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Retailers are laying the foundations now to leverage some of the e-commerce and social media aspects... Michael Niestroy, CIBER

(retail), believes this is driven largely by the changing behaviour of customers, and what he calls the mobile revolution. “The business will always be connected, and they have different channels they can use via mobile. There has to be a new way of interacting, and in that regard we will see completely new patterns,” Gruler says. “The other trend is globalisation – many retailers do go global, but at the same time, they need to be clear on what is happening in the local space as well.” Niestroy says we are not necessarily seeing the trend to mobility coming out strongly overseas replicated in Australia – yet. “It is definitely hot on the agenda for some of the retailers. However, in most cases, they need to have an e-commerce platform or system in place, which not many of them have,” he says. Major players such as David Jones are looking to rectify this situation, with the department store giant recently releasing an RFP for the commissioning of a new e-commerce platform – two years after they decided to get out of e-commerce. Niestroy attributes this resurgence in interest in this space to a recognition of Australia’s position as three to four years behind the rest of the world. “The e-commerce percentage in Australia at the moment is about 3 per cent, whereas in Europe and the US it is 8 and 10 per cent respectively, so there is a huge market being unexplored at the moment by some of the local retailers,” he says. “That money, because of the strength of the Australian dollar at the moment, is being exported.” For this reason, Niestroy says all of CIBER’s retail customers are looking at some form of e-commerce system – whether that be with SAP or another vendor. “I think they are laying the foundations now to leverage some of the e-commerce and social media aspects that will be relevant in three to four years’ time because consumers are asking for it,” he says. Efforts to use mobility in the retail space are considerably more advanced overseas, however, and Gruler cites an initiative by large French retailer Casino Group as indicative of how the world will change with mobile. Currently in the prototype phase, Casino Group’s SAP system allows shoppers with loyalty cards to be identified as customers, with personalised offers sent directly to their

smartphone, based on the information they have provided to the retailer about their preferences and shopping habits. “For example, if they only want to buy fat-free foods or support fair trade, we can have offers which cater to that customer. These are elements which are supporting a dialogue with a consumer, which is where the mobile revolution really starts,” Gruler says.

Choosing the channel With multichannel or omni-channel retailing gaining momentum, the rules of the game have changed in the last year, according to Gruler. “The next generation of consumers are not playing by the traditional rules – they don’t need to go to the shops and buy what’s available. They can choose the channel, they can choose the time they want to buy, they can choose the combination of things they want to see, so that brings the retailer a lot of new opportunities, but at the same time, they need to be ready to react to those challenges,” Gruler says. He says SAP provides a good platform to base a multichannel retailing strategy upon, particularly when the power of in-memory technology is leveraged. All the information required about product information, stock and sale data, and even product pictures, can be easily stored in the one repository, and utilised by each channel. “Based on that, you are relatively independent of what channel is being used. That is very much the strength of SAP – we can optimise a demand-driven supply chain, necessary to support personalised offers, and we can understand what the consumer really wants at what time and which quality, so we can deliver at exactly the right time at the right store to exactly that consumer,” Gruler says. SAP is also looking at how it can assist retailers with a cloud-based offering, either for large retailers which need support for subsidiaries, or for particular applications, such as the social media area.

Marketing in a social media world Also to be considered when looking at how to leverage technology, according to Gruler, is just how networked the consumer is through social meda. “He is giving feedback to the retailer, and at the same time, he expects something back from them, so therefore he needs to be immediately gratified for what he is doing. He 21

Inside SAP Winter 2011  

All the latest on SAP in Australia and New Zealand.