Main content

Is SAP's CX for industries move ready for prime time? SAP customers share their challenges - and wins

Jon Reed Profile picture for user jreed October 24, 2023
With the SAP CX Live virtual event set for this week, it' s time to take stock. Generative AI news is sure to follow, but AI can't help without a clear plan for applying customer data. How does SAP's industry CX offering stack up against retail challenges? Let's find out.

Aaron Bradley of Wella Company talks SAP CX
(Aaron Bradley of Wella Company talks SAP CX)

Much has happened since I last wrote about SAP CX  - and delved into SAP's CX for industries pivot (Is SAP serious about CX?).

With SAP Customer Experience Live happening Wednesday, October 25 (free with registration), it's time for a CX customer review. (Note: companion news release is out, SAP Debuts New CX Generative AI Capabilities.

I still believe SAP CX is flying under the radar more than it should - though there was a full SAP CX for industries track keynote at SAP Sapphire Now (replay is still available). But under-the-radar doesn't mean SAP's CX moves are inconsequential, though I do know some CX industry analysts who are, as yet, unconvinced.

To be fair, I still need convincing also. Customer adoption at scale - with loads of happy customers showing results - is the high bar required. That holds not just for SAP, but for any vendor, for any technology. Still, documenting SAP's CX pursuits is worth it.

Why? Because I don't see how SAP can fulfill its vision of providing modern, end-to-end experiences without a strong CX data/apps play (SAP uses the word "intelligent" rather than modern; I prefer the latter).

SAP CX for industries - lessons from retail customers

SAP's CX industry focus includes retail, consumer goods, utilities, and automotive. With NRF's "Big Show" on the horizon in January, I chose retail for a deeper dive. My pursuit started at SAP Sapphire 2023, where Ritu Bhargava, President & Chief Product Officer, Industries & Customer Experience (CX/CRM) at SAP interviewed Aaron Bradley, Vice President, Technology & GTM Innovation, Wella Company during the SAP CX keynote.

Wella Company is similar to many SAP CX customers in this respect: they are headlong into a future where B2B and B2C is blurring. For Wella to be an exceptional beauty company, the customer experience must be individualized across channels. As Bradley told SAP Sapphire attendees:

A company like Wella has over 140 years of innovation, so we're always coming out with new products, and the pipeline for our actual products is incredibly exciting. But from a digital standpoint, it's Wella One - a single entry point for all digital channels.

That digital convergence is not easy - and that's where the SAP CX relationship comes in. Bradley continued:

It's an incredible shift from business entity to individual. What that means is we've had to take a step back; we've had to look at the whole digital landscape that we own, and look at capabilities - and not technical solutions - for independent user experiences. Wella One provides this central location for us to really understand you as an individual - and help your business grow. Because if our customers grow, we grow.

Levi's - putting SAP commerce to the operational test

But for SAP to achieve its CX for industries vision, a personalized experience across channels is just one result, albeit a major one. SAP believes its ability to connect operational data with customer relationships can make a big difference for a fluid customer experience. Contrast that with the disjointed "experience" we run into all too often, where different points of contact don't understand our history - much less our product's location, or preferred SKUs.

How does that stack up with Levi's experience? During an online customer event, we heard from Yulia Groza, VP of Ecommerce Technology, Levi Strauss & Co:

In terms of SAP and Levi's partnership, it's been quite a long time. We've been together for 21 years, and leveraged solutions all across our business units, from technology platforms to Concur, consumer and customer experience, online and more.

For Levi's, that meant adding SAP's Commerce Cloud to the mix. Groza added:

We adopted the SAP Commerce Cloud as the backbone for our direct to consumer business, as well as our B2B wholesale business and it's also the backbone for our omni-channel solutions as well. 

Levi's isn't done yet, but the results validate the direction:

We've seen dramatic results, including our best holiday ever from a technology and platform stability point of view. We're actually achieving zero downtime for our releases, whenever we bring new features to our consumers. We continue to evolve this platform in conjunction with recommendations from the SAP architecture team.

Customers like Levi's are upping their data game, often by investing in Customer Data Platforms (CDPs). But retailers won't get digital traction with CDPs alone - unless that data translates into personalized treatment of customers. Groza:

With SAP Commerce Cloud, we're looking to maximize the usage of this data to understand all the consumer preferences and perspectives on competitors, purchases, trends, potential future purchases, behavior. We try and reach them wherever they are, in unique ways. We aim for frictionless experience across all the channels  - and with rich personalization at every point of engagement.

To get this right, we don't separate "experiences" from logistics anymore. We don't separate loyalty programs from inventory visibility. Levi's knows that in the end, customers only see one channel.

We have to think about about our brand and pricing and assortment. For different shopping channels, it's the same - digital store, marketplace, wholesale - all the channels. Keeping seamless brand value and experience is essential, because if you look at it from the consumer and customer perspective, there is only one channel: our brand.

The retail context is changing - can vendors keep up?

