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Last update: Dec 4, 2017

Dear SAP Retail Community,

The new SAP Omnichannel Promotion Pricing (OPP) is a true “omnichannel” innovation.

Based on SAP CAR’s Retail Applications Bundle it ensures correct and consistent effective sales prices and cart values across all sales channels along with the ability to introduce new pricing rule types with low implementation effort, which then become effective across all sales channels almost immediately.

But let us start from the beginning.

Typical Situation in Retail Sales Applications

A typical retailer has plenty of systems in place to calculate sales prices, e.g. SAP ERP systems, POS systems, web shops, mobile apps, CRM, etc.

Each solution has its own price basis (let’s call it “repository”) and its own price calculation logic (let’s call it “pricing service”):


Fig.1: Typical situation in retail IT sales applications as of today.

This multitude of pricing tools often leads to price inconsistencies in the various sales channels. Even worse, promotional offer types and rules are not fully and consistently supported across all sales channels.

This leads to massive development and test efforts, to get things “quasi-consistent”:

  • When introducing new promotional offer types and rules, retailers have to change the coding in each of their sales applications. This can take weeks and months.
  • Even when retailers have implemented these changes, they can still not be 100% sure that the various pricing engines are applying promotion rules in a consistent way.

A whole family of mobile apps emerged because of this unfortunate situation, pointing consumers to such unintended “bargains”.When customers become aware of “better” prices, or find their fortunate bargain order rejected, a poor customer experience is the result. This has a profound effect on customers’ satisfaction and loyalty.

What is SAP’s solution for Omnichannel Retailers?

SAP Omnichannel Promotion Pricing (OPP), first introduced with SAP CAR 2.0 FP2, was designed to ensure correct and consistent effective sales prices across all sales channels, along with the ability to introduce new promotional offer types and rules quickly and with low implementation effort.


Fig.2: Omnichannel Promotion Pricing for SAP Retail

The value for omnichannel retailers is obvious:

  • Consistent price and promotion information available at all touch points
  • Faster time to market of new creative promotional offer types and rules
    designed by marketers
  • Increase revenue by higher customer satisfaction and loyalty
  • Save costs with low implementation and test efforts when introducing new promotional offer types and rules

Omnichannel Price and Promotion Repository in SAP CAR

A new Omnichannel Price and Promotion Repository in SAP CAR stores all relevant information needed to calculate the effective sales prices and cart value in all sales and communication channels.

This comprises regular sales prices as well as offers.

  • Typically, regular sales prices like sales list prices and sales net prices are calculated by the SAP ERP based SD pricing plus condition technique. These prices act as a “start” value for the new Omnichannel Promotion Pricing calculation.
  • Many offer types are supported, from simple discounts via Mix’n Match offers to offers which are combined with an incentive. Find details here.

So simply all price and promotional offer types and rule information that is needed to calculate the effective sales prices and cart value are centrally held in the Omnichannel Price and Promotion repository in SAP CAR and stored in the Demand Data Foundation (DDF).

Transformation of Offers into OPP Promotions

Promotional offer types and rules, simply called “offers”, are typically created in

After an offer has been created, it is transformed into a format that complies with the Promotion format of the Association for Retail Technology Standards (ARTS). The ARTS Promotion is a widely accepted standard for defining promotional rules.

An offer with this format is called “OPP Promotion”. An OPP Promotion is the runtime model for offers within the Omnichannel Promotion Pricing. The OPP Promotion was introduced to allow easier mapping of promotional rules for external consumers.

There is no application that allows the direct maintenance of “OPP Promotions”.

Omnichannel Promotion Pricing Service

In addition to the central repository, a new Omnichannel Promotion Pricing Service is introduced, which calculates the effective sales prices and cart value by using the price data stored in the Omnichannel Price and Promotion Repository.

The Omnichannel Promotion Pricing Service is a JAVA based SAP HANA XS Advanced application (XSA). Therefore the configuration of database service and back-end connection information is done during deploy time. Find more information here.

Excerpt: Offer Recommendation

Offers can not only serve for mere effective sales price calculations. Retailers can use offers to propose them as “incentives”, to encourage consumers to do something in order to collect the benefit.

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

The Offer Recommendation in SAP Hybris Marketing picks for every consumer, in every sales channel and in every moment the best of all thousands of available offers, based on the real-time context and matched with historical information.

However, Offer Recommendation does not include the creation and maintenance of an offer. In a SAP Retail Omnichannel Commerce scenario, offers are typically created in SAP Promotion Management for Retail (PMR) or in the Fiori app “Manage Promotional Offers”. After the creation these offers are replicated from SAP CAR into SAP Hybris Marketing, where they are used for Offer Recommendation.

