SAP Cloud for Retail

February, 2014
Driving Innovation in Retail
with SAP Cloud

© 2014 SAP SE. All rights reserved. 2
Dynamics SAP Cloud Innovation Why SAP? Next Steps
Pressure on prices
Rapid assortment development
Powerful shoppers
Global buying networks
• Buying journey is different and
uses many touch points
everywhere
• Need to address lifestyle choices
and preferences
• With more shopping options,
decreased brand loyalty
• Expansion of sourcing options to a
greater number of developing
economies
• Global expansion of retailers requiring
localized sourcing and assortments
• Shortened selling cycles
• Fast turn-around needed to take
advantage of choice and variety by
shopper segments
• Downward pressure on prices and
margins due to increased price-
transparency and alternative buying
channels
• Lack of transparency into consistent
profitability metrics
• Need to improve people skills
Increased pressure on decision makers across the enterprise
Dynamics in the retail industry

“In today’s retail environment,
business and IT requirements
can change rapidly and
sometimes unexpectedly, so
retailers are looking for
solutions that can scale up —
and scale down — quickly,
with minimal cost and risk.
Cloud-based solutions are
offering the kind of flexibility
retailers have sought for a
long time, combined now with
greater availability and a wider
range of applications.”
Joe Skorupa,
Group Editor-in-Chief, RIS News
Retail is at an inflection point
Business and IT need more flexibility and speed to value
http://www.verizonenterprise.com/resources/thoughtleadersh
ip/tl_cloud-based-technology-identifying-key-opportunities-
for-retail_en_xg.pdf

Retail and the cloud imperative
Of consumer industry companies surveyed
believe the cloud computing will transform
their organization and/or industry
88%
61%Of consumer industry companies surveyed
expect a major impact on company
performance within five years
Note: Consumer Industries consists of Consumer Products, Retail, Life Science & Wholesale Distribution
Source: =SAP Performance Benchmarking

Cloud solutions deliver agility and innovation
Faster deployment
• Full deployment in weeks
• Mobile-grade user experience = less training
More frequent innovation updates
• Multiple innovation releases per year
• Customer feedback a cornerstone of updates
Agile deployment, configuration, and integration
• Rapid process configuration
• Faster adoption
• No lengthy upgrade cycles
• Packaged integration
Lower TCO & faster time to value
• Lower initial solution and deployment fees
• No maintenance or upgrade costs
• Prepackaged integrations

The time is now: Transform retail with cloud
Customer: Deliver personalized omni-commerce
experiences driven by a real-time enterprise
Sourcing, buying, and private label: Increase
efficiency and optimize partnerships
Finance: Improve margins, respond to rapidly
changing market conditions
Human resources: Empower employees to meet
business goals
Information technology: Leverage real-time Big
Data and reduce infrastructure costs

BUSINESS NETWORK BUSINESS TO BUSINESS COLLABORATION
SOCIAL People-to-People Collaboration
PEOPLE CUSTOMER MONEY SUPPLIER
MARKETPLACE
PARTNER/
ISV APPS
CUSTOMER
APPS
SAP HANA CLOUD PLATFORM
APP DEV & INTEGRATION SERVICES | DATABASE SERVICES | INFRASTRUCTURE SERVICES | INTEGRATION
LINE-OF-BUSINESS CLOUD APPLICATIONS
SUITE ON
HANA
BW ON
HANA
MANAGED CLOUD
BUSINESS
SUITE
Cloud solutions from SAP power operations across retail
Drive
workforce
strategies
Optimize
sourcing
and buying
strategies
Enable two-way
communications
with customers
though social media
Deliver relevant
shopping experiences
Gain a real time
and holistic
view of finance
and risk
Collaborate and
engage with your
partner network
Gain insight
to act quickly
with real-time
customer
analytics
Leverage
innovative in-
memory cloud
infrastructure
The retail enterprise enabled in the cloud
Better
service for
customers

Challenges in retail
With customer experiences for the head of marketing and sales
Customer communication is not personalized or relevant
Ineffective customer segmentation
Lack of a holistic view of sales cycle across channels
Pricing that is not optimized for target audience
Poor customer service
Siloed sales information
Higher customer
satisfaction where
customer profiles,
Transaction, or interaction
history, and preferences
are available during every
customer interaction
Increase in sales through
more effective pricing
7%
Increased cross- and up-
selling for organizations
that use business
intelligence to gain
customer insights and
position products
12.6%
1%-2%
Source: SAP Performance Benchmarking

hybris and SAP
Gain complete visibility across all channels
Complete omni-channel commerce platform
incorporating Web, mobile, call center, store
and social media
A single view of customers, products and orders
across multiple demand and delivery channels
made possible by best-in-class product, catalog, and
content management across unified commerce
processes
hybris and SAP – engage
customers like never before
Investigation
Marketing to
shoppers
Shopping
experience
Personalized
suggestions
After-sales
service
hybris is an SAP company.