During a recent catchup, I asked Bhargava what retail customers need from SAP. She emphasized a few points:

  • Industry lines are blurring, and so are business models. Example: automotive companies need to think like retailers. Companies across industries are looking at subscription offerings (shifting from "ownership," as in owning cars, to "subscribing" to them).
  • All of this is powered by savvier use of data, to increase "localized" personalization in global markets.
  • This data emphasis lays the groundwork for incorporating more AI functionality, which, not surprisingly, will be a big news emphasis at SAP CX Live this week.

As Bhargava told me:

The retail context is definitely evolving as well, to total cost of ownership of a solution versus total cost of implementation. Both of them are top of mind for some of the biggest retailers in the world right now.

Bhargava noted the example of customer Swarovski, which is engaged in a major luxury brand transformation. Are you selling diamonds? Or are you selling something more than physical products? If so, your "brand experience" better be consistent across stores and channels. As Bhargava puts it:

They are positioning themselves as a luxury company rather than just created diamonds, as they call them. That's what Swarovski says their transformation is: it's global. It's not just how your experience will be at an airport. Because if you go to any major airport, you'll see Swarovski there. It's about how it will be installed, how it will be online. They're definitely thinking of this as a global transformation with data, really thinking of this as not just one point. Understand the convergence again - of retail and other industries. So it's getting complicated. It's not just siloed industries anymore.

During the SAP CX customer event, Dr. Lea Sonderegger, Chief Digital and Information Officer at Swarovski, shared their omni-channel SAP story:

Our customers' view is very similar [to Levi's]. They are also asking for these omni-channel experiences. Here, we really bet on this 360 technological architecture, which was also mentioned by Sven [Denecken] and then Ritu before, and which we are also about to move fully in the cloud. We are connecting our technical back end with modern front ends for example - such as Fiori - to build these omni-channel experiences, like click-and-collect, or the endless aisle our customers are asking for.

These projects are ambitious in scope, but: if you want to maintain buy-in, early results matter too. As the customer session came to a close, I asked what benefits are being achieved. Levi's Groza responded:

Both SAP's B2B and B2C commercial products are actually providing support for [personalization features] like custom colors. It allows our brands to own the consumer experience and optimize it for specific devices, and specific needs. So we're very grateful for this partnership.

Then Groza hit on an important thing SAP needs to make good on: so-called "headless" CX, where customers can also plug in other tools and content frameworks. "All SAP all the time" isn't going to work for CX:

That should build fast to market solutions and new features, or even applications. It also brings flexibility to development teams - very close to my heart - to use any content methodology or framework without being limited by back ends. Security and scalability are other benefits to leverage that [SAP is offering.] And that the SAP products are available as a headless platform for both B2B and B2C offerings.

Sonderegger added that a "holistic" approach to CX wil prevail:

I'm personally 100% convinced the beginning and leading brands will be the ones that put the customer journeys holistically at the center. This can be only done if the technological backbone, the digital setup, is looked at holistically, not fragmented - but really providing that connected data profile, the connected processes, and this is what we have also worked towards, to wiring the back end and the front end to in the end, make one person out there happy - and that's our customer, our "queen."

My take

For SAP to excel at "CX for industries," it must paradoxically start by narrowing the scope. Too many vendors think you can just roll out functionality for a particular industry, claim it, add it to your "industry cloud" list, and move on. A true industry play involves internal industry leads, expert partners, micro-vertical support including partner add-ons (in SAP's, via BTP) - and, ultimately, a vibrant business community around that industry play.

Yes, I am applying a high bar again, but if you want to stack up project wins and brand references, this is how it's done.

On paper, SAP's CX for industries value proposition makes absolute sense. But even as industry silos are broken down, there remains a need for peers to convene, to swap project stories and drill into benchmarking. Virtual events have their place; truly interactive virtual events remain, somehow, underrated and underutilized.

But next spring, I'd like to see SAP CX Live embedded further into SAP Sapphire. This fits well with the industry pivot, and creates an opportunity to merge CX experts with industry leaders. Granted, a previous "co-located" SAP CX Live event didn't go well, but let's be real - a "co-location" that means a 15 minute walk baking in the Orlando sun doesn't really qualify as co-located. I'm talking about embedding one event directly into the other.

Then there is AI. Tomorrow's SAP CX Live virtual event will certainly talk plenty about AI (I'll add links to any major news). This is not necessarily at odds with what customers want to hear - as long as the emphasis remains firmly on getting the data platform right - as well as the customer experience. A comment from Sonderegger summed this up well:

We have three main principles developed in Swarovski: one is really to protect the uniqueness of human creativity. We have a wonderful creative director; creativity is a key element of luxury. There is this human element to it, undoubtedly.

Use AI for the key decisions or data, but the human should have the final word. AI should not overtake our human brain power and decisions. And finally, we should not overwhelm the customer. Use AI where it's right, and don't use it where it's not right.

When customers embrace this type of mindset and AI and human creativity, I like their chances. Let's see what we hear Wednesday.

A grey colored placeholder image