SAP Retail Forum 2014: Three Trends to Watch
New York--Last week, SAP hosted its annual Retail Forum in the palatial confines of the Waldorf Astoria in Manhattan. Within the elegant surroundings a lot of very practical and down-to-earth information about the latest retail IT trends was dispersed. Here are three tech trends retailers should pay extra close attention to.
Predictive Analytics
The massive computational power of in-memory processing, such as that offered by the SAP HANA platform and InfiniteInsight tool, is allowing retailers to move beyond analyzing what has happened and what is happening to analyzing what will happen. While retailers have been using IT tools to help predict future demand and performance for some time, advances in real-time data analysis can now serve as the foundation for using sophisticated predictive algorithms to produce much more accurate and responsive forecasts.
For example, aided by real-time shopper behavior analysis, retailers can continually adjust shelf layout to reflect future demand and avoid “out-of-shelf” situations where product is available in the store but has no space for placement on the shelf. However, retailers would be wise to also heed the advice of keynote speaker Stephen Dubner, author of Freakonomics and Think Like a Freak, who warned that predictions must be based on what people do rather than what they say, and also be free of bias that leads to “retrofitting” of events to fit past predictions.
Marketing and Merchandising Come Together
SAP is engaging in the “CMO Initiative,” an effort to get chief marketing and merchandising executives to work together using advanced IT solutions to ensure their organizations take a heavy customer focus. As Nancy Casey, VP of retail solution management, explained during a one-to-one interview during the conference, the need to meet the real-time needs of the modern customer requires an overhaul of the traditional arrangement where merchandising sets the product strategy and relies upon marketing for lead generation.
“You need to make an effective and personalized experience for the end consumer,” said Casey. “There can no longer be silos.”
To that end, merchandisers and marketers need to use predictive analytics and other IT tools to make dynamic product recommendations that cater to the real-time needs of the shopper, creating an effective and personalized customer experience. For omnichannel retailers, the store must remain the hub of that experience, and marketers and merchandisers need to collaborate to drive store traffic through all channels.
The CMO Initiative also demonstrates a third noteworthy retail IT trend…
Everyone’s in IT
Every department in the retail organization relies upon IT to do their job, and the advent of hosted and cloud-based technology means that even those with minimal IT expertise can assess, purchase and deploy solutions without the need for assistance from the IT department. Speakers at the Retail Forum came from all parts of the retail enterprise, and all demonstrated a high degree of competence and familiarity with IT.
The IT department is still needed for higher-level technology decisions, deployments, maintenance and management, but on a day-to-day basis everyone in the enterprise is now actively involved in IT. Given how critical it is that customers receive a personalized, efficient and seamless experience no matter where, when or how they engage with a retailer, this is a positive and necessary development.