In today’s retail landscape, customer expectations have never been higher. Shoppers want to move effortlessly between in-store visits, mobile browsing, social commerce, and digital marketplaces, expecting every interaction to be seamless and personalized.

Behind the scenes, retailers struggle to deliver these experiences due to fragmented, outdated, and incomplete data that makes real-time decision-making nearly impossible and hampers engagement, operational efficiency, and, ultimately, profitability.

The hidden costs of disconnected data

When retailers’ data exists in silos, the problem is compounded from all angles. With sales, inventory, marketing, and customer engagement data living in separate systems, retailers lack the clear view of customer behavior and business insights they need to respond with critical actions in real time. Lack of context within the data means businesses struggle to extract meaningful insights.

Consider the impact:

• Limited inventory visibility leads to stockouts and overstocks, frustrating customers and eroding profits.
• Lack of real-time insights hinders personalized customer engagement, diminishing loyalty.
• Disconnected operations make omnichannel fulfillment—such as buy online, pick up in-store (BOPIS) or hassle-free returns—difficult to execute smoothly.

At a moment when retailers must optimize every facet of their business to remain competitive, a unified data strategy isn’t optional—it’s essential.

A data-driven future: Turning insights into action

To break these silos, retailers need a unified data foundation—one that consolidates insights across all customer touchpoints, enabling real-time intelligence and business agility. SAP Business Data Cloud (SAP BDC), as recently announced, is an integrated solution that can bring data together from all sources, owned and external, to help create a single, trusted source of truth.

With SAP Business Data Cloud, retailers can have the total picture of data from sales, inventory, marketing, loyalty, service, and near-real-time statuses of third-party logistics.

With this holistic view, retailers can:

• Enable seamless cross-channel fulfillment, such as buy online, pick up in-store or return anywhere.
• Optimize operational efficiency for everything from intelligent sourcing and promotional planning to inventory visibility and availability across sales channels.
• Personalize customer engagement by leveraging data-driven insights to boost loyalty and increase revenue.

By shifting to a data-first approach, retailers can move beyond managing transactions to driving intelligent, customer-centric experiences for long-term loyalty and growth.

Why physical stores still matter—more than ever

Despite the rise of e-commerce, more than 80% of retail interactions still take place in physical stores. Brick-and-mortar locations remain central to the retail journey, yet, as retailers’ largest cost center, they also encompass the biggest operational challenges—from inventory carrying costs to labor and store operations.

Although today’s consumers are fluid in how they shop—researching products across multiple platforms or buying online and picking up in-store, for example—they still expect accurate, real-time visibility into inventory wherever they engage. In this landscape, data is the lifeblood that allows retailers to orchestrate orders, manage workflows, and ensure that customers can trust the information they see. Yet, according to a new report released today from SAP Emarsys, 51% of U.S. brands say their organization suffers from “dark data,” which is data that is collected but not effectively used.

To remain competitive, retailers must harness real-time transactional insights to optimize store efficiency, maximize revenue, and provide seamless customer interactions.

Bringing it all together: Intelligent order management

Retailers don’t just need data—they also need actionable, real-time intelligence that helps them drive smarter decision-making. That’s why SAP is integrating advanced order management capabilities as part of our broader data-driven customer experience strategy. SAP has a long history of helping thousands of retail and B2C customers manage vast amounts of data. Today we’re tailoring this expertise, trusted by market leaders worldwide, to help meet the scale, flexibility, and time-to-value required by fast-growing organizations.

As part of the SAP Order Management Services bundle, we are launching the SAP Omnichannel Sales Transfer and Audit solution today at Shoptalk in Las Vegas, Nevada. This modular, cloud-native solution can empower retailers with real-time visibility into transactions and inventory, helping to reduce friction and improve customer satisfaction. SAP Omnichannel Sales Transfer and Audit can unify POS data from multiple systems, process high-volume transactions in real time, and help ensure inventory accuracy across all channels to improve stock availability, financial reporting, and customer engagement—without the burden of complex, custom-built integrations.

