RSR works a lot with the marketing organizations of technology companies, and we’ve seen some interesting (and occasionally humorous) attempts to say the same thing in a new and catchy way, or to introduce some new buzzword because the last announced innovation didn’t quite pan out. To protect the guilty I won’t highlight any of the attempts – you’ll just have to trust me on this. In the world of technology, it’s particularly bad, because words get abused. For example, the phrase “paradigm shift ” is forbidden (using it painfully reminds us all of the broken promises of the tech bubble in the early 2000’s). “Big data ” is in danger of the same fate, as is “cloud ” (one solution provider once declared to us that their solution had been “in the cloud ” since the 1980’s – I kid you not!).

Today’s overused buzzword is “omni-channel ” (or “omnichannel ” – believe it or not, there are very strong feelings about whether it’s a hyphenated word). I won’t belabor the merits of the word here (I’ve done that in prior Retail Paradox Weekly columns), but here’s the short version: I think the term continues to be useful because it frames a very important conversation throughout our industry.

SAP apparently isn’t worried about coming up with a new catchphrase to highlight its agenda for the retail industry. At the company’s annual retail forum last week in New York, the theme was, “Transforming To Thrive In An Omni-Channel Environment “. That isn’t all that different from earlier themes (eg. 2011’s “Connecting in a Network Economy “, or 2012’s “Retail Without Boundaries “), and neither was the underlying message.

Pat Bakey, SAP’s General Manager for Retail, reiterated SAP’s agenda for retail, “Simplify/Transform/Innovate “, in his keynote address. Pat focused his comments on three “disruption dynamics ” in today’s retail environment. Those are:

• The “Super-Aggregators ”
  • These are companies like Amazon, Ebay, and Alibaba: Pat pointed out that they use the power of information and technology to create new value, and that they are willing to try out a risky idea without fear of failure. His message: retailers need to learn to be more agile and learn how to “fail fast “. This message was further underlined by “Freakonomics ” author Steve Dubner, that in business the “3 hardest words are ‘I don’t know’ “, but that the biggest upside to the digital revolution is that it has “made experimentation cheap and easy. “
• The Consumer
  • Pat pointed to the power of growing global middle class, and that “digital natives ” use the Internet to “connect to each other “. This gets to the impact of “Community ” on retailers.
• Complexity
  • Pat’s comments were a reflection of SAP co-founder Hasso Plattner’s bold statement at this year’s SAPPHIRE event that “simplification beats complexity! “

Pat summed it all up by stating that “speed and agility drive differentiation. ” And that’s what SAP’s agenda for retail is all about.

Getting To Know Your Customer Better

SAP is driving steadily down the technology roadmap that it defined a few years ago, enabling its platform with HANA and CAR ( “Customer Activity Repository “), adopting a “mobile first ” user interface, making its solutions available via the Cloud, and promoting the use of “Design Thinking ” to encourage businesses to innovate with technology. But Lori Mitchell-Keller, global head of SAP’s Retail Business Unit, reframed the industry direction in a useful way, as a progression from “Omni-Channel ” to “Omni-Commerce “, and towards “Omni-Customer “. Here’s how she defined those terms:

• Omni-channel: most retailers are in this mode of operation – 85%, according to Lori. The consumer demand being met is “inform me “;
• Omni-commerce: about 8% of retailers operate in this mode. The consumer demand being addressed is, “I choose where and how I buy “;
• Omni-customer: about 8% of retailers are here. The customer is offered “a tailored shopping and delivery experience “.

All of this boils down to one thing, Lori stated: “getting to know your customer better “.

As for the progress on SAP’s retail roadmap, the company continues to deliver exactly what it said it would deliver, as its investments in the further enhancement of assortment planning with new store clustering and options planning capabilities demonstrate. Lori also discussed how integrated Brand retailers are adopting the SAP Fashion Management solution, a melding of SAP’s AFS and Retail platforms into one integrated suite. That’s a big win for companies that sell both wholesale to other retailers and run their own stores, and have had in the past to almost “pretend ” that their retail stores were just another customer to the AFS system.

A Cast Study: Me

All of this “enablement ” can sound a bit theoretical sometimes. But it turns out that I have a firsthand experience of an SAP-enabled retailer. I had the pleasure to moderate a panel discussion of the subject, “Optimizing the Customer Experience Across Channels And Devices “, and one of the panelists was Steve Fournier, the Chief Customer Experience Officer for Discount Tires, a privately owned U.S. retailer from Scottsdale, Arizona. We discussed my own “Discount Tire ” story. Here it is:

I own a 1978 Toyota truck, a real beater, basically a wheelbarrow with a motor. I use it for three purposes – to take yard debris to the dump, to go to the lumber yard, and to haul musical sound reinforcement gear around. Every gardener in town at one time or another has offered to buy the truck for $500 (about what its worth). On a good year I’ll put a couple thousand miles on it, and every year I have it checked over by my favorite mechanic. This year he called me and said, “Your tires are so old they are rotting off the wheels! ” Not worried, I got onto the website of a tire company that I know operates in my hometown, America’s Tire (a brand of Discount Tire). I easily found the tires I needed, and could see that there was a set available at my store. So I ordered them, and then the webpage took me to a scheduling page to have them installed. I picked the day and time, and all was good. I received an e-mail confirmation and thought no more about it.

On the morning of my appointment, I got a call from the store, confirming my appointment. Wow! This ain’t Nordstrom – I’m buying tires, for cryin’ out loud! At the appointed time, I drove to the store, parked in a spot reserved for “appointments “, went right in and handed over the keys. The rep said, “give us about 15 minutes ” – I was surprised, and said, “Take an hour, I’m going over to Pinky’s Pizza (around the corner) to have some lunch. ” But while I was there, I got a call from the rep, who said, “did you know you have a spare too? (I hadn’t thought about that). Your spare is so old that its made out of rubber – we’re thinking about putting into our tire museum. Would you like us to replace it? We have one for you. ” Deal done.

It was that easy. For those of us who have at one time or another waited in the lobby of a tire store, sometimes all afternoon, reading old Car & Driver magazines and drinking burnt coffee, this was definitely an improvement – and I’ll definitely be back. So I asked Steve about my experience, and he said, “We sell tires – you can get them anywhere at about the same price. But you came to us for the experience. ” And underlying it all is an SAP platform. It’s a nice story that puts all of this “enablement ” into context. I needed tires, but I got an experience.

Wrapping Up the SAP Event

At the NY forum, SAP steered clear of hyperbole; the company related progress against its roadmap, introduced some of its new customers, and encouraged all in attendance to continue on the path from “omni-channel ” to “omni-customer “. There were no bush-burning announcements.

From my point of view, SAP’s “big ” innovation is one the whole industry has already heard about: HANA and CAR. As I believed even before my time as a CIO, while processes and functions may change dramatically over time, if you’ve got the information “right “, you can be agile and change with the market and not after the market forces you to. That’s what SAP is enabling for retail with HANA and CAR. Perhaps the big announcement was that the software giant is doing exactly what it said it would do.