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Five ways retailers can improve multi-channel operations with SAP
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S/4HANA provides a single source of truth and an end-to-end view of your business
Untangle supply chain complexities, enhance demand forecasting, fulfil online orders more effectively and increase store traffic
Create more enjoyable, frictionless buying experiences for customers
Retailers now have omnichannel options for consumers spanning multiple fulfilment methods. These options include same-day delivery, buy online/pick up in store (BOPIS) and kerbside pickup. How can retailers lean even further into this new omnichannel and multichannel era? A key component is connecting the systems that run in the background to put products in consumers’ hands with the operational systems that track sales, manage inventory and supply chains and keep fulfilment running smoothly and effectively.
SAP’s S/4HANA, (its enterprise resource planning system - High-performance ANalytic Appliance) provides a platform for an integrated supply chain tied directly to finance and accounting functions to provide a single source of truth and an end-to-end view of your business. This in combination with SAP Integrated Business Planning (IBP) can assist retailers improve multi-channel operations in five key areas:
1. Address inventory needs for different markets
In an omnichannel retail world, having inventory in the right place at the right time in the right quantities is table stakes. A clear path to achieving this is having access to quality master data.
SAP’s customer activity repository (CAR) gives retailers a 360-degree view of where, and how, customers are buying products. CAR — in combination with IBP — brings informed decisions utilising demand sensing infused with AI and IoT to understand the customer journey data. It can inform retailers on pricing and promotion decisions, and enable them to better assess fulfilment decisions.
For example, a national Outdoor retailer can look at the performance of inventory across each of its markets and see that keeping year-round swimwear options in its Bondi store in Sydney is a key sales driver, while opting for more traditional seasonal options in stores located where it snows in the winter. Based on the information that filters into the repository, retailers can also build specific assortments by store to help make sure they place the right products in the right stores and markets.
This helps address supply chain complexities and enhances demand forecasting with dynamic planning and forecasting.
2. Balance shipping costs across transportation modalities
To seamlessly interact with consumers across channels, retailers should work out transportation intricacies across fulfilment methods. Some factors include labour and the use of on-demand versus full-time staff, managing delivery frequencies and balancing varying transportation costs.
Using SAP’s transportation management system (TMS), companies can securely track their fleet and logistic flow throughout their network, regardless of size. It helps track how the business manages freight, fleet and logistics, and how companies can drive more sustainable goals and boost their return on spend and shipping across transportational modalities. How? By checking against availability of inventory, using the customer activity repository and then being able to source products from the right place, at the right time. When you combine this capability with IBP’s Supply Chain control tower, customers can detect disruptions and manage alerts, leverage AI to detect outliers in real-time and allow companies to be more resilient in disruptive market conditions. When items are delivered, customers can use TMS Intelligent Goods Receipt Analysis to expedite reading in delivery notes utilising Generative AI.
3. Fulfil online orders effectively and improve the customer experience
Retailers should also consider innovative technology to help increase the efficiency of multi-order picking by allowing pickers to fulfil multiple orders in one trip without revisiting the same aisle.
There are three SAP Fiori apps that can help with in-store and online order fulfilment:
Process picking request: Once a consumer places an order online (via an app or website), store associates are provided a list of each item to select and prep for customer pickup.
Handover orders: This app helps store associates identify the customer by scanning a barcode that is provided in a confirmation email or within a retailer’s app at the point of pickup to verify the order prior to handing the products over to the customer. The store associate would also be able to remedy any changes to the order and/or process payment.
Maintain picking sequence: Store managers can define the picking path, or route, within a store by arranging the sequence of each merchandise category to help manage the time for order placement to fulfilment. Store associates are provided a picking list that prioritises a specific route, i.e., start with the cereal aisle, then over to the produce section and, lastly, visit the dairy aisle.
What are the benefits of using these apps? Retailers are able to fulfil online orders more effectively, improve their customer shopping experience and potentially, increase store traffic.
4. Make physical stores work better for customers — and the bottom line
As e-commerce expands, what’s next for brick-and-mortar stores? To better match appropriate space allocation with in-store picking, you should analyse geographic location (rural vs. urban, for example), existing real estate agreements, allocation of floor pads, footprint enhancements and consumer purchase patterns.
Balancing the role of the physical store with customer e-commerce habits should ultimately inform the approach retailers take to store planning. For example, several big-box retailers allow users to build shopping lists online that enable them to find everything within their brick-and-mortar locations. SAP analytics, utilising SAP DataSphere and SAP Analytics Cloud, can help connect the dots between geographic locations and supply needs, so that when a consumer is either building a shopping list or creating a store order for pickup, inventory is shown in real time.
While reducing the friction of the store environment and setting up omnichannel touch points throughout the in-store experience, it can help solidify the unique role of the store.
5. Anticipate customer needs across channels
Creating an enjoyable, frictionless buying experience is job one for retailers these days.
SAP’s CAR can help customers see what is available online for immediate shipment to their home or for pickup at the closest store. CAR can help improve inventory accuracy via various channels, as well as tracking multichannel sales, replenishment planning, assortment planning, allocation and promotion management, and omnichannel pricing.
A clear view of sales by channel helps retailers better understand changes in item availability — and can help inform sourcing decisions to stave off shortages of popular items.
Adding SAP’s omnichannel article availability and sourcing (OAA) solution into the mix can help connect the overall sales and communication channel. This can help the store's point of sale (POS) system to perform a real-time inventory check to determine where to find items for click-and-collect orders; allowing customers to order online and pick up at a physical location, be it a store, a distribution centre or directly from the vendor.
Customers can then decide whether to have the item shipped or order it online for in-store pickup. With the on-shelf availability (OSA) dispatcher, retailers are able to integrate out-of-shelf detection.
This allows stores to gain insight on what's available on the shelf and if there's going to be an issue or an out-of-stock situation. OSA looks at the points of sale that are occurring and, using an algorithm, stores are able to anticipate an out-of-stock situation. Using this forecasting and replenishment system based on the sales for a week, it can anticipate when an item will likely be out of stock.
This is an abridged version of an article that originally appeared in PwC’s TechEffect. If you would like to learn more about how to use SAP’s S4/HANA in Australia, please contact Nicholas Nicholaides.
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