If there was any lingering doubt about the crucial role technology, particularly generative AI, will play in the future of the retail sector, it was thoroughly dispelled by SAP customers during the National Retail Federation’s (NRF) annual Big Show in New York in January.

Retailers are looking at new technology tools like AI to help them move into new channels and discover new growth streams, enter new markets and find new ways to engage with consumers, and work with suppliers to find efficiencies in their supply chain, Kristin Howell, SAP’s global vice president of Retail Solution Management, said.

“There is a tremendous market out there for retailers to utilize AI and improve their business processes,” she said during an open theater session at the SAP booth during the show.

Over two days, retailers who came to the SAP booth spoke about the challenges they face, talked about data, data management, and the opportunities presented by AI, and heard about how new solutions and services from SAP tailored specifically to the retail sector can help them become more efficient and serve their customers better.

SAP officially launched the SAP S/4HANA Cloud Public Edition, retail, fashion, and vertical business solution at the show. The new solution helps centralize operational data and can integrate finance, procurement, and merchandising processes.

“Whether you’re a franchisee with a handful of stores or the biggest retailer out there, there’s a certain level of complexity that comes with running any retail business, especially with consumers who expect a very flexible fulfillment experience,” Howell said during a press briefing. “In order to really fulfill these expectations profitably and meet the needs of these consumers, we believe that this retail-tailored ERP solution is going to make the difference for them.”

SAP also announced plans to bolster its retail offerings with two new tools—a refreshed loyalty management cloud service and a generative AI assistant designed to give store employees and consumers an easier way to find what they need.

SAP S/4HANA Cloud Public Edition retail, fashion, and vertical business is available immediately, while the shopping assistant, which is based on Joule, SAP’s unified copilot, will be released during the first half of 2025. 

The shopping assistant is designed to make recommendations and help shoppers find what they are looking for more easily while also helping store associates close sales. Because it can be integrated into the retailer’s ERP system, users can discover specific information, like the current availability of stock.

The new loyalty management application takes data from SAP S/4HANA Cloud and applies AI to create profiles around customers and their shopping behavior and preferences.

Howell identified the customer experience in retail, including product recommendations and helping consumers search, “as areas where retailers can start consuming AI.” She also expects retailers to be early adopters of AI tools to help with their pricing strategies and to use generative AI copilots, including SAP’s offering, to ask questions and get answers immediately—about inventory for example—wherever they are.

While it’s still early days in terms of adoption, almost every retailer presenting in the SAP booth theater at the show said they are preparing to implement AI tools and some said they are already testing AI tools in specific use cases. And SAP’s retail team made it clear at the NRF show that SAP is ready to help.

They say “good things take time,” but sometimes it’s wise to not wait too long and take matters into your own hands. This is especially true when those “matters” have the power to determine business risks or give you a competitive edge, such as plastic regulation.

The world has been waiting for a global plastics treaty since 2022, when representatives from 175 nations agreed on a mandate to create a legally binding instrument to end plastic pollution. While progress has been made during the five rounds of negotiations to date, a final treaty has yet to be agreed. With negotiations set to continue, SAP has collaborated with Earth Action to launch the “Shift into Gear” report, inciting companies not to wait but to start preparing now to meet global plastics legislation.

It’s not just a reporting duty

Plastics regulation isn’t new. It has rapidly spread across the globe like a rising tide, driven by the urgency to reduce our dependence on fossil fuels and curb the plastic waste that is choking both marine and land-based ecosystems. Companies now face the growing tide of extended producer responsibility (EPR) regulations and pay plastic taxes in certain jurisdictions. Globally, the corporate liabilities linked to plastic usage are projected to exceed US$20 billion by 2030.

In this shifting landscape, SAP and Earth Action argue that plastic and data management are no longer reporting duties only, but fundamental business imperatives. Companies that fail to navigate these waters may find themselves sinking under the weight of financial liabilities, whereas those that prepare, comply with regulations, and leverage digital solutions will ride the wave, standing to gain a competitive advantage.

