SAP: Retail’s future will be personalized, global

Dallas – Increased one-to-one personalization and a growing global economy are two key “megatrends” that will help steer the future direction of retail, according to Dr. Chakib Bouhdary, executive VP of retail industry solutions for SAP. Bouhdary discussed these and other trends in his Oct. 8 keynote address, “Megatrends and the Future of Retailing,” at the SAP Retail Forum 2013 in Dallas.

Bouhdary differentiated global business from international business, saying the rapid expansion of a global middle class will drive demand for products such as cars and flat-screen TVs, as well as for access to services such as hospitals.

“International means opening a local office and distribution,” said Bouhdary. “Global means manufacturing in that country for that country with an embedded model.”

In addition, Bouhdary said a new value chain where brands such as Nike can bypass traditional distribution channels and third-party logistics providers can allow pure-play companies to quickly begin serving consumers, as well as the advent of cloud computing, are creating an era where retailers and brands serve a “segment of one.”

“Sixty to eighty percent of people willingly share information with a retailer,” said Bouhdary.

To capitalize on this situation, Bouhdary said retailers must use Big Data technologies like SAP HANA to collect personal customer information and provide optimized offers based on their individual histories and preferences. In the case of mobile customers, a personalized upsell or cross-sell offer is 30% more effective when delivered within two seconds of initial product selection.

“The world will be run by algorithms,” predicted Bouhdary.

Bouhdary concluded by saying retailers will take a renewed interest in supply chain, since one-to-one segmentation will not produce effective results unless customers can get promoted products in or near real time.