The Cloud ERP System for Retail?
Introduction
"SAP? That's only for the really big players."
A sentence that many CEOs, managing directors and IT managers in SMEs have already thought or heard. But what if that were no longer true?
With the new SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business, SAP sent a clear message at NRF 2025:
Introduction
The SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business is more than just another ERP system. The tried-and-tested SAP Retail software used by large retail chains has now been made usable for the midmarket. The fully integrated platform is an ERP system that is particularly suitable for small and medium-sized enterprises (SMEs) in the retail sector - for chain stores, omnichannel commerce, fashion brands, digital D2C models and vertically organised retailers. In other words, precisely for those companies that are currently caught between growing competition, fragmented IT systems and the desire for scalable innovation.
While many retailers are still struggling with isolated solutions, the SAP Public Cloud offers a radically different perspective: a centralised ERP system that seamlessly connects all business processes - from procurement, warehouse, prices and product ranges to POS, e-commerce and reporting.
But the question remains:
This is exactly what we will be looking at in this blog - focussing on the challenges in retail, the advantages of the public cloud compared to on-premises or private cloud solutions and with clear criteria for whom a switch to the new SAP Cloud ERP system is worthwhile.
Challenges
The retail sector in the SME sector is under pressure. On the one hand, large competitors with extensive resources dominate, while on the other, customer expectations are constantly rising: real-time availability, seamless omnichannel shopping, personalised offers and shorter delivery times. At the same time, it is important to manage with lean budgets and limited IT overheads.
While larger retail groups have been able to develop their own platform solutions or consolidate their infrastructure over the years, medium-sized companies often struggle with historically grown system landscapes. Many of these consist of powerful individual systems that are rarely fully integrated. The result: data silos, duplicate maintenance, manual reconciliation - and a lack of end-to-end transparency.
Many systems today only record the daily total per store - for example: "128€ sales in shop 17". But without context, this information remains superficial. In the SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business, you can see which products were sold at which prices, in which quantities and on which channel. This transparency is essential for precise replenishment planning, assortment management and avoiding excessive stock levels.
Omnichannel has long been the new normal: bricks-and-mortar retail, online shops, marketplaces, social commerce - all channels have to talk to each other. Traditional ERP systems that are only designed for one sales channel are reaching their limits.
If business models are to grow, new countries are to be opened up or new sales channels integrated, a solution is needed that is scalable, quickly delivers added value and can be flexibly expanded - without marathon projects and major IT investments.
An ERP system for SMEs in the retail sector must therefore do more: standardise processes, merge data streams, offer real-time transparency - and at the same time be easy to implement and economical to operate. This is precisely where the SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business comes in: with a cloud solution that has been specially developed for the realities of midmarket retail, fashion and vertically organised business models.
What speaks in favour of SAP Cloud ERP
In a market where speed, flexibility and efficiency are key to success, many systems have simply become too cumbersome. Long project runtimes, expensive adjustments and rigid system operation are among the most common obstacles to digitalisation in the retail sector. SMEs in particular often lack the IT capacity to maintain complex solutions or react quickly to market changes.
The new SAP Cloud ERP system was designed precisely for this initial situation. Instead of connecting individual solutions via interfaces, it provides a fully integrated cloud platform with preconfigured retail processes ready for use, but open for expansion. The focus is not on maximum customisability, but on maximum business value with minimum effort.
By using SAP best practices, retail companies can work productively in the shortest possible time without having to sacrifice standardisation, scalability or international roll-out capability. At the same time, the SAP S/4HANA Cloud Public Edition offers full transparency of product ranges, sales, stock levels and store processes in real time and across all channels.
In combination with the SAP Business Technology Platform (BTP), you can also integrate your own applications or flexibly add customised functions - without changing the core system. The result is a solution that is simultaneously robust, scalable and adaptable - with a clearly calculable ROI.
Core Areas
The SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business not only offers a modern system architecture - it also provides a clearly defined range of functions that are tailored to the real requirements of retail. Both generic ERP processes and specific retail roles and processes are covered. At the same time, the solution is continuously developed further: with regular releases, new localisations and additional industry functions.