The Recommendation application of SAP Hybris Marketing is well integrated with the SAP Hybris Commerce Suite’s web content management system (WCMS), allowing the recommended offers and products to be proposed in a web shop, mobile app, kiosk, etc.

More information about Offer Recommendation is available in this blog.
After this divagation with Offer Recommendation let’s come back to the Omnichannel Promotion Pricing and learn, how it can be deployed to the various sales channels and applications.

Deployment Options

A SAP Retail Omnichannel Commerce system landscape comprises various applications to address the individual sales channels. Some high volume sales channels typically run “standalone” and are only asynchronously connected to SAP backends, e.g. POS systems and commerce platforms. This independency allows them to meet mandatory performance and reliability requirements.

To meet the requirements of the various sales applications various deployment options are available:

A central Price and Promotion Repository in SAP CAR is mandatory for an Omnichannel Promotion Pricing scenario.

Optionally an extract of the central Price and Promotion Repository can be deployed locally to the respective sales application. To ensure consistency local extracts are periodically updated from the central repository (via the Data Replication Framework (DRF) with new iDoc types ROP_PRICE and ROP_PROMO).

This is depicted as the “Outbound” layer in SAP CAR (see also chapter “Focused Business Solution” below):


Fig.3: New Omnichannel Promotion Pricing with central and local deployment options.

The Promotion Pricing Service can be deployed centrally in SAP CAR, and/or locally in the sales applications. In contrast to the price repository, it is not necessary to have a central Promotion Pricing Service, but to totally rely on local pricing service(s).

Here some examples of typical deployment options. Each can be implemented independently per sales channel:

  • The web shop calls a local pricing service using a local price extract
  • A POS system calls a local pricing service using a local price extract
  • A mobile app calls the central pricing service using the central price repository

A local extract of the repository combined with the local deployment of the pricing service ensures correct and consistent effective sales prices even in asynchronously connected “standalone” sales applications, along with the ability to introduce new offer types with low implementation effort.

This allows high volume sales applications like POS servers in the stores and commerce platforms like SAP Hybris Commerce to avoid high data traffic (load, latency) in the network communication, and performance issues (speed) for the many concurrent users for a (remote) price calculation.

A hybrid scenario is also possible, where e.g. a web shop uses a central pricing service, while a POS solution uses a local deployment.

Make Pricing Fast!

The SD price condition technique in SAP ERP covers even the most complex B2B industry pricing requirements. In contrast, B2C consumer businesses typically need just regular sales prices, combined with a handful of promotional rules and offer types to calculate the effective sales price and cart value.

Omnichannel Promotion Pricing is consequently designed for B2C Pricing in consumer industries, which means high volume businesses with low pricing complexity.

Therefore the Omnichannel Promotion Pricing service starts the calculation with pre-calculated base sales prices, and applies the relevant offers. That’s it – fast and simple.

OPP in SD Sales Order

The central OPP Pricing service in SAP CAR can also be called from the SAP SD Sales order, from SAP ERP or SAP S/4HANA 1709. This allows the application of retail promotion types like mix’s match (bonus buy), time dependent promotions etc. for the first time in the SD orde.

The standard SD Pricing in the SAP backend is therefore bypassed and instead the OPP pricing in SAP CAR is called.

  • As of SAP ERP enhancement package 8 (SP06), you can integrate the central promotion pricing service into standard sales and distribution processes. For more information about the use of the promotion pricing service in SAP ERP, see https://help.sap.com/viewer/p/SAP_ERP<Version>  Application Help  Business Functions  Business Functions in SAP ERP  Enterprise Business Functions  Logistics  Trade  Retail, Omnichannel Promotion Pricing.
  • As of SAP S/4HANA 1709, you can integrate the central promotion pricing service into standard sales and distribution processes. For more information about the use of the promotion pricing service in SAP S/4HANA, see https://help.sap.com/viewer/product/SAP_S4HANA_ON-PREMISE/<Version>  Product Assistance  Corss-Components  Business Functions  Enterprise Business Functions  Logistics  Retail  Retail, Omnichannel Promotion Pricing.

What happens with all the other pricing engines? 

The Retail Pricing (“Handelskalkulation”) in SAP ERP and the price condition technique remain relevant, as they typically provide the regular sales prices to the central Omnichannel Promotion repository in SAP CAR. However, SAP ERP pricing does not affect the actual calculation by the new Omnichannel Promotion Pricing.

