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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:

Fig.1: SAP & Hybris Retail Omnichannel Commerce – Reference Architecture and Innovations

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 five key SAP components:

Quicklinks to chapters below:

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.

SAP Hybris Commerce Suite as “Digital Commerce Hub”

The SAP Hybris Commerce Suite is THE central platform that drives and manages digital commerce channels within an SAP Retail 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 Retail 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 powered by the Hybris Commerce Suite PLatform, 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 for master data, order documents, etc. SAP Retail specific master data types are covered by Add-Ons, the so-called SAP Hybris Commerce, integration packages 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 Data Hub 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 SAP C4C) resp. SAP Master Data Governance.
  • 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 merchandise category hierarchy.

SAP Hybris Marketing (yMKT)

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

In summary it is SAP’s new Marketing Suite, which was rated a “Leader” in the 2016 Gartner Marketing Resource Management (MRM) Magic Quadrant research report. SAP Hybris Marketing is rated as one of top three vendors in the ability to execute in the MRM Magic Quadrant.

The key is the central repository within SAP Hybris Marketing, which is designed to collect marketing relevant 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 can feed SAP Hybris Marketing with transactional and master data like product data, customer data, orders, sales organization, merchandise category assignments etc.

In the near future, SAP Hybris Marketing will be able to 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.

Two Hybris Marketing applications are especially relevant in SAP Retail Omni-Channel 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 and just recently also offer 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, order history, social media activities, customer master data, clickstream analysis results, wishlists, … , see the chapter below.

 

Please note:

SAP Hybris Marketing is 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.

26-10-2015 16-20-08.png

This happens in detail:

Design time

  • At design time target groups are defined in yMKT Segmentation, and so-called “campaigns” are created based on target groups with an added time stamp/validity period. So an campaign 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 campaign(s) into Hybris WCMS.

Run time

  • At runtime an anonymous consumer browses the webshop. Hybris WCMS calls yMKT Segmentation for campaigns 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 campaign(s) the consumer is assigned to.
  • Hybris Commerce applies whatever was defined at design time in WCMS for the given campaign(s).

This schema is also applies to the Hybris Marketing Recommendation to recommend context specific products resp. offers, determined by HANA powered predictive algorithms. WCMS uses the information provided by SAP Hybris Marketing to maximize the personalized customer experience at the digital shop-front.

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Read more:

SAP Customer Activity Repository (CAR)
SAP CAR is the central Retail planning platform genuinely designed for and built on SAP HANA.

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

SAP 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 implementation.

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

26-11-2015 10-34-54.png

 

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

Find detailed blogs about Omnichannel Commerce innovations here.

Stay tuned for updates of this blog.

Enjoy,

Ingo

Dr. Ingo Woesner
Global Director
Product Management Retail Omnichannel
SAP SE
ingo.woesner@sap.com
www.sap.com

Follow me on SAP Community Network and LinkedIn

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4 Comments

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    1. Achim Becker

      Hi Vladislav,

      the algorithms used in hybris Marketing Recommendation are using PAL under the hood or are essentially HANA stored procedures which are more SQL like (think of TOP-N). We’re also planning to integrate APL based capabilities for further investments. The way how algorithms are built into the models also allows for strong extensibility if you have some on your own.

      hybris Marketing Segmentation is building on PMM (predictive model mgmt in hybris Marketing), which in turn is integrating to PAL or APL based algorithms. Obviously completely different algorithms, because the problem space in business perspective is completely different.

      regards

          Achim

      (0) 
  1. Peter Pfitzner

    Hi Ingo,

    thanks for this quite useful article.

    One thing I noticed: Aren’t ‘initiatives’ in Hybris Marketing called ‘campaigns’ for quite a while now?

    Thanks,
    Peter

    (0) 

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