ANWR GROUP: The Future of Retail Today

Thanks to savvy technology spending, trade cooperative ANWR GROUP is a step ahead of its time. By embracing the digital transformation, CEO and CTO Günter Althaus has already netted some valuable benefits.

At the ANWR GROUP, a trade cockpit gives retailers access to retail-specific KPIs, calculates real-time profit, and compares costs. Inventories are tracked automatically using RFID technology. A 3D camera registers whether customers entering a store are male or female, estimates their age, and measures the frequency of their visits. A “best-fit analysis” allows the retailer to determine individual foot measurements as a basis for identifying suitable shoes from the range on offer and even for the production of orthotic insoles. Customers pay for goods electronically; their order is entered in a mobile device and they simply receive an email with an invoice attached — with cross-selling suggestions.

At ANWR GROUP, the future of retail is already here.

“No Data, No Retail”

ANWR GROUP employs nearly 1,300 people and last year garnered revenues of €523 million (+4.4%), achieved pre-tax profit of €9 million, and recorded an invoicing volume of €8.9 billion (+2.4%). CEO Günter Althaus describes his company as a “cooperative network organization that brings retailers together.” It supports and advises more than 6,000 retailers in the footwear, sports, and leather goods segments.

“We trade in the sports segment under the brand name SPORT 2000; in the footwear segment, the retailers who belong to our cooperative usually market their products under their own name. Salamander and Siemes, for example, are two of our retailers who are represented throughout Germany,” says Althaus.

The challenge lies in the fact that the technical infrastructure each retailer uses is as diverse as the retailers themselves.

“We need to make them receptive to the digital transformation and to a new infrastructure,” says Althaus, who as CTO is also responsible for Information Technology at the ANWR GROUP. His motto is “No data, no retail” — in his eyes, data flow is critical to efficient retail operations.

These are six examples of the added value to be gained from digitalizing processes.

1. Central View of Inventories and Product Availability

The ANWR Group’s “sneaker wall” is a good example of how retail could work in the future. It was developed with Adidas, Nike, Reebok, and Puma and in its current form holds an initial display stock of 42 items that are automatically replenished by ANWR as and when they are sold. One hundred such systems are currently being rolled out. Eventually, there will be 600, which will provide headquarters with a clear picture of the sales and delivery status of these particular products.

What is currently being created for Nike and Adidas, the two most important suppliers of sportswear to the ANWR GROUP, is already something of a tradition on the group’s shoe platform The ANWR GROUP began digitalizing products on site at 1,800 stores six years ago. It bought 80 mobile photo systems to photograph inventories in store and create a central database that all the retailers could access.

“No other supplier in Europe has a larger range of available products than we do,” says Althaus. This is one of the benefits of partnering with such a diverse collection of retailers and is also thanks to SAP for Retail, which continuously optimizes the processes between order and inventory, and to the SAP cloud solution as the “single source of truth” for the article master data and the necessary content.

In order to grow its market share further, the ANWR GROUP signed a cooperation agreement with online retailers Zalando and Amazon five months ago and has now connected up its inventory and availability data to their online store platforms.

“There is no reason why CEOs, who grapple with strategy
every day, shouldn’t also knuckle down and
come to grips with the digital transformation.”

– Günter Althaus, CEO and CTO, ANWR GROUP

2. Connecting Inventories Across the Network

The “virtual shelf extension” follows a similar concept. The basic idea is that, if inventories are updated and localized, they can also be connected to each other. If a retailer receives inquiries about products it does not stock itself, it can source them from another retailer – and vice versa. The availability of products is thus “extended,” says Althaus, and by linking up across the network, retailers can increase availability overall. The next step, following positive pilot experiments, will be to incorporate manufacturers into the network and make their product ranges directly available to the retailers.

3. Discovering More About the Customer

Retailer data is important; customer data perhaps even more so. But it isn’t always easy to get hold of. On average, men buy a new pair of shoes twice a year. That’s not nearly enough data for a profile. But the ANWR GROUP’s sports segment, its second largest, has found a solution. It is using what Althaus refers to as a “machine” to trawl 12 different social media channels and glean more about customers’ wishes and preferences. At its heart is the marketing solution SAP Cloud for Customer, which is capable of creating individual profiles and driving digital communication with customers. It does so, says Althaus, as if by attaching data suction cups to individual customers so that they receive more personalized and accurate service in the future.

4. Fast Sellers, Slow Movers, KPIs

Retailers are no less diverse than consumers. “Their approach to article identifiers is highly creative,” says Althaus, who would love to see retailers in the footwear and sports segment take a leaf out of the publishing industry’s book. While every book has an ISBN that makes it uniquely identifiable, there is no such equivalent in the sports and footwear industries. According to an analysis conducted by the ANWR GROUP, there are currently 156,000 separate conversion tables that communicate between retail systems to produce a central view of article master data.

“You need that view to see which products are selling well, which products customers are interested in, and which channels they are open to,” explains Althaus. And that is exactly what a retail cockpit does, by differentiating between products that are selling well and those that aren’t. And it uses product group and supplier analyses to pinpoint trends, visualizing the most important KPIs in a total of five dashboards.

5. AI for Product Recognition

One technology that can solve the problem of having to use conversion tables to identify article numbers is artificial intelligence (AI). The ANWR GROUP has already uploaded 770,000 product photos as the basis for teaching its system to recognize articles with a high degree of accuracy. So far, as Althaus demonstrated recently at the SAP Retail Forum, the system identifies brands with 91 percent accuracy, the main product category with 94 percent, and sales volume with 97 percent accuracy.

“We soon won’t need article identifiers anymore,” says Althaus, who wants to gradually automate proposal lists for meta data maintenance and product keywords.

6. Price Bots for Automatic Pricing

Being able to identify products is also the prerequisite for the ability to dynamically adjust prices in a system landscape that is dominated by SAP – through SAP for Retail, SAP Customer Experience, and SAP Cloud for Customer. Price adjustments are a challenge for today’s retailers.

According to Althaus, 70 retailers that each sell 500 products through the Amazon platform currently use an automatic repricer to adjust their prices 370 million times every month. He expects to net revenue increases of between two and five percent from automatic repricing and is very deliberate about the technology he chooses to use at the interface between his company and large platforms like Amazon. For him, this is not only a great opportunity to use a price bot to grow sales; it is also a way of dealing with the problem of leftover or out-of-fashion stock.