In SAP Hybris Commerce based sales channels, the genuine Hybris pricing engine will no longer be used in an Omnichannel Promotion Pricing based scenario. In that case the Hybris pricing engine is replaced by the Omnichannel Promotion Pricing service. The integration of Omnichannel Promotion Pricing with SAP Hybris Commerce is provided by the integration package for SAP for Retail from version 2.1.

Regarding POS solutions, GK Software intends to integrate the new Omnichannel Promotion Pricing service in an upcoming release of the SAP Omnichannel POS by GK Software, and to provide standard import capabilities of the extract from the central price repository in SAP CAR. Other POS vendors need to be implemented on project basis.

Accelerated Project Implementation

The new Omnichannel Promotion Pricing is part of the RDS Package for SAP CAR, as well as the Omnichannel Model Company.

Summary
The new Omnichannel Promotion Pricing ensures correct and consistent effective sales prices and cart values across all sales channels along with the ability to introduce new pricing rule types with low implementation effort, which then become effective across all sales channels almost immediately:

  • One central offer maintenance
  • One central price and promotion repository
  • Identical price calculation logic in all sales channels
  • Different deployment options (central, local, hybrid)
  • Extensibility concept – easily extensible by SAP customers and partners
  • Faster time to market of new creative promotional rules designed by marketers
  • Save costs due to low implementation and test effort when introducing new offer types and bonus buy rules
  • Increase customer satisfaction and customer loyalty
    by having consistent price and promotion information at all touch points

Minimum System Requirements

The SAP Omnichannel Promotion Pricing is located in SAP CAR Application Bundle and integrates with SAP ERP Retail and SAP Hybris Commerce. The standard integration with SAP Hybris Commerce is provided by the SAP Hybris Commerce, integration package for SAP for Retail.

Depending on the leading SAP CAR release the SAP backend as well as the SAP Hybris Commerce release have to be compliant, please check the SAP Product Availability Matrix.

Here the minimum release requirements of the required SAP components.

More Information

  • Offer Maintenance applications

OSS Components

  • CA-DDF-RT-PPR – ABAP based Omnichannel Pricing Repository and outbound capabilities
  • CA-DDF-RT-PPS – JAVA based Omnichannel Pricing and Promotion Service
  • LO-MD-OPP – SAP ERP and S/4 order integration

Enjoy,
Ingo

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

Follow me on SAP Community Network and LinkedIn

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6 Comments

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  1. Former Member

    Dear Ingo, thanks for the blog.

    As far my understanding is that SAP ERP is more intended to calculate prices for B2B where promotions are not as many as in B2C scenarios.

    What could be the options to ensure that if I create a sales order in SAP ERP versus an order in GK / Hybris I get the same end customer price ?

    Thanks

    Quentin

     

    (0) 
  2. Ingo Woesner
    Post author

    Hi Quentin,

    with the upcoming ERP enhancement packages (and S/4 1709) the SD Sales Order can Access the central Promotion pricing Service in CAR. This ensures the same Promotion Price as in POS, Hybris Commerce and any sales channel using OIPP pricing.

     

    Please note OPP is built for B2C pricing, which is typically starting from the sales list/net Price, and then applying promotions/Bonus buy/customer gruop Discount and that’s it.

    B2B pricing is typically way more complex. OPP is not designed for pricing complexity but for high volume and speed.

    For fast B2B pricing there is a RFC available called SD_PRICING in ERP/S/4. This API is increadibly fast and performs a B2B pricing on line item Level for multiple line items at once. However, this is not the Retail omnichannel pricing, but SD pricing.

    Best regards,

    Ingo

     

     

     

    (1) 
    1. Ingo Woesner
      Post author

      Hi Robert,

      in case you are looking for a chance to learn more about OPP you might want to join the free online training I am offering right now.

      Check here:

      openSAP course „SAP Retail Omnichannel Commerce“, starting May 29, 2018.
      This free online training is publicly available. Enroll now!

      You have to “enroll” the course in order to access the learning assets. In week 2 there are 5 learning units all about OPP:

      • Consistent Pricing and Promotions Across Sales Channels
      • Managing Promotional Offers
      • OPP Deployment Options
      • Using Offers for Offer Recommendation
      • Demo – Promotion Pricing Across Sales Channels

      Enjoy,

      Ingo

       

       

       

      (0) 
  3. Ignacio Inigo

    Hi there, I understand from this explaination that it is possible to use Promotion Pricing Service as standalone mode.  We have our own POS implementation that will like to integrate with it, however I am not able to find the java libraries in order to deploy it. The provided link for local deployment only addresses how to transfer the prices from the central to the local system but does not provide instructions on how to actually deploy as standalone. Am I missing something here? Any help will be much appreciated. Thanks

    (0) 

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