 OK, everybody. Well, apologies for the slightly late start. We're just giving a few people a bit of extra time to get up from downstairs. My name is Charles Nichols, and I'm an SVP of Product Strategy at SAP Hybris. And today, what I'm going to talk about is really how we can reinvent commerce. Now, I'm using commerce in the broadest sense of the phrase. You might think e-commerce, but I mean commerce because, as you'll see, e-commerce very much implies the web shop. And the way that the world is changing, the concept of the web shop needs to change as well. Unfortunately, microservices present us with a real opportunity to do that and to break that up to deal with the massive changes that we see happening in the way that consumers want to interact with us as businesses. So I'm going to start with that last part first. So how do consumers change? What do we need to do? How do we deal with devices, new compute platforms, those things? And then we'll come on to how you can use microservices really to reinvent the process of doing that. Now, has anybody here served in the military at all? Anybody? No, done in the military service? Because if you do, this will be very familiar to you. This is what we do today with it to our customers. We view sales and marketing automation to enable us to shout more loudly at our customers. Left, right, left, right, left, right! You horrible lot. And we change that in sales and marketing terms to, buy, buy, buy, buy! I don't care if you're not listening, buy, buy! I don't care if you don't want to know, buy, buy, buy! That's what we do. That's what we do to our customers. And the problem is, is they're increasingly not listening to us. If you look at what's happening with millennials, millennials are fascinating because they're the next generation. So the behavior and what they do and how they do it gives us a very good indication of what's coming in the future. So if we look at what millennials do, they're increasing 60% of millennials in the US are using ad blocking technology. Similar numbers in Germany too, right? Really big rise. And yet so much of the internet is funded on ads, right? Big, profound changes. We unsubscribe from emails. In fact, you can see that. Buy, buy, buy, buy in your email box every day. Everybody here, I guarantee, has stuff that they don't want, right? Because we're just being bombarded with irrelevant noise. So as customers choose to disengage, we need to find different ways to engage with them. And of course, if we look at what they're doing, they're giving us all these signals. They're viewing. They're socializing. They're clicking. They're not buying. They're requesting information. They're reading reviews. They're calling us. They're adding things to cart. They're buying. And of course, they're interacting on mobile devices. And one thing that we know in commerce is commerce is actually about selling stuff. And if they're increasingly on mobile, then we need to change the way that we view our customers. We need to be where our customers are. If they're on mobile, that's where we've got to be, right? If that's where their attention is, how can we turn that attention into something where we can actually get them to buy? That's the key. So if we look at what people do with smartphones, they're everywhere, right? They take them with them all the time in their daily lives. They're commuting with them. They're using them in the bathroom. 50% of people use smartphones in the bathroom. And in fact, if you break that down about 10%, we'll actually admit to having made a commerce transaction in the bathroom, right? It doesn't bear thinking about. But you kind of get the point, right? Which is commerce is an opportunity where our customers are. We need to flip it around. It's not so much about getting them always to the web shop. How can we get into their lives in a way that makes it more relevant? If we look again at millennials, what we find is that the vast majority of millennials have their phones with them all the time. And in fact, 80% of millennials, the first thing they do in the morning is not speak to their partner, good morning, darling, how are you? But actually, they check their smartphone. But maybe somebody will invent an app for that, where they'll then say good morning over their smartphone while they're talking to each other, et cetera. Anyway, food for thought. We won't take it any further, but you know where I'm going with that, right? So there's a big change there. There's another really big change too. It's not just about phones. It's about devices too. And there is this explosion in devices, right? Not just devices which are connected, but devices which are increasingly talking to each other, in which case we now begin to think about machine to machine type of commerce. So what does that mean for the way that we build commerce systems? Immediately we think about an explosion of devices and channels which we've got to kind of deal with, which we didn't have to deal with before. So we need much more flexibility in the way that we're going to build the next generation of systems. If we look at those devices, currently there are about eight billion people on the planet. There are about 16 billion or two devices for every person on the planet. In a short space of time, less than five years, that goes up to six devices for every person on the planet. Wow, the world has changed fundamentally from where we were. We're now no longer thinking about addressing an individual, but an individual with six different devices wrapped around them. And all of the opportunities that that represents for commerce, to reinvent the way that we think about commerce. So the game has changed fundamentally and therefore we need to change our technology and the way that we architect applications. In particular, commerce applications to reflect that. In order to make this work, what we really need to do is we need to be the easiest to transact with. And that means that we need to transact when the customer wants to transact with us. So whenever and wherever they choose, rather than when we choose. We're not saying bye, bye, bye. On the timing that we choose, we're going to send out that promotion, although there's still obviously a course for doing that that drives a lot of sales. It's important, but equally, the ability to then react when they choose to interact with us. And that means this whole concept of being able to embed commerce into people's daily lives at the moment where they want and they choose to interact with us. So we can do that, of course, but it's dramatically easier if we do that with a much more flexible architecture. Rather than having one big monolithic application, we can break up the application into a series of microservices which can then scale and deal with demands and also allow us to integrate with that explosion of channels which I was just talking about. So if