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  • Retail in the Fashion Industry

    Achim Schneider, Director Solution Management Retail

    May 18, 2011

  • 2011 SAP AG. All rights reserved. 2 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    The information in this presentation is confidential and proprietary to SAP and may not be disclosed without

    the permission of SAP. This presentation is not subject to your license agreement or any other service or

    subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this

    document or any related presentation, or to develop or release any functionality mentioned therein. This

    document, or any related presentation and SAP's strategy and possible future developments, products and

    or platforms directions and functionality are all subject to change and may be changed by SAP at any time

    for any reason without notice. The information in this document is not a commitment, promise or legal

    obligation to deliver any material, code or functionality. This document is provided without a warranty of any

    kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness

    for a particular purpose, or non-infringement. This document is for informational purposes and may not be

    incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except

    if such damages were caused by SAPs willful misconduct or gross negligence.

    All forward-looking statements are subject to various risks and uncertainties that could cause actual results

    to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-

    looking statements, which speak only as of their dates, and they should not be relied upon in making

    purchasing decisions.

    Legal disclaimer

  • 2011 SAP AG. All rights reserved. 3 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    Real, Real Time Retail

    Consumers Always On,

    Always Open

    Mobile Revolution

    Connected consumers over

    an abundance of

    channels

    Globalization and Consolidation

    Global expansion with local

    specifics

    Global sourcing

    Omni channel Complexity

    Increased supply chain complexity

    Price and Margin Pressures

    Competition and siloed channel

    operations have

    shrunk profitability

    levels

    Key Trends Driving Future Innovations for Retail Increasing customer demands and intensified competition are driving the need for constant innovation

    Retail internet and mobile sales will surpass offline brick and mortar sales globally in the next 5 years.

    Goldman Sachs, 2010

  • 2011 SAP AG. All rights reserved. 4 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    The world is turning upside down

    The next generation of consumers are not

    playing to traditional rules

    They are networked, verbal and open

    They expect immediate gratification

    They expect fast simple interactions

    You need to engage on their terms

    NEW GENERATION CONSUMER

  • 2011 SAP AG. All rights reserved. 5 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    Power of the World of Social Media

    Do you like what they are saying about your brands ?

    Social Media Is it a Fad? http://www.youtube.com/watch?v=NhPgUcjGQAw&feature=mfu_in_order&list=UL

    Solicit feedback with an engaged audience who will provide it

    Example Marks and Spencer (UK) and IKEA

  • 2011 SAP AG. All rights reserved. 6 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    You Solicit Feedback Direct Customer Sentiment

    http://www.marksandspencer.com/Portfolio-Round-Abstract-Print-

    Dress/dp/B003VFEKSY?_encoding=UTF8&categoryNodeID=42

    967030&mnSBrand=core

    Direct customer feedback on the quality and the finish of the

    article from the website.

    Marks and Spencer customers are encouraged to add comments

    good and bad to provide direct feedback .

    Actions

    Check quality control of all products Check the returned article Look at sales in other channels / stores Take action

  • 2011 SAP AG. All rights reserved. 7 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    Solicit Feedback from customers before you commit to

    manufacture

    This dress is a very high price point for Marks and Spencer. They asked

    We are looking for feedback. Would you buy this dress, if so we shall email you as soon as it arrives

  • 2011 SAP AG. All rights reserved. 8 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    Growth in Online and Multi-Channel Shopping

    In Europe, 37% of the total population has shopped

    online during 2009, up from 32% in 2008, with the UK

    and Germany leading the group.

    Globally, online sales grew by over 20% during 2010,

    and we expect a growth by nearly 50% within the

    period 2010-2013.

    Multichannel shoppers spend, on average, 1530% more with a retailer than someone who uses only one

    channel.

    IDC Retail Insights estimates that omnichannel

    shoppers will spend over 20% more than

    multichannel consumers, will exhibit strong loyalty,

    and will influence others to patronize the retailer.

    In profit margin improvement terms for the retailer, we

    find that cross channel loyalty integration can drive

    10% increases in loyal customers' profitability

    IDC Retail Insights How to Achieve Multi Channel Retailing May 2010

  • 2011 SAP AG. All rights reserved. 9 This presentation and SAPs strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

    Buy Online, Pick-up In-Store The Trend Continues

    According to an annual Shop.org study conducted by Forrester

    Research, online retailers with a buy online, pick up in-store feature say that an average of one third of orders (31%)

    placed on their websites are picked up in the store.

    Additionally, according to the report, more than one-fourth of

    those shoppers (27%) make additional in-store purchases,

    which boosts overall sales.

    Shop.org Forrester Research

    German hypermarket and Metro affiliate Real establishes

    dedicated pick-up stores instead of picking the items in the

    stationary hypermarket close by. Real explains its decision with the fact that picking from regular store shelves is more difficult

    and more expensive. Besides, the pickers and regular shoppers

    would disrupt each other.

    LZ.net Real-Drive.de speeds up shopping

    An online presence with fulfilment from either a store or a

    warehouse, be that dedicated or part of an existing facility,

    creates complexities associated with singles picking, small

    order volume, the number of deliveries, time limits, availability

    issues, and so on.

    SupplyChainStandard.com The retail challenge

  • 2011 SAP AG. All rights reserved. 10 This presentation and SAPs strategy and possible future developments are subject to change and may be ch