Holistic software environment secures the future of commerce

In e-commerce, the "customer experience", or CX for short, is the central topic. It is taken for granted that customer experience first emerged and gained such relevance with e-commerce - yet the development of the approach dates back to the 1960s. Since then, it has been about creating positive customer experiences in retail - as a reminder: Amazon was founded in 1994.

In e-commerce, the initial focus was on managing the experience users had with the online stores themselves - the user experience. This is not just about mere user-friendliness, but also about the underlying information structure, content and more. All of this must be optimized in a controlled manner so that users can quickly reach their goal - the purchase of a product. The customer experience, the general customer experience, is much more far-reaching - it puts the customer in the focus of almost every business activity. It is driven in particular by marketing and brand management, product features and qualities, and pricing.

Customer relationships across all channels

The central pillar of any customer experience approach is customer relationship management - and in the age of the diversity of communication channels and touch points, this is a major challenge.

It is important to address customers strategically, in a structured and targeted manner with individually suitable offers via all channels - for example, the store itself, but also via personal e-mails, newsletters, and all common social media platforms. Communication must be consistent across all channels.

The rapid technological development that has been going on for years continues with giant strides. If we look at the area of search alone - with voice assistants such as Apple's Siri, Amazon Echo or Google Home - voice-based search has now reached customers.

According to a study conducted by ECC Cologne in collaboration with SAP Customer Experience, one in eight people orders online by voice, and a quarter of those surveyed can imagine using voice control to make purchases in the future. According to the study, 50 percent of Google search queries will be voice-based by 2020. Although voice search has quickly developed into a marketing discipline in its own right, the challenge of accurately describing products remains. The solution to this problem is approaching in the form of image-based, visual search. The motto is "see, search, buy".

Although initial developments in this area began more than ten years ago, it is only now that the necessary data sets and computing power are available to realize the technology's potential in everyday life.

According to another study, also conducted by ECC Cologne in collaboration with SAP Customer Experience, visual search is favored by 59 percent of 20- to 69-year-old study participants; among 14- to 19-year-olds, the figure was as high as 69 percent. Visual Search virtually eliminates the barrier between the online and offline worlds in retail. For example, customers see a product while on the move or in a magazine, take a picture of it, search for it and can buy it immediately. Visual search thus supports the impulse purchases that are so important for stationary and e-commerce. So here, too, retail companies will have no choice but to join the trend.

Effectively map strategic trends

In addition to these and other technological developments, strategic trends can also be observed. For example, the previously clear distinction between B2C and B2B is becoming blurred, and the two areas are increasingly merging. The reason for this is that B2B buyers are familiar with e-commerce offerings aimed at consumers from their private lives. They want the same structures, procedures and convenience in their professional activities.

In addition, retail companies want to expand their target customer segments - B2B retailers increasingly want to address end customers, while large retailers in the B2C sector want to attract smaller to medium-sized B2B customers.

In this way, retail companies should be able to put together the right offers for both private and business customers - preferably, of course, from one system and, as far as possible, using the same databases and content. Another important trend is the integration of electronic and stationary commerce. This is made possible in particular by customers' mobile devices, which they use to store according to the ROPO model - Research Online, Purchase Offline. Retailers can control this in a targeted manner using suitable measures and technologies.

Holistic approach to solutions

The variety of channels to be served and the current and future technical possibilities require a holistic approach with regard to the systems used (see also info box). The goal must be to be able to efficiently handle all processes relevant to the customer experience from a powerful and flexible software environment. SAP provides such a solution with the C/4HANA Customer Experience Suite. Its goal is to accompany customers from the first contact to the conclusion of the sale and subsequent service requests, as well as to strengthen customer loyalty in a targeted manner.

The suite integrates a number of modules under a single interface:

• SAP Marketing Cloud is used for personalized customer targeting in real time and creates a 360-degree view of customers.
• As a powerful web store solution, SAP Commerce Cloud optimizes sales processes and order management and centrally manages content and catalog data.
• The SAP Service Cloud is used for effective customer retention even after the purchase decision has been made. It supports interactions of all kinds - from self-services to personal dialog.
• SAP Customer Data Cloud is the module for managing customer data; it creates trust through transparency, security and control.
• SAP Sales Cloud enables access to current information on customers and transactions regardless of time and location.