you think about what the next generation of a micro, sorry, a commerce storefront might look like, it's going to fundamentally leverage microservices. And whilst the storefront may itself look kind of similar, how we actually get there is very different because the pieces effectively are loosely coupled. And that means that they can scale as required, up or down. It also means that it's much easier for us to take one of these away and say I want to do this one differently, right? I want to rip that one out without breaking the whole. Or I want to extend it. I want to build something new or custom or unique to my business, extend into reach into a new channel or a new compute platform that we haven't even dreamed about yet. And that allows me to do exactly that. I can plug things in much more easily. And finally, of course, it's embeddable because each of these are services in their own right. So let's talk about embedded commerce and what that might look like. So here's an example of embedded commerce into media. If we need to get into our customers' lives at the moment that they are interacting with us, then content is immediately right front and center, right? If they are reading media, our media, we can turn all of our media assets into buying opportunities. Here we show an example of how you can take a tweet which has become buyable. Note that we've now got, it's not just a buy button that links through to a web shop which they then have to take the product and add it to the cart and then go through a checkout process on their mobile which is horrible because it's a small screen and it's kind of hard to do, right? What we're talking about here is a button which has already got their shipping details, it's already got their payment details already embedded in there and of course it understands their loyalty status and of course it understands the inventory and it's got the same product details that you had one version of the truth in your commerce store. So this is the beauty of making it embeddable. Those same components which we saw here can then be used to embed into completely new channels. So wherever the customer chooses to interact on that content media, whatever the media property is, bang, we can add a relevant contextual buy now button at the moment that he or she is interested and engaging with us, okay? But we can embed it not just into media and apps but what about new compute platforms of which obviously smart TVs, very relevant, cars also very relevant. There's now the equivalent of a PC embedded into most cars. So when I'm thinking about my journey and I'm taking my wife maybe to the ballet and I'm plugging in my journey into the sat nav, the sat nav tells me where I'm gonna go, how long I'm gonna get there and the next thing I'm thinking about is parking. How am I gonna park? Okay, find a car park near to that and reserve me a place. At that point I need an embeddable buy button where I can just say yes, bang, I'll have that, reserve me the parking space and then I go there. I've made my life much easier. We've turned what is just a journey into a commerce opportunity where we've now sold them something which we wouldn't be able to sell them otherwise simply because we are there right now, okay? So inter-new compute platforms is another area we can then look at. We can also think about embedding commerce into customers' daily lives. Lots of different examples. So for example, clothing, you know? What should I have with this dress? I'm thinking about going to a party on Saturday. I'm in a very common question, what should I wear? Particularly for our fairer colleagues like my wife is constantly asking the question what should I wear, right? The ability to look at an item and then figure out what else should I wear with that is a commerce opportunity. Absolutely is an opportunity because we already have that data. We have complimentary items. We have upsells and cross-sells. We have curated commerce where we know that a scarf would go well with that particular dress or complete the look with the bag or the shoes or whatever else it is. There is an opportunity there with that daily task of what should I wear just as there's an opportunity to pick up and leverage things from fitness trackers, fitness trackers picking up data from sensors in our running shoes. Now we know that Mark is running for a training for a half marathon. We know much more about his training style. We also know when his training shoes are worn out, right? Training shoes, actually, if you don't change them regularly, manufacturer would say annually, okay? Then you begin to dammit, can potentially damage your knees. But if you train very heavily like Mark over there because he's doing a half marathon, he needs to train them more frequently. So now we're getting into utilization data coming in, picked up through the fitness tracker, again, a buying opportunity. How can we just say, well, actually, Mark, since you're now beginning to run marathons and half marathons, or that's the training pattern that we're seeing, we have this particular shoe, which would be particularly relevant for you given what we know about you. So again, we've embedded commerce into daily life. There are a whole series of replenishment type of opportunities, and you see those with Amazon Dash buttons. Are you familiar with Amazon Dash? Yes, you know what they are, right? Little button that goes by the side of your washing machine that you can press that will then reorder more washing powder to go in it. But, right, the washing machines that are increasingly connecting to the internet anyway, do we need a button? Maybe there's just a subscription there that we can sell. So instead of selling the old occasional piece of what bit of washing powder, maybe we can just subscribe to a service where the manufacturer actually sells the washing powder service, which will automatically replenish for you. Print is the same thing. The margin is not in selling the printer, but is in the cartridge. The cartridge can know when it's getting toward the end of its life, and therefore it can automatically reorder and just make it so that printing always works for you. Refrigerators, refreshing the milk. The milk used to be delivered in the UK to your doorstep. Why can't now with rapid delivery, why can't we do some of that stuff, those staples so that you never run out of milk? Now these are all opportunities to reinvent commerce in one form or another. Pets also, if you've got a big dog, you end up lugging around great big lumps of dog food. You know, why not just have that delivered as appropriate time based upon your pet's consumption or medicines or cosmetics? Alcohol, now alcohol is a fascinating one. If you look at conversion data, right? Conversion data basically says that people will convert more, they'll buy more on a big screen compared with a little screen. So you do not transact, you