Investigation
Marketing to
shoppers
Shopping
experience
Personalized
suggestions
After-sales
service
Leverage customer service
interactions to cross-sell and
up-sell, turning loyalty into
revenue
Market with speed and precision
and convert on market
opportunities before they
disappear
Empower
the modern
marketer
Enable the
strategic
seller
Turn sales strategy into action
to engage customers like never
before, drive revenue, and
exceed goals and objectives
Deliver
service
excellence
SAP Cloud for Customer Engagement
Engage customers like never before

SAP Precision Marketing solution
Personalized real-time experiences
• Understand the consumer shopping
context: who, what, where, when
• Send targeted offers, product
information, and availability
• Analyze performance to optimize
campaigns
• Access relevant content from legacy
systems
Investigation
Marketing to
shoppers
Shopping
experience
Personalized
suggestions
After-sales
service

With B2B networks for head of sourcing and buying
Improvement in
compliance
60%
Reduction in price
4-15%
Improvement of
working capital
20%
Source: Ariba Benchmarking
Manual paper-based collaboration, point-to-point electronic
data interchange (EDI), portals, and single process
solutions
High operating and supply chain costs
Maverick spending, delayed payments, overpayments, and
missed discounts
Long sourcing and contracting cycles
Wasted time in identification of new, competitive sources
of supply
Manual and ineffective insight into supplier behaviors and
capabilities

Ariba, an SAP company
Delivering a better B2B e-commerce network
Ariba delivers
• Enhanced buying power and
reduce costs
• Discovery of new sources of
supply
• Reduction supply chain costs
and risk
• Better visibility and predictability
• Real-time management of
working capital
• Lower system maintenance and
costs; improve availability
Suppliers
Buyers

With human resources management for HR executives
Increase in time spent
on strategic priorities
5.5%
Increase in internal
job fill rate
13.7%
Of revenue added back to
profit with adoption of
SuccessFactors
1%
Source: SuccessFactors Benchmarking
Retention challenges
Need to establish focus and accountability, resulting in
clear correlation between performance and pay
Store employees concerned with job security while being
asked to promote other channels
Loss of key talent
Keeping up 100% workforce compliance to continually
changing regulations and consumer protection acts
Recruitment and training of multichannel workforce
requiring multichannel strategies

SuccessFactors, an SAP company
Delivering one set of HR solutions across the entire employee lifecycle
SuccessFactors is the leader in Gartner's’ Magic Quadrant and the leader in Forrester’s Wave
SuccessFactors delivers
 Complete global solution
across all HR functions
 Business applications
designed for how people
work
 Data analysis, insight, and
guidance across the
enterprise to help drive
maximum business impact
 Flexible and extensible
architecture to start
anywhere, go everywhere
Succession and
Development
Core HR & Payroll: Employee Central
Employee Record | Organizational Management | Payroll | Shared Services
Time Sheet | Global Benefits
CompensationPerformance
and GoalsLearning
Recruiting and
Onboarding
Competencies, Skills, Best Practices
Analytics
SAP HANA In-memory Computing Platform
Mobile and Social

With financial management for the CFO
Lower financial closing
FTE cost when the
financial system supports
internal and external
accounting requirements
56%
Lower general ledger and
financial closing costs when
general ledger and financial
systems are integrated to
produce accurate data
90%
Lower days to annual close
when general ledger
system supports multiple-
currency accounting
processes and entries
19
Little transparency across the enterprise
Ever-changing regulatory requirements
Slow response to market dynamics
Managing risk in real time
Enterprise compliance management
Fast and timely closing of the general ledger

SAP Cloud for Financials solution
Delivering better financial transformation
SAP Cloud for Financials
delivers
 Complete coverage of accounting
value chain
 Real-time insights and
collaboration
 One single source of truth with
central financial data repository
 Trusted reporting and analytics
 Streamlined and integrated fast-
close processes
Comply with global
financial reporting
requirements
Overseeing all
accounting operations
Define and execute
business plans
Provide strategic insight
across the enterprise

Greater ability to utilize Big
Data to gain insights with a
well-established analytics
and data-modeling center
of excellence
With data management for CIO
Of companies have a
360-degree view of their
customers
16%
40%
Higher operating
effectiveness with ability to
monitor business in real time
39%
Risk data aggregation
Global compliance reporting
Ancient data silos and aging infrastructure
Data cleansing and separating good data from white noise
data
The need for real-time data
Multiple regulatory requirements