Disparate EPR regulations make compliance onerous and expensive

Originally designed to fund waste management, EPR regulations are now focused on the eco-design and recyclability of items. Complications for corporations arise from the variety of different EPR regulations across different territories. The report describes how one consumer goods company operating in over 180 countries can face a minefield of 30 to 50 different EPR policies, which could cost in the region of 0.5%-1% of final product revenue. For multinational corporations, this can add up to millions of euros of risk—or opportunity.

Avoidance isn’t a viable option. Non-compliance comes with significant financial risks including fines, litigation, and potential clean-up costs. Reputational risk linked to consumer protection violations, false advertising, and environmental damage is also a factor that could result in revenue loss and a decline in investor confidence.

SAP joins forces to lobby for standardization

SAP is working with the World Business Council for Sustainable Development (WBCSD) and the Ellen MacArthur Foundation, calling for industry alignment on packaging data. Together, we are pioneering a project to enable standardized data to be exchanged throughout supply chains. This can allow businesses to access and analyze materials from a variety of suppliers to empower the design of more sustainable and recyclable packaging, which can minimize waste and reduce EPR fees and plastic taxes.

Negotiations to finalize the global plastics treaty are expected to resume with delegates due to convene for INC 5.2 in 2025.

Companies should not delay

The report is clear. Companies must not wait for a finalized treaty before taking action. With a myriad of national and regional regulations already in existence, including the EU’s Packaging and Packaging Waste Regulation (PPWR) and the Corporate Sustainability Reporting Directive (CSRD), there is already work to do. Delaying compliance may leave companies lagging behind and unable to meet existing and upcoming regulations, leading to the financial and reputational risks already mentioned. Under the PPWR, for example, the penalties for non-compliance are not just theoretical—they are a looming reality. Each EU member state can impose sanctions that are effective, proportionate, and dissuasive, ranging from hefty fines to sales bans or mandatory product recalls because of non-compliant packaging. In other words, the clock is ticking and the consequences of inaction could hit harder than anticipated.

Early adopters stand to benefit from their experience and will be better prepared for the shifting regulatory field when the treaty enters into force. By proactively implementing robust data management solutions and streamlining their reporting processes, they can start to make gains in terms of circularity and sustainability. In doing so, they will obtain an unprecedented view of their plastic material flows, allowing them to unlock efficiencies and reduce risk.

Data management is critical

Contrary to an often referred to argument put forward by treaty detractors, the data organizations require for compliance does exist and can be found within existing enterprise systems. Companies should look to their enterprise resource planning (ERP) systems and financial reporting platforms. These are treasure troves, filled with procurement records, supplier data, and waste management information—key assets for reporting purposes.

Businesses should also coordinate with their suppliers and customers with a view to data sharing for resource optimization and to scale efficiencies.

Data management systems like SAP Responsible Design and Production help companies collect and use data by aggregating it from third-party systems. It can not only allow sustainability managers to accurately calculate fees and taxes but can give them a lifecycle view of indirect taxation costs and, by considering downstream recyclability and recycled content, the environmental impact of design choices. The solution can also allow users to experiment with switching materials, products, and altering supply chains, providing them with the information they need for agile decision-making.

Prepare for an ambitious treaty

Corporations must invest in their enterprise systems to leverage data and collaborate with their supply chain to meet upcoming legislation and avoid risks and penalties of non-compliance. The sooner they start, the better their competitive advantage. By utilizing data management systems to collect robust data and collaborate with supply chains, they will be equipped to thrive in the era of plastic regulation, limiting their costs, achieving sustainability targets, and complying with evolving regulations.

Read the full Shift into Gear report here.

Darren West is global head of Circular Economy Solutions at SAP.

In 2016, Paris-based consultancy firm Capgemini was looking for ways to better manage its global network of employees using existing technology. At the time, the company had limited visibility into its contingent workforce, and its procurement team wanted a tool that would help consolidate insights and track metrics such as headcount, performance, capabilities, compliance, and more. Additionally, with legislative requirements changing rapidly in different regions, the company needed technology that could quickly adapt.

This challenge reflects broader trends in the SAP-sponsored Economist Impact report titled “Flexible Futures: Navigating the Evolving External Workforce,” which dives into how companies like Capgemini are leveraging external workers to meet skill deficits and productivity demands. The report highlights how organizations are turning to innovative technologies and strategies to seamlessly integrate external talent, ensuring they stay competitive in a rapidly changing workforce landscape.

