IBM and SAP launch ‘hyperlocal’ data solution for retailers

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With all the ground lost to online retailers, brick and mortar stores probably need all the help they can get. 

Now IBM and SAP have got together to launch a solution for the retail and consumer packaged industries that they claim will help “increase profitability and improve the consumer experience”.

The solution combines what the companies call “hyperlocal” data and artificial intelligence, or “cognitive” computing.

By that they mean the computing system known as Watson, IBM’s AI engine which can analyse vast quantities of information and give simple answers based on the information.

According to IBM, cognitive systems can fundamentally change the way humans and systems interact by helping humans to make decisions based on data rather than what the company calls “human bias”.

In other words, computers are better than humans.

It might be true in some cases where a shopkeeper, for example, fills their store with products that never sell just because they themselves like that product.

But brick and mortar stores may have even more fundamental problems, such as consumers’ increasing unwillingness to make the effort to go to a physical store, preferring instead to stay at home, avoid the crowds and queues, and do all their shopping online.

But IBM’s and SAP’s joint solution is probably ideal for retailers for whom a brick mortar store is essential – cafés and restaurants, mainly. Or perhaps for retailers for whom online is just as important as brick and mortar.

The tech giants say their solution uses “near-real-time data” to help retailers with planning and operation. This data is sourced from IBM’s Metro Pulse, which is like a massive data-gathering system in urban areas.

IBM says Metro Pulse can help retailers monitor real-time social sentiment across store locations, act early to identify trends and have their supply chain automatically respond and avoid out of stock situations.

It all depends on “live” business intelligence – basically, how people are moving around the local area and buying and shopping and engaging in other activities.

Laurence Haziot, IBM global managing director and general manager consumer industries, says: “SAP S/4HANA, coupled with access to rich, hyperlocal data understood and reasoned by IBM’s cognitive services, can provide consumer product and retail business users across the C-suite with the specific insights to gain a competitive advantage in major markets.”

Lori Mitchell-Keller, global general manager, consumer industries at SAP, says: “Through this exciting collaboration between SAP and IBM, retailers and consumer products companies today can respond with speed, precision and confidence to locally relevant events.

“SAP S/4HANA includes capabilities to enable users to execute end-to-end business processes in ways that other systems cannot.”

The new retail solution is built on the SAP Cloud and its Model Company services platform, which the company says can be customised for specific businesses.

The companies claim that, during trials of this cognitive technology across more than 100 stores in multiple American markets, the solution improved forecasting accuracy of volatile, hard-to-forecast products by 75 percent.