These processes can be used across the board, can be activated on a modular basis and can be utilised immediately - based on internationally proven best practices.
Industry-specific roles & retail processes:
In addition, numerous preconfigured role profiles are available that support typical areas of activity in the retail sector. These include
The scope of the SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business does not currently include production/manufacturing. Companies with their own production or complex production processes should therefore carefully check whether a two-tier approach (e.g. with private cloud or on-prem in the core) makes sense.
Unique selling points
The market for retail software in the cloud is diverse: industry specialists with modular solutions, industry-generic cloud ERP systems or international platform providers focussing on e-commerce. Many systems offer partial services – such as PIM, POS or order management - but rarely do they provide an integrated process view from purchasing to sales reporting.
The SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business differs in two key respects:
Firstly: end-to-end coverage of core processes.
From the central warehouse to store management and the online shop - all core processes run on one platform, based on a standardised data model. This reduces interfaces, increases data quality and enables real-time control. The result is a genuine "retail ERP system" and not just an operational solution for individual functional areas.
For end-to-end processes from warehouse to customer experience, the solution can be extended with additional SAP cloud systems:
Secondly: industry focus with simultaneous scalability.
The solution was designed specifically for retail, fashion and vertically integrated business models. This can be seen in the item structure logic, the mapping of bundles, variant management, but also in the scenarios for store logistics, pricing or promotion management. At the same time, the public cloud as a cloud ERP system for SMEs is deliberately designed in such a way that it can also be operated with limited resources without sacrificing the ability to innovate.
While many retail providers work on a highly individualised basis, SAP relies on standardisation with room for differentiation, enabling not only faster implementations but also continuous innovation through regular releases.
Public cloud benefits
Choosing the right system architecture is no longer a purely technical question, but a strategic decision. On-premises systems stand for maximum control, but are considered cumbersome to customise and expensive to operate. Private cloud models offer a middle ground or even a transitional scenario, but often cause the same maintenance costs as traditional installations - only outsourced. In dynamic markets such as retail, it is becoming increasingly apparent that these models are reaching their limits.
The SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business takes a different approach: Software-as-a-Service (SaaS) with a clearly defined standard, continuous innovation and minimal operating costs. The system does not have to be maintained, patched and manually expanded - instead, it develops automatically with quarterly releases, new functions and permanent security and compliance management.
What sounds like a restriction at first glance is often a benefit in practice: less customisation means more focus on what counts - scalable business, high process quality and rapid response to changes. While on-premises systems become a mammoth task with every release, companies in the public cloud automatically benefit from the latest functions, industry standards and regulatory requirements.
Nevertheless, there are still reservations, especially when it comes to security. Concerns about data in the cloud, cyberattacks or hosting in non-European data centres are understandable, but technologically outdated. SAP operates its public cloud exclusively in certified data centres with the highest security standards, including ISO 27001, GDPR compliance and optional data storage within the EU. Access controls, encryption on several levels and continuous security updates are standard. This usually exceeds what medium-sized companies could achieve on their own.
The economic aspect also remains decisive: public cloud models often follow the "pay-as-you-go" principle, which means predictable operating costs as a subscription instead of high one-off investments. For medium-sized retail companies with limited budgets and growing pressure to innovate in particular, this offers a clear perspective: more performance with less effort.
The decision against traditional infrastructures is therefore not a question of doing without, but a step towards agility, resilience and sustainability.
Best fit
It was developed for small and medium-sized retail companies that think big but want to scale pragmatically. The focus is on companies that are growing but do not want to rely on cumbersome, high-maintenance IT structures - but on a platform that grows with them.
Specifically, the SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business is aimed at companies with up to 500 shops and a product range of less than 50,000 items. Typically, retailers with an annual turnover of around 100 million euros or more, often in a growth phase, often with the desire to replace a heterogeneous system landscape - because the previous system has reached the end of its technological road or is no longer scalable in organisational terms.
For larger trading companies, groups with complex structures or particularly high regulatory requirements, the SAP private cloud tends to be more suitable as it offers more flexibility for individual customisations. The public cloud, on the other hand, deliberately pursues the standard-first approach - fast, lean, updatable.
The SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business is a particularly good choice when SAP ERP is being newly introduced. This is because the public cloud follows the greenfield principle - a completely new, modern ERP without any legacy issues. Migration from existing SAP ECC systems is not technically planned, which makes the solution particularly interesting for those switching from non-SAP environments or companies undergoing reorganisation.
Two-tier models are also conceivable: For example, a subsidiary of a group to which the target profile of the public cloud applies can work with SAP S/4HANA Public Cloud Retail - while the parent company uses an on-premises or private cloud landscape. Integration then takes place via harmonised interfaces - orchestrated via the SAP Business Technology Platform (BTP).
Industry functionalities are an integral component, making the solution particularly interesting for the specific requirements of food and drugstore chains, speciality and electronics retailers, DIY chains, fashion retailers and vertically positioned brand companies. Extensions for wholesalers in the fashion industry, brand manufacturers and other B2C-orientated business models will follow in the course of 2025 and beyond.
Companies that are new to B2C retail or want to systematically map omnichannel processes for the first time will also find a future-proof platform in the SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business - including POS integration, pricing engine, promotion management and assortment management across all channels.
The necessary localisation is already available for many core European markets - including Germany, France, Spain, Portugal, Norway, Poland, the Czech Republic and Slovakia. The USA and Canada are also covered. Further localisations for countries such as India, Mexico, Singapore, the UK, Belgium and the Netherlands are on the roadmap - making the solution predictably scalable for internationally operating retailers.
Not every business model fits into a template - even if the basic framework conditions are right. The number of stores, product range size, sales volume or degree of internationalisation provide important clues as to whether the SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business could be suitable. In practice, however, other, often very individual factors play a role: corporate structures, industry-specific process variants, technological dependencies or special compliance and governance requirements.
In order to reliably assess whether SAP S/4HANA Public Cloud Retail is actually the right solution - or whether an alternative such as SAP Private Cloud offers more strategic leeway - a structured evaluation process is recommended. Together with qualified partners, SAP offers the Digital Discovery Assessment (DDA) for this purpose.
The DDA is a methodically sound preparatory workshop in which the customer-specific requirements are compared with the scope items of the SAP S/4HANA Cloud Public Edition for Retail, Fashion, and Vertical Business together with an SAP partner and the target architecture is determined The focus here is not on the technology - but on the added business value that an ERP system must provide: Which business processes should be covered? Which integrations are required? How standardised are the business processes? Which local or global requirements need to be taken into account?
This provides a reliable picture and a clear recommendation as to which cloud solution is more suitable.
The introduction of a new ERP system is one of the most strategically important, but also most complex decisions a company can make. In SMEs, the term "implementation" alone often causes anxiety - the risks seem too great, the effort too unpredictable. But this is precisely where the SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business differs fundamentally from traditional ERP approaches.
SAP offers an all-in-one package for implementation: GROW with SAP, which enables a quick, structured and easily calculable start.
Experienced implementation partners such as KPS accompany the process not as pure technical service providers, but as methodically trained guides - with best practices that have proven themselves in the public cloud.
The implementation of GROW with SAP follows the SAP Activate approach: in clearly defined phases, with preconfigured content, practical templates and an iterative approach.
KPS has developed a best practice approach based on successful implementations of the SAP Public Cloud:
Conclusion
SAP is no longer just for large industrial system landscapes. The SAP S/4HANA Public Cloud for Retail, Fashion, and Vertical Business is the first solution that is explicitly aimed at small and medium-sized retail companies - especially those that have not previously used SAP or have reached the limits of growth with existing systems.
The platform covers all central areas of the retail business end-to-end - purchasing, logistics, product ranges, prices, point of sale, omnichannel - fully integrated, from a single source.
The prerequisite is a certain cloud mindset: standardisation instead of individual development, data storage in the cloud, continuous updates instead of project cycles. In return, you get a competitive price model, comprehensive industry functions and a significantly faster time-to-value than with traditional ERP approaches.
An SAP Digital Discovery Assessment (DDA) can be used to determine in a structured way whether the solution really fits - together with experienced SAP partners such as KPS, who can support and accelerate both scope and implementation with tried-and-tested best practices.
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