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5/24/2006
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SAP Turns Up Heat On Retail

SAP this year will add new features for perishable foods, fresh-item management, and in-store services such as bakery and deli.

SAP AG has turned up the focus on retail with plans to deliver a slew of new features and capabilities, from integration to mobile computing, within the next 12 months, a company executive said.

About 33 of the top 50 global retailers, based on revenues, run a "significant" portion of operations on SAP's platforms, said Jim McMurray, senior vice president of retail at SAP Americas Inc. "Nearly 500 customers use our core retail merchandising applications," he said. "We've closed deals with more than 20 new customers per quarter during the last six, and last year announced 14 new merchandise customers in the U.S. alone."

Expect to see SAP make investments to support the grocery industry. SAP this year will add new features for perishable foods, fresh-item management, and in-store services, such as bakery and deli, McMurray said.

SAP also plans to deliver tighter integration with mobile computing for in-store handheld devices. For example, deli departments in grocery stores would give customers an option to order sandwiches from a small computer-like device mounted on the counter. Possibly, then pay for sandwich, soda and chips at the machine with a swipe of credit card.

McMurray also will spearhead efforts to "change the game" for point-of-sale systems with tighter integration for multiple channels purchases. This will give retail stores the ability to integrate purchase and return functions from in-store POS systems and online.

For the second straight year, retail has become the fastest growing market segment for SAP, as the German software maker attempts to outpace Oracle Corp, which pushed SAP out of the way to purchase Retek Inc. in March 2005 for $11.25 per outstanding share.

More than one year later, nearly 3,500 retail customers rely on SAP for support and services. This week at Retail Systems 2006 Conference and Exposition in Chicago, jewelry store Shane Co., and apparel companies Chico's FAS Inc. and Coldwater Creek, said they have deployed SAP for Retail.

Business processes platforms (BPP) for financial services and retail could also become likely focus targets, said AMR Research Inc. analyst Bruce Richardson in a research note.

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