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SAP Omnichannel Promotion Pricing for SAP Retail Omnichannel Commerce

Last update: Dec 4, 2017

Dear SAP Retail Community,

The new SAP Omnichannel Promotion Pricing (OPP) is a true “omni channel” solution.

Based on SAP CAR’s Retail Applications Bundle it ensures the calculation of correct and consistent effective sales prices and cart values across ALL sales channels, along with the ability to introduce new pricing rule and promotion types with low implementation effort. The new promotions, promotion rules etc. become immediately effective across all sales channels.

But let us start from the beginning.

Typical Situation in Retail Sales Applications

A typical retailer has plenty of applications in place to calculate sales prices, e.g. POS systems, web shops, mobile apps, CRM, SD orders in the SAP back end(s), etc.

Each solution typically 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

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: SAP 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.

OPP 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 back ends, 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:

  • Local deployment in the corresponsing sales channels
    • SAP Commerce on-prem, SAP Hybris Commerce (high volume, standalone webshop)
    • SAP Omnichannel POS by GK Software
    • Black Box deployment for non-Java environments
  • Central deployment withiin SAP CAR
  • Public Cloud service deployment (aka OPPS)
    • find more information in this blog
    • can run independent from SAP CAR !

For store retailers a central Price and Promotion Repository in SAP CAR is highly recommended for an Omnichannel Promotion Pricing scenario and the de-facto basis for OPP implementations. Non-retail companies can use the local and cloud deployments without having a SAP CAR. However, the OPP data replication formats have to be thouroughly applied.

 

So typically retailers implementing OPP across their sales channels have a SAP CAR in place, which holds the single-source-of-truth repository for base sales prices and promotions/offers in its DDF repository, no matter where this data have been created.

From this “central” = CAR DDF repository an extract can be created (as OPP idocs), which is then replicated to the respective “local” sales application.

To ensure consistency local extracts are periodically updated from the central repository (via the Data Replication Framework (DRF) with new OPP 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: SAP 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 S/4HANA 1709SAP ERP EhP8 SP7 resp. SAP ERP EhP7 SP14. 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 order. The OPP integration with the SD Sales Order used the formula extension concept in SD. Learn more with the links on the corresponding SAP back end release.

What happens with all the other pricing engines? 

The Retail Pricing (“Handelskalkulation”) in the SAP back end and the price condition technique remain relevant, as they typically calculate regular sales prices out of thje purchasing price. This regular “base” sale price (condition e.g. PR00) is replicated to SAP CAR and is used as the base price to start the promotion price calculation by OPP. Therefofe, the SAP back end SD pricing does not affect the actual promotion pricing calculation of the Omnichannel Promotion Pricing.

In SAP (Hybris) Commerce based sales channels, the built-in Commerce pricing engine will not be used and therefore “bypassed” in an Omnichannel Promotion Pricing based scenario. The integration of Omnichannel Promotion Pricing with SAP Hybris Commerce from release SAP Hybris Commerce 6.1. For the integration of OPP with SAP (Hybris) Commerce on-prem editions the so-called SAP (Hybris) Commerce, integration package for SAP for Retail is required. This provides extensions to SAP (Hybris) Commerce in order to support SAP Retail features.

Regarding POS solutions, GK Software supports the new Omnichannel Promotion Pricing service in their latest releases of the SAP Omnichannel POS by GK (likely version 12), and provides standard import capabilities of the OPP idocs sent from SAP CAR. Other POS vendors need to be implemented on project basis via the so-called OPP Black box deployment.

Accelerated Project Implementation

SAP Omnichannel Promotion Pricing is part of the RDS Package for SAP CAR. Newer RDS packages might be available. 

Summary
SAP 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
Director, Outbound Product Management SAP C/4HANA Suite, SAP SE
ingo.woesner@sap.com

Follow me on SAP Community Network and LinkedIn

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11 Comments
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  • 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

     

  • 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

     

     

     

    • 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

       

       

       

  • 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

  • Hi Ingo

    i have 2 questions for you today:

    1. Am I correct in my understating of the following:
      • The Demand Data Foundation (DDF) stores DDF Offers and Regular Sales Prices.
      • The Price and Promotion Repository (PPR) stores the transformed DDF offers, now OPP Promotions and also replicates and stores the Regular Sales Prices from the DDF.
    2. If you implement a local deployment of Omnichannel Promotion Pricing (OPP), will it be possible to use the local pricing engine (for example a 3rd party POS system and a 3rd party E commerce system) to calculate the Effective Sales Price instead of the Promotion Pricing Service (PPS) and ensure consistent pricing across all sales channels?

    Thank you,

    Mark

    • Hi Mark,

       

      ad 1: This is correct. Offers are stored in DDF, e.g. when created by SAP PMR, Fiori app “Manage promotional offers”, or by importing ERP promotions. The DDF offer “format” is modeled for best flexibility when defining promotions (design time), while the OPP Promotions format is optimized for price calculation performance (run time). That’s why there is a transformation of DDF offers into OPP promotions.

      ad 2: – prices: prices don’t have to be “transformed”, that’s why they are stored in DDF and just “read” by the OPP outbound service when exporting OPP price idocs to a local deployment instance.

      ad 2 – 3rd party pricing engines: You can certainly “feed” an 3rd party pricing engine with OPP prices and promotions and make it calculate the effective sales prices. But then you cannot ensure that the eligible OPP promotions are prioritized, selected and interpreted in the same way as it will be when using the very same (OPP) pricing engine across all channels. The 3rd party pricing engines often are not compatible with promotional rule or type that is created by PMR for example. One pricing engine of channel A understands a promotional rule, the engine of channel  B might not, or worse: mis-interprets a promotional rule (without prompting an error). That is THE key argument for one OPP pricing engine across all channels!

       

      Best regards,

      Ingo

        • Hi Patrick,

           

          OPP accesses offers that are stored in the CAR DDF repository (so-called DDF offers), and transform them into “OPP promotions”.

          So OPP doesn’t care how and where DDF offers are created.

          ECC resp. S/4 can export Bonus Buy promotions (via DRFOUT interface), and CAR can import these Bonus Buy promotions. in CAR they become DDF offers, which can be transformed into OP promotions like any other DDF offer in CAR, wherever these may come from.

          I think CAR can even change such bonus buy promotions, but then they cannot be brought back into ECC for offer compatibility reasons. Not 100% sure. Please check the docu if this is relevant.

          Here a process flow about how promotions and prices are imported into CAR.

           

          Best regards,

          Ingo

          P.S. This was covered in my openSAP course, in week 2 (OPP) unit 2 (offers and promotions). See here: https://open.sap.com/courses/hyb2

           

           

           

  • Hi Ingo

     

    Any suggestions on how can I use coupon with OPP in Hybris Commerce.

    I have created a coupon in PMR and sent it to Hybris commerce and trying to use it.

    But seems like it is not available in OOTB sappspricing extension.

    Could you please provide some implementation details on this.

     

    Thanks In advance

    Tanima