Cloud options with SAP HANA
Subscription or bring-your-own-license, elasticity, ubiquitous access
SAP offers a wide range of deployment options to support your requirements
Private Cloud,
HybridPublic Cloud On-premise
Partner ScaleAny Scale Elastic ScaleLimited Scale
SAP HANA One
Public Cloud (AWS)
• Subscription license at
99 cents / hour
• 30GB of compressed
data max
SAP HANA
On Premise
• 10 certified hardware
partners
• Scales to any size
SAP HANA
Enterprise Cloud
Managed Cloud
• Enterprise grade cloud
• Mission critical 24 x 7
Open
Cloud Ecosystem
• Cross license
reference architecture
• Portability

Managed cloud as a service from trusted partners
Subscription pricing with cloud agility and economics
SAP-proven solutions available via partner-
delivered private cloud environment
 Cash preservation/optimization with
subscription-based opex model
 Reduced IT costs – 30% lower total cost of
ownership (TCO) over on premise*
– 51% of the savings realized in the first year*
 Rapid time to value
– 90% improvement in implementation time *
 Fully managed, enterprise-class solution with
proven partners
* VMS AG SAP Managed Cloud as a Service (MCaaS); July 2013

Cloud computing benefits for retailers
Dramatically improve the economics and business agility of your company
Shorter time to value
• Adopt new technologies
quickly
• Always have the latest
versions of the
application
• Leverage well-tested IT
best practices
Cost reduction
• Cloud-based solutions
require less up-front
capital investment
• The per-usage pricing
model fits well with the
seasonal nature of retail
Lower barrier
to innovation
• Expand domestically
and even internationally
more rapidly with a
lighter IT footprint
• Increase innovation
capacity by driving
multiple projects in
parallel
Scalability
• Add new channels,
stores, or distribution
centers more easily and
in far less time than
traditional application
architectures would
have needed

Best-run customers in the Cloud
1.2 million
connected companies from
190 countries collaborating
on >US$600 billion worth
of commerce annually.
That’s 3x–50x the size of
any other business
network.
30 million
Cloud users
2 million
Cloud deployments

Food and Drug
Target
Migos
Metro
Walgreen
Coop
Wawa
Carrefour
End-to-end retail processes
supported on a real-time platform
Deep industry-specific
capabilities supported
Embedded preconfigured
best practices
Clear industry road map
12,200+ retailers
Source: SAP analysis of Forbes 2000 rankings (May 2013) and SAP customer database as of May 2013.
Customer count as at Q4 2013
Hardlines
OfficeMax
Best Buy
Crate&Barrel
Hobby Lobby
Sears
Barnes & Noble
Family Dollar
Fashion
Clarks
Burberry
Fossil
Wolverine
Under Armour
J Crew
Welspun
Columbia
SAP customers
represent
98% of the top
100 most-valued
brands in the
world.
Unmatched SAP expertise and traction

Analyst sentiment about cloud offerings from SAP
Source: Gartner “Magic Quadrant for Talent Management Suites”, March 2013; Gartner “Magic Quadrant for Strategic Sourcing Applications Suite, July 2013; Ovum View, December
2012 http://ovum.com/2012/12/18/saps-financial-services-network-offer-may-provide-lessons-for-ariba/ ; Gartner http://blogs.gartner.com/yefim_natis/2013/07/29/in-cloud-strategy-private-
or-public-is-a-red-herring/ PAC Blog, July 2012 http://blog.pac-online.com/2013/05/sap-builds-cloud-offering-around-hana/
Source Gartner http://blogs.gartner.com/yefim_natis/2013/07/29/in-cloud-strategy-private-or-public-is-a-red-herring/
SuccessFactors is
the leader in
Gartner’s 2013
Magic Quadrant
for Talent
Management
Suites.
Ariba is a leader in
Gartner’s 2013
Magic Quadrant
for Strategic
Sourcing.
“No wonder that
the notion of
Cloud computing
has been
championed, if not
invented, by a
leading retailer,
Amazon.”
Gartner
“[SAP] HANA
Enterprise Cloud
offers companies
a good way to
deploy SAP HANA
without heavy
investment into
hardware.”
PAC

SAP: Your partner for co-innovation
SAP for the retail industry:
SAP customers represent
98% of the top 100 most-valued
brands in the world.
Creating the real-time retail
enterprise
Leveraging key breakthrough
innovations
Clear retail road map
Active retail customer councils and
retail forums

Initiate
the benchmarking
process with a free value
assessment at
valuemanagement.sap.com
Engage
in Design Thinking
workshops
Contact
our account team to
schedule a meeting
Next steps
Experience
it yourself at the next SAP
event near you or check
out SAP global events, or
arrange an individual
demonstration

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