The past few years have brought about big changes in consumer behavior. The practice of showrooming – examining a product at a brick-and-mortar store, but buying it for a cheaper price online – has led to the failure of a number of venerable retailers. “The staff at Jessops would like to thank you for shopping with Amazon,” was the bitter sign posted at a Jessops store after the 78-year-old British camera chain went under.
Brick-and-mortar stores around the world are at risk. At least 43 % of U.S. adults participate in showrooming, according to an Internet Retailer estimate. And 24 % of shoppers in the UK showroomed during the run up to last Christmas.
Another trend is that people seldom read product or vendor brochures before making a purchase, observed Jonathan Becher, Chief Marketing and Communications Officer at SAP AG. He was speaking at a recent event in New York to mark SAP’s acquisition of Swiss e-commerce company hybris. Instead, consumers are crowdsourcing their decisions. One negative online review may change a consumer’s mind about buying a product. This poses a challenge for companies and brands. “It means we have to listen and respond to a whole host of digital signals,” said Becher. “We have to change our mindset from controlling customer relationships and automating them.”
Next page: Reaping the benefits of hybris
This is where hybris comes in. A retailer can use the same hybris platform to handle business-to-business and business-to-consumer transactions, covering the gamut from brick-and-mortar retail stores to e-commerce sites, call centers, mobile devices and on-premise back-end systems. In short, hybris enables the retailer to provide a consistent experience across all its sales channels.
Why is this important? Because “consumers know brands, not channels,” as hybris CEO Ariel Luedi put it. Ensuring a good, consistent customer experience is crucial, continued Luedi, adding that a breakdown in information exchange across a company’s various contact points with a customer can be dangerous to a business. He gave a personal example, citing his frequent flier status. “I am a HON Circle member at Lufthansa; I am proud of it; I am treated like a king, but sometimes it breaks down,” he said. “Then I am treated like a plain flier. It hurts!” The challenge in retailing today is that multiple channels cause immense data complexity, according to Luedi, and managing it – and customers’ expectations – can be challenging.
Managing every channel
hybris has been very successful in managing this complexity so that enterprises have a unified view of their customers, products, and orders. Becher and Luedi called this management of every possible channel “omni-commerce.” A good example is Grainger, an industrial supply distributor on the Fortune 500 list, with more than 3,000 suppliers. On a good day, it handles 500,000 orders – and its entire order pipeline goes through hybris to SAP’s Customer Relationship Management (CRM) system.
Next page: Improving e-commerce worldwide
Becher and Luedi both talked about the potential of improving e-commerce worldwide by bringing SAP and hybris together. The biggest possibilities lie in emerging markets, such as China, which, according to Luedi, is the second largest market for e-commerce today. Soon it may become the largest.
Alibaba.com more successful that Amazon and eBay
By some measures, the world’s most successful online company is China’s Alibaba.com. Last year, Alibaba.com had sales totaling 1.1 trillion yuan (about US$170 billion). This is more than Amazon and eBay combined, as the Economist pointed out.
SAP and hybris are helping many Western retailers with their omni-commerce presence in the important Chinese market, said Luedi. There is also tremendous potential in the other BRIC countries (Brazil, Russia, India, and China), as well as emerging economies, such as Indonesia, where online retailing is becoming increasingly more popular.
Next page: The challenges for today’s retailing landscape.
The challenges in today’s retailing landscape are many: Big Data, extreme cost pressure, rapid technological change, consumer-driven user interfaces, and multiple interconnected devices across geographies and time zones. In such a landscape, traditional enterprise resource planning systems, CRM systems, and relational databases are inadequate. While they won’t disappear, they will play a diminished back-end role, Luedi predicted. By incorporating SAP HANA in-memory technology, Luedi is convinced hybris will have a platform ideally suited for the future of commerce.
SAP and hybris a good fit
To drive home the point, Luedi dwelled for a few moments on why hybris agreed to be acquired by SAP. The fit with SAP seemed a lot better from the integration perspective. It would allow him to achieve his dream of omni-commerce worldwide – delivering the future of commerce today.
Otherwise, Luedi said, hybris had “other options, even financially more interesting options.”