In Capgemini’s case, it used SAP Fieldglass solutions to help manage its contingent workforce program across more than 30 countries. The cloud-based solutions can integrate with other SAP solutions and leverage artificial intelligence (AI) to help optimize external workforce management, helping companies stay resilient in an evolving talent landscape. With the addition of SAP Fieldglass solutions, Capgemini has managed contractors and temporary workers across its entire supply chain. The company has successfully leveraged data from over 50 countries, seeing a 26% increase in unitary cost savings with a 50% increase in productivity from the internal procurement services team.

“The increased visibility into all external workforce-related outcome and process steps has enabled sharpened insights, along with smaller fulfillment time frames, higher fill rates, and improved compliance,” says Andreas Hettwer, group procurement category director at Capgemini. “We have truly optimized functions around the external workforce.”

Smart and efficient talent acquisition

In today’s dynamic business environment, the external workforce—comprising freelancers, contractors, consultants, and gig workers—has become a critical component of many organizations. However, efficiently hiring and managing this diverse talent pool while staying adaptable to future workforce needs can be daunting.

This is because talent acquisition for an external workforce requires finding the right people at the right time, often under tight deadlines. The Economist Impact report also shared that internal skills and talent gaps have increased the demand for proper recruitment of the external workforce.

Capgemini serves as a prime example of how this approach works in practice. When it experiences a surge in demand, its preferred suppliers are notified and SAP Fieldglass solutions pull recommendations from distribution lists of candidates who have the necessary skill sets. This helps accelerate the hiring process and can ensure Capgemini is choosing from the best possible pool of potential candidates. The data is developed in SAP Fieldglass solutions and extracted into Capgemini’s various dashboards, instantly providing a comprehensive snapshot of each supplier’s performance.

Robust data maximizes ROI

Managing an external workforce is a delicate balancing act that involves countless variables. Beyond sourcing talent, it requires tracking budgets, ensuring compliance, and measuring performance. AI-powered automation can help streamline these processes, making it easy to capture, compare, and collaborate on critical information about non-payroll labor. This empowers companies to make informed decisions that maximize their return on investment (ROI).

When inflation surged in 2023, Capgemini fielded a large volume of rate increase requests. Through constructive and fact-based discussions with its supply base, the company managed a cost-rate evolution and shared inflation impact KPIs with its board. This increased executive trust in the global contingent workforce’s ability to deliver productivity. At the end of the implementation, Capgemini fulfilled 80% of its eligible contingent worker demand.

“We have full visibility,” Hettwer says. “We know the number of contractors, we know our demand per geography, per business line, and we know the cost rates we pay for certain roles, and we measure how the cost rates evolve over time.”

Capgemini is also exploring new ways to use the large amount of data coming from the global deployment of SAP Fieldglass solutions, including AI. Economist Impact data reinforces Capgemini’s perspective, as executives cited integrating traditional systems with AI and machine learning as a top priority over the next three to five years.

“AI will certainly be an important factor in our business,” Hettwer says. “We’re being patient and methodical in order to make sure that we introduce it safely and effectively.”

Driving workforce excellence through innovation and insights

Capgemini’s journey with the SAP Fieldglass portfolio demonstrates the transformative power of leveraging advanced technology to manage and optimize an external workforce. By enhancing visibility, streamlining processes, and utilizing AI-powered insights, Capgemini has achieved significant improvements in talent acquisition, supplier performance, and cost efficiency. This resulted in the firm capturing 98% of its global contingent workforce spend with a 60% quicker fulfillment time compared to the start of the program.

As the workforce landscape continues to evolve, SAP Fieldglass solutions can equip organizations with tools that enable them to manage the complete lifecycle of their external employees, from requisition and engagement to offboarding and evaluation. These capabilities are vital to remaining resilient, agile, and data-driven while transforming external labor into a versatile, value-driving resource.

Capgemini’s strategic focus on innovation and compliance sets a benchmark for businesses aiming to unlock the full potential of their contingent workforce in today’s competitive global environment.

Amber Roth is vice president of Global Presales & Strategy for SAP Fieldglass.