The Retail industry has been one of the hardest-hit industries during the COVID-19 crisis. The industry had to pivot faster than many to cater to an evolving market need and customer expectation, amidst social distancing measures and supply chain disruption. Ecosystm’s Digital Priorities in the New Normal study finds that nearly 83% of organisations in Asia Pacific’s Retail industries were forced to work on digital transformation (DX) in the aftermath of the crisis (Figure 1).
Retail organisations that had not walked the DX path found themselves struggling to cope in recent times. Ecosystm Principal Advisor, Alan Hesketh says, “Digital transformation in retail, as represented by deep customer understanding and omnichannel operations, is far from new. Industry leaders launched these activities almost 20 years ago and continue to aggressively develop these capabilities. Retailers not actively leveraging these capabilities to understand their customer preferences are at a massive competitive disadvantage.”
Anta Group Accelerates DX
The Anta Group, a sports products manufacturer based in China with over 12,500 stores, has launched a group-wide digital platform designed and deployed by IBM Services based on SAP S/4HANA. The initial phase of Anta Group’s DX included creating intelligent workflows and was completed in January 2020. This enabled the company to adjust its retail operations and switch to quickly to online channels during the COVID-19 pandemic.
Like any retail organisation, the Anta Group realised that their product offerings had to be diverse to cater to an evolving customer base. This growth required an upgrade to a group-level management platform to help the business run more efficiently across the entire value chain of procurement, supply, production and sales. The SAP S/4HANA platform gives the senior management a single view of data across business units to help with better decision making regarding production and sales optimisation. The company claims to have improved its supply chain efficiency by 80%, that has led to faster delivery and business growth even in these difficult times.
IBM Services has a role to play in providing the business intelligence required for agile decision-making. By integrating data from multiple sources – retail stores, multi-brand products, channels, customers, suppliers and finance teams – on the one platform can help Anta Group to settle accounts quickly and issue business analysis reports for different entities as well as a real-time view of the operation across the organisation.
Hesketh says, “Retailers must have an accurate, timely understanding of their customers’ behaviour and resulting sales performance. COVID-19 has dramatically increased the volatility of sales, making rapid recognition of changes essential. For those lagging in their digital transformation to acquire this understanding, an attractive option is partnering with organisations with demonstrated relevant capabilities; in this case with SAP, for the capabilities and performance of their in-memory product, and IBM for their configuration and implementation expertise.”
IBM and SAP evolving their partnership
In 2016, IBM and SAP had expressed intentions of increasing investments to help their customers on their DX journeys. As some economies move into the recovery phase, all businesses will be forced to transform – or keep transforming if they are already along that path. Last month saw IBM and SAP announce the evolution of their partnership with new offerings to help businesses transform faster. The next evolution of the IBM and SAP partnership aims to focus on faster DX time to value, innovation through industry-specific offerings, customer and employee experiences and providing flexibility and choice to organisations to run their workloads in hybrid cloud environments.
Hesketh adds, “But the product and implementation partners are, while important, not the real determinant of the success of DX activity and time to value. Retailers must recognise and commit to the strategic reshaping of their business, taking their large workforces with them on the journey. This is a high-risk change. A strong relationship between product vendor and implementation partner, as SAP and IBM demonstrate here, assists in reducing, not removing, this risk.”