Why SAP has Unveiled AI-Powered Retail Cloud Platform

The retail technology landscape is experiencing rapid transformation as merchants seek to integrate physical and digital operations while responding to changing consumer behaviour. 

Traditional retail systems, which often operate in isolation, are struggling to meet the demands of modern commerce where customers expect seamless experiences across multiple shopping channels. Against this backdrop, SAP has unveiled a suite of retail-focused products at the National Retail Federation's annual conference in New York.

SAP releases public cloud ERP for fashion and retail sectors

The company’s flagship announcement centres on the general availability of SAP S/4HANA Cloud Public Edition for retail, fashion and vertical business. This enterprise resource planning system, which helps companies manage their business processes, brings specialised retail capabilities to the public cloud, where computing resources are shared across multiple organisations.

The platform combines finance, procurement and merchandising management within a single system, incorporating AI capabilities and pre-built integrations. These features enable retailers to connect different parts of their operations without requiring custom development work.

Balaji Balasubramanian, SVP and Global Head of Commerce and Consumer Industries at SAP SE, explains that retailers need specific functionality that general-purpose ERP systems do not provide. “SAP brings the same best-in-class functionality trusted by market leaders and recognised worldwide, now tailored to meet the scale, price and time-to-value required by fast-growing organisations,” says Balaji.

The new platform provides capabilities for managing retail operations across multiple channels, including physical stores and online commerce. It incorporates data unification features that bring together information from different parts of the business, enabling retailers to make decisions based on comprehensive operational data.

SAP targets loyalty gap as consumers express dissatisfaction

Research conducted by SAP Emarsys, the company’s customer engagement division, indicates that 83% of UK consumers feel undervalued by brands they regularly purchase from. In response, SAP plans to release a loyalty management system in the second half of 2025.

The loyalty platform will integrate with SAP’s existing commerce, service and retail solutions. It includes features for managing customer profiles through cloud-based loyalty wallets, which store information about customer preferences and purchasing history.

The system enables retailers to operate loyalty programmes across multiple brands and markets, facilitating partnerships between different retail organisations. It incorporates tools for planning promotional activities across different sales channels and tracking their effectiveness.

Financial features within the loyalty management system help retailers measure return on investment from promotional activities and manage settlements with partner brands participating in shared loyalty schemes.

SAP introduces AI shopping assistant for online retail

The company’s AI developments include a new shopping assistant, scheduled for release in the first half of 2025. This tool, which forms part of the SAP CX AI Toolkit, uses natural language processing technology to help online shoppers find products through conversational interactions.

The AI shopping assistant expands the existing AI capabilities within SAP Commerce Cloud, the company's e-commerce platform. It aims to transform online shopping by enabling customers to describe what they want in natural language rather than using traditional search methods.

Balaji emphasises that retailers need systems specifically designed for their industry to deliver personalised customer experiences. “Retailers, in order to deliver personalised experiences, need an ERP system with retail-specific processes and capabilities that are tailored to the complexities of merchandising, store operations and retail supply chains.

“Generic ERP systems lack these end-to-end retail processes and aren’t flexible enough for today's digital consumer.”

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