Thus, this CRM suite enables the basic management of the personalized digital customer relationship. However, the suite can still be extended.

For the B2B customer experience in particular, it is important to optimally compile special offers - for example, on the basis of the customer's membership of a specific customer group. This is where SAP CPQ comes into play - the abbreviation stands for "Configure, Price and Quote".

This AI-powered solution simplifies quoting and sales processes and facilitates the rapid creation of accurate quotes by optimally combining products, variants, and services.

The solution helps sales representatives understand customer needs and suggests the right products and services.

For example, pricing also takes into account special discounts according to the respective customer group. In addition, historical purchasing behavior can be evaluated in order to offer optimal discounts.

Customer experience as a driver of digital transformation

Due to the large number of processes involved, the customer experience is the driving force for digital transformation in retail. Important prerequisites for this include:

• Openness to collaboration with other applications
• High performance for efficient handling of even very large data sets - keyword Big Data
• Highest possible flexibility, among other things, for the integration of external business partners
• The analysis of business processes in real time, if possible

The ERP system S/4HANA, which can be seamlessly integrated with C/4HANA, offers these options and many more - no wonder, since it was specifically designed by SAP as a platform for the digital transformation of business.

In the interaction of the two platforms, the implementation of the deep retail approach is then also no problem. This involves combining technologies such as big data, artificial intelligence and machine learning in general, and specifically facial recognition and eye tracking, with the aim of generating and analyzing more powerful forms of data.

This opens up much more far-reaching personalization possibilities for retailers than before.

Experts with holistic knowledge necessary

This diversity of technologies and solutions is, so to speak, both a blessing and a bit of a curse.

A blessing, because all processes relevant to retail can really be mapped and optimally controlled - and a difficulty, because retail companies usually find it hard to conceptualize and implement the optimal, future-proof solution for their long-term business strategies and goals.

A partner who can not only demonstrate the necessary technical expertise in both C/4HANA and S/4HANA, but also has extensive experience in the retail sector, provides a remedy.

If the knowledge from a large number of implemented projects can also be incorporated, the company being supported can quickly build up the necessary know-how and the implementation can be carried out quickly.

Holistic software essential in retail

Digitization is also in full swing in retail - and we're not talking about setting up an online store. Digital transformation really does affect all areas and processes in retail companies.

Previously familiar demarcations, such as between stationary and e-commerce or B2C and B2B business, are becoming increasingly blurred - business is becoming all-encompassing.

It should also be borne in mind that technological development is more rapid and customer expectations are higher than ever before.

It is imperative that the software environment used skilfully reflects these trends as well as ensuring the efficiency of processes now and in the future.

This is hardly possible with individual solutions that are more or less seamlessly flanged together.

SAP has also recognized this and offers a holistic solution with S/4HANA and the C/4HANA services.

The rule of thumb is that S/4HANA, as the ERP system, is responsible for all internal processes, and C/4HANA services control all outward-facing activities via a 360-degree view of customers, i.e., communication with customers.

With the seamless integration of SAP C/4 and S/4HANA components under a unified interface, a cloud-based tightly integrated process landscape, and a unified data model, retail companies can implement a solution that meets market requirements.

It covers all retail processes. Thanks to its open architecture, it offers the flexibility that is absolutely necessary in the face of continued rapid change in order to stay on the ball in terms of strategy and technology.

Companies that want to remain successful in the future must adopt strategies such as retail analytics or deep retail and implement technologies such as mobile retail or visual search. This is the only way they will be able to survive in the tough competition for customers.

Company profile

As an internationally active IT specialist, Arvato Systems supports retail companies and trading manufacturers as important customers in their digital transformation, including on the basis of SAP C/4HANA (www.arvato-systems.de/c4hana) as a central platform for a customized commerce experience - anywhere and anytime.

As a team, Arvato Systems develops innovative IT solutions, brings customers into the cloud, integrates digital processes and takes over the operation and support of IT systems.