Apart from omnichannel sales and audit capabilities, the SAP Order Management Services bundle also includes additional modular, cloud-native capabilities including SAP Order Management foundation and the SAP Order Management solution for sourcing and availability. The SAP Order Management Services bundle is natively connected with SAP S/4HANA, which can enable retail and consumer products organizations and other consumer brands to unlock real-time inventory visibility, streamline fulfillment, and reduce operational costs without complex and costly custom integrations. And, integrated with SAP S/4HANA Cloud Public Edition, retail, fashion, and vertical business, announced at NRF earlier this year, the cloud-native capabilities of the SAP Order Management Services bundle can be even more scalable, secure, compliant, and affordable, enabling retailers to realize value more quickly than ever before.

Other benefits of SAP Omnichannel Sales Transfer and Audit include:

• Seamless POS integration can connect multiple POS systems with different data structures, working to eliminate silos and ensure data accuracy.
• Real-time inventory updates help keep omnichannel inventory accurate so customers can trust what they see online matches what’s available in-store.
• Smarter data processing and configurable data transfer and aggregation help update inventory, financials, and even loyalty programs effortlessly.
• Optimized sales data validation process can automate checks that are executed through configurable workflows.

By embracing a unified data strategy, retailers can eliminate complexity, reduce costs, and unlock new opportunities for growth—all while delivering the frictionless experiences today’s consumers expect.

Hornbach: The future of omnichannel retail in action

For Hornbach, one of the largest DIY stores in Germany, the idea of interconnected retail is more than just omnichannel. It needs to be able to add new channels quickly—and to maintain a seamless customer experience over all channels. Hornbach adopted SAP Order Management Services as a foundation for this vision, enabling the flexibility to address new markets quickly, connect new systems, process orders rapidly and efficiently, and adopt new innovations. With the addition of SAP Omnichannel Sales and Transfer Audit, the Hornbach team expects to get more visibility in day-to-day operations, like checking fraud detection and the completeness of transactions.

“The most exciting thing will be the combination of all these new technologies we’re seeing: artificial intelligence, event-driven architecture, as well as native cloud solutions,” said Carsten Mueller, head of Enterprise Architecture and Security, Hornbach. “The combination will give Hornbach great power in the next year.”

The future of retail is data-driven

The retail industry is evolving at an unprecedented pace, with AI redefining how businesses operate and interact with customers. According to the same SAP Emarsys report, 89% of U.S. consumer product marketers believe AI will be essential for engaging new customers. However, the effectiveness of AI hinges on the reliability and accuracy of the data it processes.

Retailers that embrace AI-powered data intelligence will lead the next era of omnichannel excellence. The future isn’t just about connecting data—it’s about activating it in real time to drive seamless customer interactions.

To stay ahead, retailers must:

• Invest in AI-driven analytics to predict demand, optimize pricing, and personalize engagement at scale.
• Implement intelligent order and transaction management to automate fulfillment, reduce friction, and improve supply chain agility.
• Leverage AI-powered customer insights to create hyper-personalized experiences that drive loyalty and lifetime value.
• Enable real-time inventory intelligence to ensure products are available where and when customers need them.

As omnichannel complexity grows, brands that fail to unify their data risk falling behind. SAP Business Data Cloud and intelligent order management solutions can provide the foundation for a future-proof transformation. As AI continues to evolve, retailers must shift from reactive decision-making to proactive, predictive commerce, where every transaction is optimized for efficiency and profitability.

The future of retail is here. Those who harness AI to unify, analyze, and act on their data will define the next generation of customer experience and retail success. I’m excited to partner with companies navigating this transformation and empower them to seize new opportunities for success.

Want to learn more? Stay tuned to see how leading retailers are leveraging SAP’s data-driven approach to optimize their operations and stay ahead of the competition and learn more about SAP’s solutions for retail.

Balaji Balasubramanian is president and chief product officer for SAP Customer Experience and Consumer Industries.

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.