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Fate as an opportunity for retail

The Internet is also opening up new sales models such as B2B2C for the retail sector. However, it is important to weigh up the opportunities and risks for both the one and the other "B".
Philipp Rohe, Retailsolutions
February 27, 2020
This text has been automatically translated from German to English.

As is well known, the Internet has massively changed traditional sales models in many industries over the past decades. The best-known examples are probably the disruptive ones in the book trade and airlines. Here, entire professions have been almost completely turned upside down, and brick-and-mortar retail has been reduced to a few niche players.

This did not primarily involve omitting a retail level, but rather shifting sales to the Internet through new players. But direct sales also became possible, as Dell demonstrated worldwide more than twenty years ago.

In the meantime, many vendors have emulated the computer manufacturer more or less successfully - while Dell, for its part, began to build up indirect sales to corporate and private customers as an additional channel.

New forms of omnichannel are now emerging on the Internet: Manufacturers and retailers are placing their products in the care of large, global and local platform operators such as Amazon, eBay, Alibaba, Wish, etc. They hope to gain additional customer access and global market access through the new sales channel.

At the same time, they can keep their investment costs low without complex IT architectures and infrastructures. Amazon, Zalando, and others need an open and stable infrastructure, but they must integrate many peripheral systems and remain highly scalable.

The cloud is the technology of choice for remaining flexible - Black Friday says hello! But they also gain sovereignty over the data, possibly of the brands, and can open up new business fields with the trade of data. If they succeed in marketing the data, including all security issues and data protection requirements adapted to local conditions and any certification programs, the retailer or manufacturer also benefits from the success.

Amazon has long since ceased to be a pure bookseller. However, it is interesting that the US online giant has scrapped the project for a Swiss platform. Whether this is a blessing or a curse for Swiss providers remains to be seen.

Retailers, in turn, can increase the breadth and depth of their product range by integrating merchandise from many online catalogs into their own stores. We're talking about longtail here, because with little additional effort, niche products suddenly become an attractive sales driver and their share of sales can even exceed that of A-products.

Such projects stand or fall with challenges on several levels: Naturally, a platform should meet modern customer requirements for mobility, transparency, and contemporary forms of communication such as comment functions, chats, rating options, and so on.

SAP's cloud solutions for integrated e-commerce, sales, CRM, analytics, service, etc. and new applications such as Qualtrics for experience management are the keywords here. On the other hand, the system must of course function perfectly technologically and be more than just flexibly scalable and stable.

The smooth integration of master data from one platform to the other with standardized interfaces and data exchange protocols to the SAP Cloud Platform is an absolutely mandatory requirement here. For example, supplier commodity groups must be "mapped" to the company's own commodity groups and supplier structures and fit its own marketplace architecture.

Today's customers expect more and more information about products. This information often comes from unstructured data, which must withstand intelligent searches and the increasing need for personalization.

Last but not least, the customer does not only want a modern trading platform. Just like a poorly functioning website, they will not forgive it if goods are not available. That's why platform operators need to work with suppliers who can actually deliver and who have the logistics under control.

Philipp Rohe, Retailsolutions

Philipp Rohe is Managing Partner at Retailsolutions.

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