:

CAR collects and analyzes customer activities (e.g. orders) from all channels incl. the POS channels. While POS receipts are processed within the CAR application “Sales Audit” (= POS Inbound), non-POS based orders are provided by IS Retail, which also includes orders originally created in hybris Commerce and replicated to IS Retail.

So CAR holds

1. the complete customer transaction history across all channels (=omni-channel transaction history)
2. precise stock inventory level of the physical stores (depending how quickly the POS systems send data to CAR)

While

1. CAR based customer transactions are integrated with hybris Commerce from 5.4+, to show the complete order history across channels in hybris Commerce based shops (in the hybris > My Account section),
2. store inventory information from CAR can be used e.g. to marry the physical channels with digital commerce, allowing to check inventory in store from webshops, click&collect (=buy online, pick up in store), etc.

This makes CAR the central in-store data hub for true omni-channel scenarios, bringing the physical and the digital commerce space together.

For performance reasons CAR is to be co-deployed with SAP hybris Marketing, allowing POS data to be included in hybris Marketing based product recommendations based on order history, and for a more precise target group/campaign assignment.

An hybris Marketing RDS for Retail is available providing CAR based SAP HANA content to be used in hybris Marketing, e.g. for using omni-channel transactional information and store related data in hybris Marketing Segmentation.

Make use of RDS packages for SAP CAR for an accelerated implementatoon.

Strategic Drivers

As stated above SAP leverages the proven capabilities and special powers of existing SAP components, and invests in innovations, new capabilities and tighter integration. Our strategic drivers are

• Product Data Quality
• Consistent omni-channel pricing incl. promotions
• Contextual personalization of product and offer recommendations
• Reliable inventory availability information for high-volume businesses
  
• 360° customer profiling and marketing planning and execution power
  
  

More details will be added on an ongoing basis, incl. C4C/hybris Commerce integration, SAP POS by GK, ....

Customers and partners with S-User can get a glimpse about the 2015/16 Omni-Channel roadmap in the Innovations section of SAP Service Marketplace
(use the search term "omnichannel commerce").

More information, figures, screenshots and links will be added to this blog as it becomes available.

Stay tuned for updates of this blog, and in the SCN space SAP for Retail.

Enjoy,

Dr. Ingo Woesner

Global Director, Outbound Product Management Retail Omni-Channel

SAP SE

ingo.woesner@sap.com 

www.sap.com 

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