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
- SAP Promotion Management for Retail (SAP PMR)
- New SAP Fiori transactional app “Manage Promotional Offers”
- Import from 3rd party systems
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):
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 1709, SAP 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.
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.
- SAP CAR 2.0 Retail Applications Bundle 1.0 Feature Package 3 (CAR RETAIL APPL BUNDLE)
- Focused Business Solution (FBS) “SAP CAR, omnichannel price and promotion service” (material# 7018887)
- SAP Hybris Commerce (6.1), integration package for SAP for Retail 2.1 or higher
- OPP – Functional Guide – PDF
- OPP Application Help (select release)
- OPP – what’s new (select release)
- OPP Extensibility (select release)
- free openSAP course with 5 video units around OPP and offer recommendation. “Enroll” the course and navigate to week 2 = OPP
- Offer Maintenance applications
- How to use offers as recommended “incentives” in personalized marketing
- 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
Dr. Ingo Woesner
Director, Outbound Product Management SAP C/4HANA Suite, SAP SE
* Legal Disclaimer
This document, or any related document and SAP’s strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP´s willful misconduct or gross negligence.
All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.