SAP Commerce Cloud: The Largest Digital Commerce Solution You Didn’t Know About
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The year 2020 proved to be challenging for most businesses across the world. Even the ones that are ending the year on a successful note had to “pivot” and make changes to business plans, processes, and models in order to meet customer demand. Customer experience took on a whole new meaning in 2020 and found its way in the discourse among the masses as well as in the board rooms. SAP made it a focus of its overall company strategy, and SAP customers looked to the CX portfolio for solutions that would help them not only survive the year but thrive into the next.
ASUG sat down with Paula Hansen, SVP and chief revenue officer at SAP Customer Experience, to learn how the company known for producing enterprise resource planning software actually served up the world’s largest digital commerce platform in 2020. SAP Commerce Cloud has helped customers register at least $109 billion of GMV in November 2020 which is 7.9 times higher than November 2019.
“There is a lot of movement happening in the world of commerce today,” Hansen said. “And it makes it critical to understand the importance of the scalability and the resiliency of your commerce providers.”
We discussed a high-level overview of the SAP CX portfolio and jumped into the capabilities of SAP Commerce Cloud, which in 2020 manages more than $520 billion of GMV—more GMV than any other company on the planet. It also manages roughly 3 billion identities globally and more than 7 billion consents globally, which is remarkable when you put it in the context of the world population.
ASUG: Can you give us a high-level overview of the SAP Customer Experience platform? How does it tie back to the Intelligent Enterprise?
Hansen: Customer experience is an integral part of SAP’s Intelligent Enterprise portfolio and strategy, and it is one of the largest growth engines for the company’s cloud strategy. Customer experience powers seamless and personalized experiences everywhere.
I often think of the SAP CX platform and portfolio as supporting our customers in the most critical goals of their business. Virtually every company in every industry is trying to do three things: acquire customers, retain customers, and grow their market share. And so, when you think of the customer experience portfolio—from marketing to sales to service to commerce, and the supporting customer data—we help them to achieve those goals through customer understanding, through hyper-personalized omnichannel engagement, and by helping them to deliver on their brand promise.
When you think of it in the context of the Intelligent Enterprise, which is the interconnection of all the business processes that our customers run, customer experience is a very important component of being able to drive greater insights and more agility within an enterprise.
Think about how business operations really start to become more visible to a company. It’s through the collection of data and gained insights from every single customer touchpoint in marketing, sales, service, and commerce. Those interactions are most valuable when they get access to some of the back-office information like financial information for pricing, inventory information for supply chain, and even HR information in some cases as it relates to customer service. That integral component of the Intelligent Enterprise helps to bring exceptional customer experience. The last element, of course, is that all the things I just spoke of are operational processes with a rich set of operational data across the front end and the back end. But then there's also the experience information that is so critical to keeping a real-time pulse on what your customers are telling you so that you can continue to evolve the business processes in the goal of delivering exceptional customer experience.
SAP designed the CX portfolio with the lens that customers are running an end-to-end business and delivering on an end-to-end customer journey. But there's no question that most companies look at that in phases or look at that in terms of unique needs by their business function. All the individual cloud services—SAP Commerce Cloud, SAP Customer Data Cloud, SAP Sales Cloud, SAP Service Cloud, and SAP Marketing Cloud—operate very well independently as much as they do as a collective portfolio.
ASUG: What do customers need to know about CX as they plan their digital transformations?
Hansen: I would argue that companies can’t really realize digital transformation without customer experience being an integral part of that transformation. It’s important to define what customer experience means and how it touches so many elements of a company’s business to really make that point.
You can't really deliver a standout customer experience unless all aspects of your business are unified in support of your customers and in support of your company's brand promise. Of course, you'd have to have compelling products and solutions—your offer. But how you deliver on that offer—whether it’s through the supply chain and your ability to meet the needs of your customers; or the way that you evolve your business model and transform the markets that you're in; or the way that your employees are supported, enabled, and motivated—it is all part of customer experience.
It really is about so much more than what people have thought of in the past, which has in some ways been exclusively around this concept of customer relationship management. We need to understand that customer experience involves all those different processes and how those come together and present themselves in support of your customer. And that's why we feel strongly that if an organization is looking at digital transformation without customer experience in mind, they've probably really missed the ultimate goal of digital transformation.
