Earlier this month, the entire RSR team descended onto Dallas, TX, with several hundred other conference-goers to hear speakers at SAP’s Cx (Customer Experience) Innovation Forum. This is a new forum for SAP users, combining the perspectives of Retail, Consumer Products, and Wholesale. Past SAP events have focused on those verticals individually (RSR partner Paula Rosenblum covered the 2017 Retail Forum in this Retail Paradox Weekly column). The broadened focus makes a lot of sense, given the fact that in today’s retail ecosystem, where one partner “stops ” and another “starts ” is getting increasingly hard to discern. Just as an example, how product content is delivered to end-consumers from a retailer’s website can involve the real time participation of dozens – even hundreds – of trading partners.

So the focus is new, at least in the context of SAP’s user conference. But the idea of combining the three industry segments is something borrowed from the past. In fact, IBM used to call the combination of Retail/Wholesale/Consumer Products the “Distribution Industry ” – something that it abandoned in one of that company’s many reorganizations during the 1990’s. But it was a good idea then, and it’s a good idea now – all of these companies are supposed to work together with one objective – to get products into the hands of consumers.

Another thing that was new for this forum was the overt swing away from SAP content and towards industry speakers. Although we still got to hear about SAP’s retail roadmap from Achim Schneider (Global Head, SAP Retail Business Unit) and Kristin Howell (Global Vice President, Retail Solution Management at SAP), the organizers clearly wanted the audience to hear from SAP’s customers first and foremost.

Eight Disruptors

The event’s host, Matt Laukaitis, SAP’s SVP of North America Consumer Industries, kicked off the two-day event by giving a very brief overview of the theme ( “Optimize -> Extend -> Transform “), but quickly turned the stage over to John Phillips, Pepsico’s SVP Customer Supply Chain & Global Go-To-Market. John set the stage for the conference with what he declared to be the “8 disruptors that will transform your supply chain. ” Those eight disruptors are:

The Connected Home, IoT at Retail, Instore Robotics. Crowdsourced Delivery, Drones, Autonamous Vehicles, Virtualizing Expertise, and Artificial Intelligence.

The value of some of these disruptors is still rather controversial, but according to the speaker, each has the power to challenge our assumptions in fundamental ways. Here are some of the takeaways, from my notes:

“The connected home “: Phillips stated that there will be 13 billion connected devices by 2020, like connected home appliances capable of creating “very sticky behaviors “. An example that the speaker offered is a “smart frying pan ” from Pantelligent, something that connects via Bluetooth to an app that can guide you through a recipe (but! Is it dishwasher safe? Inquiring minds want to know!). A more down-to-earth example is the Amazon Dash device; some brands are already claiming 50% of their sales coming from Amazon Dash devices. And then there are those voice-activated devices from Amazon and Google, which make it very easy for home consumers to trigger replenishment orders for everyday items. And it didn’t take long for someone to figure out that there will have to be a “hub ” device that controls all of these IoT devices in the home, for example, Samsung, with its SmartThings smart hub.

“IoT at Retail “: perhaps unlike some of the front-edge innovations targeted for the home, the Pepsico executive described several use cases for IoT in the stores that are already being deployed across the industry. Those include digital cameras for planogram compliance and replenishment, smart shelf sensors (for example, like those being deployed at Amazon Go! stores), and beacons for asset tracking. Phillips called out Cincinnati-based supermarket chain Kroger for its “Edge “, a shelf-edge technology that digitally displays pricing and nutritional information, as well as video ads and coupons for various products. Soon, the company expects to be able to enable Edge to communicate directly with consumer mobile devices to highlight products that are on consumers’ shopping lists.

Instore Robotics: Mr. Phillips highlighted in-store robots that can scan inventory “to a 96% accuracy “. He specifically mentioned Walmart‘s Bosa Nova robots . The Bosa Nova isn’t another cute Pepper-like robot; it’s more of a retail-hardened device that operates at “level 5 autonomy ” (meaning, “full automation “). Retailers will be able to see the Bosa Nova at NRF 2019. According to the Pepsico exec, Walmart’s goal for the Bosa Nova is to “free up employees to do what they do best – to help customers. ” Will Walmart be able to resist the urge to cut labor from the stores? We’ll have to wait and see….

Crowdsourced Delivery: this is real now, with companies like Instacart, Shipt (now in partnership with Minneapolis-based Target), and Postmates, among others.

Drones: While it’s easy to pooh-pooh the idea of drones for direct customer delivery (I happen to live in a rural area, and people around “these parts ” joke that they are looking forward to the target practice), drones are already being deployed in warehouses. The most famous example is probably the Ocado “Hive “, a fully automated warehouse near London UK, that has also very recently been deployed in the U.S. by Kroger. But there are other drone tests underway, for example, Amazon’s Prime Air tests in Oxford UK (watch this video). And finally, Phillips mentioned autonomous vehicles, such as those being tested by Starship Tech (watch this video). According to the speaker, the objective of all this automation is to reduce the cost of direct delivery by 80-90%.

Virtualizing Expertise: Again, this is real now. For example, Scope AR uses a combination of augmented reality and humans in a call center to assist remote technicians (watch this video).

Finally, there’s AI technology, something that we’ve all heard a lot about in the last two years, that is being used by many top line retailers to “unlock unstructured data ” to glean new insights. But Mr. Phillips pointed to an AI-enabled consumer mobile app called Snap. Find. Shop, currently being deployed by upscale retailer Neiman Marcus. The mobile app makes it possible for consumers to snap a picture of a product, find its equivalent in the Neiman Marcus catalog, and buy it. Here’s a video of the app in action.

So Much More

There was a lot more at the SAP Cx Forum – far too much to cover in this column. It was refreshing to hear from both customers and prognosticators. And I also enjoyed getting outside of the boundaries of “retail “, to be able to hear how the other players in the retail ecosystem are focusing their efforts towards our common goal. But it’s also good to hear from the SAP software developers themselves. After all, their company is spending millions developing solutions to address a probable future. We need to hear it all.

That was a lot to pack into two days – I hope SAP does it again next year.