SAP Commerce Cloud and C/4HANA
In the constantly evolving world of SAP software users and even consultants may be forgiven for getting a little confused about how all the components of an SAP e-commerce system fit together.
When an SAP consultant is initially training and seeking to update their skills later in their careers, it is necessary to periodically review the portfolio of solutions to see how they have changed, and how the rebranding process changes the conventions used in referring to those components.
SAP e-commerce has been around in some form for over a decade and been through several name changes. The concept of customer relationship and experience management has been behind many of these changes.
This concept includes (but goes beyond) the basic idea of e-commerce to add marketing, after sales services, and omnichannel relationship management into a portfolio of related solutions.
We have previously discussed the development of the current SAP C/4HANA (Customer Experience) package, so this week IgniteSAP is taking a closer look at one of those components in context: SAP Commerce Cloud.
SAP Commerce Cloud
SAP Commerce Cloud is one of five parts which together make up the SAP e-commerce platform.
These are SAP Customer Data Cloud for creation of user accounts and web forms, SAP Marketing Cloud which is mainly for managing B2B leads, SAP Sales Cloud which helps make the sales process more efficient for sales representatives (with AI and automation of processes), SAP Service Cloud, which encourages brand loyalty through friction free after-sales and service, and SAP Commerce Cloud.
SAP Commerce Cloud (as part of C/4HANA) provides businesses with a solution to leverage omnichannel commerce so that businesses can monitor and track customer behaviour through several channels and feed this into their online retail experience. This can include websites, social media and email, but is more interested in gathering rather than distributing information. Along with products like SAP Data Cloud, this can help enterprises build up profiles of their customers so that they can interact with customers in their preferred method, leading to better sales.
Commerce Cloud also offers the ability to manage a product content catalogue, allowing users to batch edit the attributes of available products on a web store, as well as manage basic commercial processes like ordering and returning of products. It also has a variety of industry-specific add-ons which help with business processes specific to an industry like telecoms, financial products or travel products.
Websites can be edited by non-technical users through a drag and drop process, saving businesses the cost of employing web developers for simple everyday changes to the look of the online shop.
The SAP Retail Consultant
So why is detailed knowledge of SAP Commerce Cloud valuable to SAP Consultants looking to specialise in the retail sector and particularly in e-commerce?
Along with the rest of the C/4HANA suite of applications SAP Commerce Cloud allows businesses to compete in the retail sector at the highest level, and the whole sector is growing rapidly.
In 2021 (according to Statistica) global e-commerce sales were an estimated $4.9 trillion US dollars, and of the next four years this figure is expected to grow by 50%, reaching $7.4 trillion over the next two years. The same study states that the current number of online stores could be as much as 24 million.
The retail market is currently massively dominated by Amazon, which has three times as many visits (over 3.5 billion) as its nearest competitor, eBay, but with 24 million potential customers for e-commerce IT consultants there is a huge market for their services.
In August 2022 Gartner Ranked SAP Commerce Cloud a Digital Commerce Magic Quadrant leader for the 8th consecutive time. At the time SAP also said:
“SAP Commerce Cloud was rated the #1 solution out of 18 in the CC report for B2B Commerce and Gartner highlighted the solution’s extensive native B2B functionality, customer management, and product management capabilities. Gartner also rated SAP Commerce Cloud as the #1 solution for B2B and B2C on one platform highlighting the product’s ability to support complex environments, multiple catalogues, and subscription management amongst others.”
C/4HANA Helps Retailers Compete
Along with all of the other issues of running a digital enterprise, like managing a complex supply chain network, e-commerce retailers have a specific set of problems that need to be constantly and consistently addressed: and most of these fall into the category of customer relationship management.
The customer base for e-commerce is dynamic and volatile. With so many retailers and so much choice it is difficult to foster loyalty in customers. The demands of customers change quickly and they expect very high standards of service. As the demographic of those making purchases online changes, further demands are made. For example: customers now expect good environmental, social and governance regulations credentials from retailers. They want to know that the money they spend will not be contributing to the world’s problems and hopefully to go some way to resolving them.