ASUG: Is there a particular solution that customers chose to start with? If so, why do you think that is?
Hansen: I think it depends on where they are in their digital transformation. In 2020, digital transformation has become the top agenda item for all our customers, and COVID-19 has certainly accelerated that. There is tremendous momentum in the digital commerce space as it has become the lifeblood for many companies.
When we look at consumer spending, the estimates are that roughly 12% of the total was from online sales last year. It is expected to increase to 20% this year. Here in the U.S. there's expected to be $200 billion of sales moving from offline retail stores to online digital presence.
So, there is incredible momentum from customers toward adopting a commerce solution that will enable them to not only remain competitive, but also agile and resilient.
ASUG: Let’s talk about the SAP Commerce Cloud. Can you give us a high-level overview of the solution and how it has evolved since it was known as SAP Hybris?
Hansen: SAP Commerce Cloud—which was formerly known as SAP Hybris—is a digital commerce solution that enables an easy and seamless buying process for customers. SAP has been in this business for a long time and what that means for our customers is that the SAP Commerce Cloud is a battle-tested solution with extreme scalability. Today, SAP Commerce systems are managing more than $520 billion of GMV, which is more GMV than any other company on the planet.
As more customers embark on digital transformations, SAP is more and more focused on delivering quick time to value. Companies want and need to be able to move quickly with their commerce deployments, and we want to provide the platform that will help them do that. We’ve done a lot of work around the microservices architecture and headless commerce to really help enable a faster time to value.
The other piece that we've been really focused on is the buying experience and how we bring about capabilities like AI-powered engagements, context-driven capabilities, and, of course, that interconnection with the back-office supply chain to bring forward the visibility customers need.
We're also very focused on extensibility with an API-first approach and ensuring that there is opportunity for companies to add capability and extend the value of commerce out into other ecosystem solutions.
ASUG: What differentiates the SAP Commerce Cloud from other comparable solutions, and what is the most important thing for SAP customers to know? How, specifically, does it translate to better customer experience as well as better business user experience?
Hansen: The first major differentiator for SAP is the ability to address multiple business models with a single platform. With the SAP Commerce Cloud today, you can engage with your customers in a B2B, a B2C, a B2B2C, or direct-to-consumer way all with a single platform. That’s incredibly powerful when you think about what's happening in the world today with the pandemic and companies’ needs to be able to quickly turn out other routes to market.
I would also highlight SAP Commerce Cloud’s ability to enable meaningful engagement. When companies build the community and the experience within their commerce platform, they need to think about being able to engage with their customers in a meaningful and personalized way. That’s where the components of our newly launched SAP Customer Data Platform, as well as the recent acquisition of Emarsys, come together to enrich that commerce experience. While it's incredibly important that SAP Commerce Cloud is a scalable, agile, and feature-rich capability on its own, it's also extremely powerful when you think about how you surround it with the customer data capabilities that we have and the real-time engagement capabilities that we have with the rest of the portfolio.
ASUG: How does SAP Commerce Cloud integrate with other SAP and non-SAP solutions?
Hansen: SAP Commerce Cloud has pre-built integrations with SAP S/4HANA, all the solutions with the SAP CX portfolio, as well as other SAP applications.
We have decoupled the front-end storefront and the back end with a headless commerce architecture, which makes it easy for extensions and updates, as well as a quicker time to value for our customers. We’ve also made it easier to innovate with serverless microservices that run on a cloud-native platform.
More specifically, we have 30 different integration extension packs that provide a tailor-made solution for customers to connect other SAP products—whether it’s billing and invoicing, CPQ capabilities, service and support, order and availability, master data and analytics, or subscriptions and entitlements—to SAP Commerce Cloud. There are also 86 extensions that integrate SAP Commerce Cloud with a range of several other backend systems in the SAP Intelligent Enterprise portfolio to help with the synchronization of the data between the front end and the back end.
As far as third-party applications, we're very committed to an open ecosystem and an extensibility framework. We have our SAP App Center where partners have developed solutions that can be integrated with SAP Commerce Cloud, and we will continue to make that available to help with the broader ecosystem and the extensibility of SAP Commerce Cloud.
