The Swiss retail industry with its more than 31,700 companies is extremely diverse. In 2021, around half of the turnover of approximately 102 billion Swiss francs was attributable to the ten largest and best-known retailers. These and other large companies have always been served by industry leader SAP with its ERP solution "SAP for Retail".
While this segment has been moving to the cloud for several years, many medium-sized retail companies outsourced their core processes to smaller, local IT partners a long time ago and work with in-house developments created around the turn of the millennium or with competitor solutions adapted to retail. These have grown over the years and are reaching their technological limits more than ever. New business requirements such as omnichannel or click and collect are difficult to implement or only with great effort. In addition, these software solutions are usually poorly documented; the remaining knowledge is distributed among a few developers.
In order to withstand the pressure to innovate and compete, modern and sector-specific solutions in the public cloud would actually make sense. However, while the market offers a very broad range of solutions for human resources, finance or marketing processes, the selection of core retail processes is limited to very few competing products.
SAP now wants to fill this gap with a public cloud solution developed specifically for this market segment. Similar to the strategy in other industries, where SAP has long offered a scalable solution from the public cloud that is tailored to medium-sized companies, the company has now also adapted its ERP product for the retail trade to the needs of medium-sized companies. The result is a new software as a service, in which the companies can activate modules and functions in line with their individual business requirements and which is scalable to further company divisions or companies. The traders are to rely on standardised, proven processes for their core business instead of fulfilling every individual wish with additional developments as in the past.
SAP has preconfigured processes and best practices from many customer projects or adopted them as the basis for the code of the completely newly developed solution. A major advantage of mapping standardised processes in the core business is the shortened implementation time of only several months. Since it is a "Software as a Service" offer, the latest innovations are automatically imported twice a year through regular updates, which can be used immediately.
The medium-sized retail trade will not be able to avoid rethinking its strategy of the existing merchandise management systems due to technological restrictions as well as due to the increased demands of the clientele and the general time and cost pressure. The vision for the future here, as in most industries, will be to make IT management more efficient with software from the cloud. But the retail sector in particular, which is driven by changing consumer desires and habits like no other industry, must bring speed to its business - speed in the implementation of projects, speed in the handling of processes with shorter reaction times and, last but not least, speed in the implementation of innovations.
The market shows that smaller retail companies are quite willing to review their processes and adapt them to the SAP standard in return. For this purpose, SAP addresses classic retailers that operate physical shops and digital channels with its current version "SAP S/4Hana Cloud, Public Edition". In a first step, these are at least several hundred companies in Switzerland with between 20 and 200 shops - mainly grocers, non-food retailers, health food chains, smaller DIY chains and speciality retailers. Later, the solution will also serve fashion retailers as well as brand manufacturers and vertical retailers with all business models (manufacturing, wholesale, retail).
The indirect sales strategy, which allows partners to offer all services for the product from conception to implementation to operation, should also succeed in addressing medium-sized retail companies at eye level and removing their usual reservations about the SAP world ("too big", "too powerful"). In the process, partners with their industry-specific add-ons will also be able to make their contribution in this market segment to expand the standard processes with absolutely necessary, targeted improvements. In view of the continuous change in customer expectations, the difficult economic conditions and technological progress, it is to be expected that in five years 90 percent of medium-sized Swiss retailers will rely on public and private cloud solutions.
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About retailsolutions AG
retailsolutions AG is one of the leading retail consulting companies for SAP solutions in Europe. From the locations in Switzerland, Germany, Austria, UK, Sweden and Spain, more than 280 consultants support retail companies throughout Europe. The portfolio includes solutions along the entire value chain. The company owes its extensive expertise not least to the close partnership with the software manufacturer SAP, from which it emerged in 2005 through a spin-off.