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Why SAP S/4HANA for Grocers

Published on 4 June 2021
SAP S/4HANA for Grocers
Alan Young
Alan Young
Vice President and General Manager

Alan Young is the Vice President and General Manager of Professional Services at Applexus. In this role, he manages the Innovative Services, Consulting, and Application Management Services (AMS) teams to help clients plan for innovation, implement digital transformation initiatives, and enable continuous business process improvement program.

We have entered an era of digital transformation where everything is interconnected.  Gone are the days when grocers could rely on mass mailings and email campaigns to support their business. From coupon clipping to promotions on grocery apps, the customers have now moved on to driving forces like time-saving, convenience and ready product availability.

For grocers, the customer is a key component to attaining operational excellence. Customers share their preferences, location, price sensitivity, and basket sizes through their browsing and buying behavior. With SAP S/4HANA’s near-real-time dynamic pricing, promotions, shopper targeting, inventory management, replenishment, and marketing campaign management, grocers now have a wealth of information about their customer that can be leveraged to drive better results.

Moreover, S/4HANA helps grocers keep pace with faster innovation cycles to address tough questions such as “how do we build a customer experience that competitors cannot easily replicate?” or “how can we seamlessly add new product lines or markets?” or even “how can we introduce new business models to stay ahead of our competitors and increase our ROI?”

Operational Excellence with SAP S/4HANA

Compared to SAP ECC, SAP S/4HANA provides grocers a streamlined data model, embedded analytics and AI capabilities, providing end-to-end support for core grocery functions, including master data management, product pricing and promotions, inventory management, point of sale and corporate accounting.

SAP S/4HANA for Grocers

Functional Benefits of SAP S/4HANA for Grocers

SAP S/4HANA provides improved functional capabilities to support the strategic priorities of grocers. Some of these priorities include:

  1. Fewer markdowns: Grocers deal with perishable and seasonal items which need to be kept readily available, but not overstocked.  With S/4HANA, grocers have improved visibility to inventory movement for more efficient management for these products and more effective product ordering.
  2. Fewer stock-outs: Supply chains can be complex, especially those involving suppliers from the Eastern European countries which require a higher degree of agility to support longer lead times and shorter product shelf lives. S/4HANA supports automated product procurement tracking with the ability to quickly adjust suppliers or delivery schedules to support fluctuating demand.
  3. Lower inventory costs: As compared to earlier systems where inventory data was distributed across many tables and was often outdated, it is now harmonized in a single repository. If stock runs low, a grocer can centrally take an action and place a repeat order in a timely manner. This ensures that the bottlenecks occur much less often, reducing the inventory costs.

S4/HANA Use Cases for Grocers

S/4HANA supports grocers’ ability to innovate, which drives competitive advantage and improved results. But how can a business such as grocery leverage the benefits of a migration to S/4HANA?

Promotions

Using embedded analytics and AI, grocers can more easily create targeted promotions and loyalty programs. S/4HANA can also enhance the marketing experience for customers who have shown a past inclination to spend which can provide grocers with customer insights such as spending power, preferences, etc., all of which can be aligned to promotional campaigns.

Shopper Targeting

S/4HANA’s customer analytics can help grocers identify customer demographics to create focused, customized offers targeted at a specific group of shoppers and develop automated campaigns for these customer segments, reducing marketing budgets and utilizing them more efficiently to achieve better ROI.

Dynamic Pricing

Experience has shown that grocers can see results in as little as six months by applying S/4HANA to pricing. By pricing their products correctly, grocers can realize significant margin improvements and increased profits.

Inventory Management

Embedded analytics can forecast demand and recommend better replenishment methods so that grocers can determine if offering a new product, changing the product assortment or adjusting inventory levels will have a positive or negative impact on sales.  With S/4HANA, grocers can identify optimum inventory levels, reducing inventory costs and increasing gross revenues.

Greater Synergy for Grocers with SAP S/4HANA

Reconfigured with substantially simplified data models and procedures in important areas including inventory management and stock valuation for high throughput and quick reporting in essential activities, the end-to-end SAP S/4HANA migration process ensures grocers a more stable, controlled and manageable journey by freeing up resources to focus on business priorities. It’s therefore just a matter of choice for grocers to stay up with customers' expectations of world-class shopping experiences, omnichannel order execution and fulfillment through optimizing inventory management and improving their cash flow based on real-time sales and inventory information.

Through our "RunningStart" methodology, Applexus incorporates best practices, pre-configurations, and industry-specific accelerators to reduce implementation costs, leading to faster time-to-value. Together with SAP’s Activate approach, Applexus helps grocers achieve a lower TCO.

For a complimentary assessment of how SAP S/4HANA can benefit your business, reach out to us here.

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