SAP Watch

Jan 19 2007   12:17PM GMT

More on retail trends with SAP exec Rick Chavie


NEW YORK — I made the four hour drive (no traffic, two Dunkin' Donuts stops) from Boston down to the National Retail Federation conference at the Javits Convention Center in New York this past week. It was my first time, and it turned out to be quite the exhibition, with over 16,000 attendees and 520 exhibitors. All the usual suspects showed up, with Microsoft, IBM, Oracle, and SAP occupying large booths at the four entrances to the show floor.

Oracle bested SAP in the snacks department with a wide array of choices and coffee available all day, although they were all self-service offerings. SAP boasted a two-level booth, definitely the most, um, vertically focused display at the conference.

I had a chance to talk with a couple executives in the loft area of the SAP booth, including Rick Chavie, SAP's senior vice president for trading industries. We ran a Q&A with him on earlier this week. Here are a couple additional topics that didn't quite make the cut:

Chavie on some issues in the retail market that are especially interesting:

One interesting thing is that retailers are looking to get all their common data into a system and optimize against it. So, they're asking how to take all their multi-channel, multi-national, multi-format data, do meaningful calculations against that data and execute to avoid common problems like having lots of inventory piled up for all the different segments we're going after.

We also want to build tech around trends — customer and product. Take the music industry for example, where things can spike and collapse very quickly. How can you manage all of that volatile product behavior, and at the same time, how do you identify products that are going to succeed, very early on?

When you factor in that 90% or 95% of new product introductions tend to not succeed in their first year from a profit standpoint, it's a lot of important choices for a retailer to make. So they have to be able to make very quick, informed decisions. In order to be successful, retailers have to be able to find that differentiated edge and scale up very rapidly.

Chavie on more of what to expect from SAP going forward:

Another thing we're looking at is around the multi-channel, multi-industry model of how SAP develops not only capabilities, but explains how to enact scenarios across channels and bring solutions into a company in ways that they didn't experience in the past as they look to grow.

Chavie on what international retail customers are looking for:

What they're looking for in Europe is to go into emerging markets further east — whether that's Russia, or the Middle-East, or wherever — and they need to be able to adapt to the local environment.

If you look at Asia-Pacific, they're looking for a lot of best practices, especially in India and China. They want to import best practices right away, because it's tough to find the management talent required to grow as quickly as they would like. India, since it is such a wide open market, is also looking for new models.

Jon Franke
News Editor

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