ASUG: What are some areas that require more work with the solution and how SAP addressing them?
Hansen: One of the key focus areas for us is to continue to drive time to value, especially as more customers continue to move quicker. We have quite a bit of focus on that in terms of how we're evolving the architecture, and so that’s one key component.
Theirs is also always an interest in user experience and continuing to simplify user experience, as well as an interest in continuing to advance the AI and ML capability for more automation, more self-service, guided recommendations, pricing, merchandising, etc. That’s always on our road map and something that we're thinking about as we look to evolve the portfolio.
ASUG: What were the key takeaways with the SAP Commerce Cloud solution in 2020 and how did COVID-19 play a role?
Hansen: One of the things we've seen are new business and consumption models crop up because of COVID-19. Companies have had to meet demand and change to models such as “buy online and pick up in store,” “click to collect,” and “direct to consumer.” The takeaway is that organizations need to rethink their path to market and how they must evolve those to continue to service their customers.
I can share an example of a retailer that did this successfully. Casey's, which is a Midwestern convenience store chain, had to quickly adapt through the pandemic. The traditional business model was to sell prepared foods such as pizza and sandwiches along with different grocery items. But because people weren't coming into the store as frequently, they had to think about how they were going to engage with their customers in a more digital way while keeping a focus on customer experience. They partnered with SAP Commerce Cloud and the SAP Customer Data Cloud to bring to the market a mobile app for their online orders. The goal was to increase the average order value per customer and increase the amount of traffic that they were driving online. They had more than 3 million downloads of their mobile app and are seeing roughly 65% of their digital revenue coming from this mobile app within a six-month period. They’ve also seen an increase in their average order value per customer.
Research shows that people want many of the conveniences and experiences to continue well beyond the pandemic. We fully expect that commerce everywhere is going to continue to be a very highly sought-after business capability. Similarly, we know that sales and service models that have moved to remote models because of the pandemic will be sought after by those employees that want the flexibility to work from home. The other piece that has come out of this pandemic for businesses is to continue to provide that connectivity, and that means hyper personalization. It means that when we’re interacting with a brand that we feel that connection, and we feel like they understand our needs and that they're evolving to meet those needs. I believe all of this will continue and accelerate well beyond the pandemic.
ASUG: What are the three things you think contributed to SAP Commerce Cloud being the biggest digital commerce solution in 2020?
Hansen: The first is just the interconnection with the supply and the demand. I think people understand the significance of having the direct connection into the back office to be able to deliver on the commitments that they make to their customers at the time of commerce.
The second is the business model flexibility that SAP Commerce Cloud provides to be able to support various types of business models across the single platform.
And the third is the focus that we've really built into the SAP Commerce Cloud around context-driven capabilities, really helping to bring forward the knowledge of what a customer wants and be able to respond to that during the buying experience.
ASUG: What are the trends you predict in the commerce space coming into 2021 and how will they align with SAP’s key priorities in the customer experience space?
Hansen: It’s very clear that SAP’s CEO Christian Klein, as well as the entire executive board, see customer experience as a critical part of the company strategy. As we look to 2021, we are committed to not only making customer experience a priority for SAP, but one that we will continue investing in. There are three key priorities we will tackle.
The first is focused on personalized shopping experiences that are frictionless from search all the way to the transactions. They need to be mindful of how the customer wants the product, when they want the product, where they want the product, and really helping with that commerce-everywhere experience. It is critical to have that interconnectivity to the back office to realize the value of a connected supply chain.
The second focus area is providing data-driven experiences. It’s about having a real-time, 360-degree view of your customer that connects offline to online, and that provides for an omnichannel experience. It really takes that customer experience to the next level, because now you are hyper-personalizing the way that you're engaging with your customer, while still building into that the privacy capabilities with consent management and identity management.
The third focus area will be on how to enable companies to engage with their customers at scale and through different channels, while leveraging all the insight they gained through previous experiences and through the SAP Customer Data Platform.
That’s what customers are looking for and that's how we look at it as we go into 2021.
ASUG members can register for the on-demand webcast, “SAP Customer Experience Management Strategy and Road Map.” You can also learn more about the SAP Customer Experience strategy with an exclusive one-on-one with Adrian Nash, head of strategy for Customer Experience at SAP.
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