Offer Recommendation for SAP Retail Omnichannel Commerce

Dear Retail community,

The all-new Offer Recommendation feature was first released in February 2016 as part of the SAP Hybris Marketing 1602 release and was further refined and extended in the meantime.

Read what’s in for SAP Retail Omni-Channel Commerce.

What is Offer Recommendation?

Offer Recommendation picks for every consumer, in every sales channel and in every moment the best of all thousands of available offers, based on behavior shown so far and real-time context.

What is NOT the goal of Offer Recommendation?

Offer Recommendation does NOT include the creation and the maintenance of an offer. This has to be done outside of Offer Recommendation. In an ideal SAP scenario, offers are created by Promotion Management Retail (PMR), an SAP CAR application, and replicated into Hybris Marketing’s central offer repository.

In addition to that, Offer Recommendation is also NOT in charge of displaying the offer in the respective sales channel (e.g. in the webshop). This is done by the respective frontend application, for example Hybris Commerce WCMS for digital commerce channels, but can also be displayed e.g, in personalized marketing emails, …

Scope of Offer Recommendation

• Define, maintain, and manage promotional offer recommendation scenarios and models
• Create rules for selecting the most suitable promotional offers from the database accessing offer and customer attributes and context data
• Compose these rules from simple to understand rule fragments using a graphical rule editor
• Preview recommendations returned by a offer recommendation model
• Provide context-aware personalized offer recommendations to multiple sales channels

Logical Offer Structure in Offer Recommendation
Eligibility

• Static Boundary Conditions: Who is potentially qualified to get the offer, e.g.
  • Date/time in offer validity timeframe (from/to date and time)
  • Customer belongs to target group
  • Customer shops in location „store X“
• Contextual Conditions: What does the customer have to do in the respective situation in order to get the incentive, e.g.

• Buy X of product ID or product category
• Buy X of category or category hierarchy
• Present ID (e.g. loyalty card, employee card, student)
• Show coupon
• Shopping cart value < >, between <low>, <high>
• Scales of quantities

Incentive

What will the customer get, e.g.

• % on product, category, shopping cart value
• € (absolute value)
• Coupon
• Loyalty points
• Free service (e.g. free shipment)
• Incentives can be combined
  
  Offers can also be without incentive (“incentive less”). This is the case when Marketers want to bring certain product(s) to the awareness of the customer in order to push sales (notion of offering)

Conceptual Approach

Offer Management (handled outside of Offer Recommendation, e.g. in SAP CAR, SAP IS Retail, …)

• Create and maintain offers; manage offer portfolio
• Define: Eligibility and Incentive
  • Eligibility: Who is qualified to get the offer (static boundary conditions); what does a customer have to do in order to get the incentive (contextual conditions)
  • Incentive: What will the customer get
• Add digital marketing content

Offer Recommendation: Recommend optimal offers; learn and adapt; measure and provide insights

• Select the relevant offers based on context (validity; conditions)
• Identify the best offer
• Learning based on customer behavior (interactions)

What is a Promotional Offer?

A promotional offer is a conditional promise by a seller to selected consumers potentially in combination with an incentive. Here some examples:

• “If you buy product A and B today, you get 2$ off on product B”
• “If your purchase total is above 100$, you don’t pay any shipping costs”
• “If you buy one item of category A and 2 arbitrary items of category B, you’ll get 500 loyalty points”
• “If you buy a product of category A and show coupon with coupon code ABC, you’ll get 2% off on your purchase”
• “If you’re member of target group “young urbans” and buy a pair of trousers, then you’ll get 15% off on trousers”
• “If you buy this cell phone together with mobile contract, you will get a 10$ coupon for your next purchase”

It is also possible to use an Offer Recommendation without an “IF” condition, just to highlight an incentive.

• Free shipping this week
• 5% off on Pet Food – Only Today !!!

The other was around works as well, which is then a marketing message without an incentive, just to push marketing messages:

• Try our famous ice cream ! Now also available in low fat!

Depending on industry there’re just a few hundred or even a few thousand of such offers valid for right now in your offer base. And similarly many just a few days later, but different ones. And offer recommendations picks the most relevant offer in any given situation in real-time.

And that’s what you want to be: Relevant to your consumers. Always.

Manage Offer Recommendation

With the help of the Manage Offer Recommendation application, the Marketer is able to provide context-aware personalized offer recommendations to the customer in multiple sales channels. In Offer Recommendation, the Marketer can define, maintain and manage promotional offer recommendation scenarios and offer recommendation models.

The Marketer creates rules for selecting the most suitable promotional offers from the offer database, based on the respective contextual situation. These rules are composed in Offer Recommendation with easy to understand rule fragments, using a graphical rule editor. A rule fragment is a pre-defined expression that is used to select, re-rank, or filter a data pool. Before activating a recommendation model, the Marketer can also preview the recommendations returned by an offer recommendation model.

SAP Hybris Marketing Recommendation comes out of the box with many rule fragments. In addition to that there is also an extension concept in place, so customers can add new rule fragments. In addition to that preconditions like e.g. target groups can be defined, and like this target group specific recommendation models can be build. Examples for a rule fragment are “choose offers including the currently viewed product” or “choose offers including the specific offer ID 1234” or “choose offers for target group young urban families”.

Within the “Manage Offer Recommendation” application, the Marketer can use a model management view with which he can easily browse recommendation models, search for specific recommendations models and can easily add new recommendation models. Also he is able to toggle between the list of offer recommendation scenarios and offer recommendation models and like this can quickly locate a model or a scenario on which he wants to work.

The offer recommendations are determined in a rule based approach and can take any data into account available in the HANA database on which the SAP Hybris Marketing recommendation engine is running as well as the real-time context.

The recommendation application of Hybris Marketing can be called from ANY channel including web where we’re focusing on providing integration towards the Hybris Commerce Suite’s web content management system (WCMS). UI components managed in the WCMS can call the recommendation engine, allowing the recommended offers to be proposed in the consuming Hybris Commerce channels, e.g. a web shop basket. At the end of the day the recommendation can be consumed as well in channels that go beyond the web, like in-store service environments, point-of-sale assuming sufficient service time with the consumer, consumer mobile apps, call center, etc. – obviously preferably in SAP solutions, but eventually also from any third party shop / application.

Integration of Offer Recommendations with SAP Hybris Commerce Suite

The Recommendation application of SAP Hybris Marketing is well integrated with the Hybris Commerce Suite’s web content management system (WCMS), allowing the recommended offers (also possible for product recommendations) to be proposed in the consuming Hybris Commerce channels, e.g. a web shop basket, mobile app, kiosk, ….  This is described in more detail in this blog.

In this context I recommend to read the blog Personalized Customer Experience in Retail Commerce – A Delicate Flower

More information:

• Manage Offer Recommendations – SAP Help
• SAP-Hybris Commerce Suite Integration –
• Offer component documentation and source – configuration, extensions, AddOns for the integration and the component sources.

Enjoy,

Ingo

Dr. Ingo Woesner

Global Director, Outbound Product Management Retail Omni-Channel

SAP SE

ingo.woesner@sap.com

www.sap.com

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