Retailers need to carefully collect data and use this to decide when, and through what channel of communication they interact with customers. They also need to build up a profile of each customer to ensure that each customer’s priorities are understood as far as possible, and that the business caters to these.
A recent study by Emarsys shows how much these two viewpoints can diverge. The research found that 61% of retailers believe that customers want to hear from them multiple times a week but actually only 31% of customers want this level of interaction. Going further, we see that 15% only want interactions when there are deals relevant to them, and 12% never want to hear from retailers at all.
This is a case of wishful thinking on the behalf of the retailers, who believe that the relationship should be as close as possible (allowing them to influence purchase decisions), while customers actually want space and don’t want to regularly feel harassed just because they bought one item from an online store.
Other findings from the study demonstrated what customers actually valued: that 50% of customers want to be rewarded for loyalty to a brand, 46% put value on good customer service, 35% want to be understood better so that products and deals are more relevant to them, 30% would appreciate closer links with the online and in-store experience and 28% want the delivery process to be better (and presumably free).
This shows that there is a need for carefully controlled interactions at all stages of the lifecycle of the relationship between retailer and customer, so that more valuable and relevant information is gathered over the course of fewer interactions. Making connections via a customer’s preferred channels of communication and with the right message is crucial when maintaining a customer relationship.
The SAP C/4HANA suite is designed to ensure that this is possible and that all interactions between retailer and customer are mutually beneficial. SAP Commerce Cloud can be considered at the core of this conception of e-commerce, bringing useful information from a customer profile to bear on the customer’s transactional process and experience: making the process of online shopping more pleasant.
SAP Commerce Cloud Works
Over the 2022 Christmas holiday period SAP Commerce Cloud platform made possible a record US $31.9 billion in digital commerce (gross merchandise value). This was an increase of 80% over the preceding year, and also showed increase of an average 29% in the value of each order.
This shows that the effectiveness of SAP Commerce Cloud and SAP CX solutions is compensating for the disadvantage of the influence of high inflation on consumer spend. Riad Hijal, the head of Marketing and Solution for SAP Commerce Cloud said:
“Despite the challenging macro-economic environment, SAP Commerce Cloud retail customers were able achieve record-breaking holiday results. Our embedded intelligence and broad capability set enabled them to identify and target the right customers with relevant promotions and offers without over-sacrificing margin. This led to higher conversion rates, AOV [average order value], and ultimately profitability.”
SAP Commerce Cloud Training
SAP consultants looking into improving their employability in the retail sector should certainly look to become familiar with and qualified to implement the SAP C/4HANA Suite as a whole, but this is a big investment and a substantial commitment in time, so starting with one module of the SAP CX package is a quicker route to employment. This knowledge and experience can be added to slowly over the course of a few years with the other parts of the C/4HANA Suite.
Another distinction to be aware of is whether you are looking to train in SAP Commerce Cloud and the rest of the C/4HANA Suite as a consultant, solution architect, or as a developer. There are many roles in this sector for those who are capable of using their developer skills like ABAP to create extensions to existing CX systems and to connect new systems to legacy and third-party components like databases, and interfaces.
If consultants follow the SAP Learning Journey for SAP Commerce Cloud they will participate in a courses and live sessions which familiarise them with the solution and the framework for an SAP Commerce Cloud project delivery, culminating in an exam to receive SAP Certified Application Consultant in SAP Commerce Cloud.
A Market for Markets
As we have seen the global online retail market is expanding and becoming increasingly competitive. As a result retailers are turning to customer experience management solutions like SAP C/4HANA Suite to help them meet these challenges. SAP has shown itself to be a leader in this area and so the market for those who can help retailers implement C/4HANA and its components like SAP Commerce Cloud is large and growing.
If you are looking for a new role in SAP for retail or any other sector our team of recruitment consultants can help you find your ideal position and negotiate a competitive compensation package so join us at IgniteSAP.