do not buy very much on this because it's too hard, right? And actually it's difficult to get your wallet out and get the credit card out. It's very, very difficult, right? So on a big screen, people buy more. Now there is an exception. It's a fascinating exception. It's on a tablet and it's at 10 p.m. in the evening. And I call this the Chardonnay effect, right? Because you're sat there in front of the telly and you're browsing around, you're watching the TV going on in the background and a multitasking as you are, and you go, oh, well that's rather nice. I'll have one of them bang, right? So higher conversion rate on tablets in the evening as a consequence because of that, right? Inhibitions change, we know from alcohol, right? So inhibitions change. So why don't we enable the packaging of certain key categories? And alcohol would seem to be an obvious one where as you get towards the end of that really nice bottle of Chardonnay that you were drinking, you can just automatically replenish that. Instead of trying to remember, next time you go to the supermarket, which one it was you had, why can't you just commerce that experience at the point that they're interacting? And of course, sublimely, at the point that their inhibitions are maybe a little bit lower and they're enjoying it and their enjoyment is at the highest point. Okay, travel, all of you have traveled here, I'm sure. There is a great opportunity to reinvent travel. We think about travel as being the booking process, right? During the course of booking, we do all this, bing, bing, bing, bing, bing, and then they forget about you, okay? And yet that's only the start of your journey. How can we carry the commerce experience all the way through to all the other things that you do, given when you're traveling, you need more information. You search on the web for a decent restaurant that's close by, you look for taxi and transportation. There's 101 different things and opportunities that you can then reinvent that experience. So when Mark was talking about digital transformation earlier on, this is kind of really where the rubber hits the road. Obviously what you have to do is you have to find these examples in your business and figure out how you can translate those into buying opportunities. So that, whether that's through a partner service, remember that in the case, in the examples that Mark gave earlier on, of taxis not being owned by a taxi company, of a hospitality in the form of Airbnb, not owning any real estate, et cetera. Or retailer such as Alibaba basically selling somebody else's retail. This is the opportunity to touch people in a relevant way throughout their daily lives. And in order to do that, we need to reinvent commerce because it's very hard to do that with a traditional monolithic type of application. So we can take a commerce application and build it from a series of microservice type components, giving those flexibility and extensibility and adaptability benefits that we talked about earlier on. Now, the good news, of course, is that not all of this has to be done from scratch. And in fact, you can take a series of microservices components and take them off the shelf. Some of those, like payments, are really quite knotty pieces of technology to go build. It's probably much better to buy them. And there are some components there which you can go do. So from us at SAP Hybris, we actually have a marketplace at yas.io which has many of those components which you can literally just take and start working with. They are free to use up to a certain tier. So you can go play, develop, build, extend upon and come up with some of those fascinating use cases. Now, we would love to chat with you and have conversations with you in more depth. But at this point, I'd like to open it up for any questions that anybody has in the group. Any questions from anybody? At this point, you apply the seven-second rule. Oh, brilliant. We've broken it. Do you want one of these or? I'll shout. You're going to shout? I'll repeat the question. There's just plug and play and ready to go. It's as simple as that in that it's actually built in, then wired into the cart component, which is wired into the checkout component, which is wired into the order management component. Of course, you can go and take lots of different separate pieces. But if you put it all in one place, it's just much easier. We've done a lot of the heavy lifting for you. Another question. Give me another question. Yes? Can you connect microservices to our apps? How do you connect microservices to apps? OK. For your platform. On our platform. So you should think about yas.io as basically being a marketplace. And everything is loosely coupled. So a series of pre-built components, which are built by one of the market leaders in commerce, the hybrid commerce. Very easy to then connect via an API. We then are independent from your hosting opportunity. So Cloud Foundry would be a preferred choice. But actually, wherever you want to host it, you can do that. And SAP, we also have hosting opportunities as well with the HANA Cloud platform. So we're very independent of the way that we look at it. But we view this as an opportunity to build a whole series of components. And we're starting in particular with commerce and commerce related. And then we will also then extend that with a series of partner components, of which the Stripe example is a good one. And we're early days in the partner expansion. But we'll expect to see many, many different partners, which you can then plug in. And the goal is to have those as plug and play as we can get to. Obviously, we have to see exactly how plug and play they are. But the goal is to try and take away that integration barrier, make it easier for you. Another question over there. Hans integrated with a traditional shop experience. So how was this this course built together? OK, so let me just rephrase the question, just to make sure I understand. So how will this integrate with a physical store, or how will this integrate with our existing e-commerce infrastructure? The physical store. OK. So online to offline and offline to online is, of course, a major challenge, right? But absolutely one that we have to solve. One of the key places that we can solve that is in and around identity. So as part of this, we also have an identity platform, which is called SAP Hybrid Profile. And profile is designed to understand what is relevant to an individual at any moment in time. A real-time affinity, effectively, of what should I do next for Charles, given all of the different channels and different places and where he's been shopping. Now, if we can get data from the offline world and we can, then that's incredibly valuable. The challenge, often, with the offline data is to capture identity. So very often, you get the customer coming through the store and you don't necessarily know who they are. Now, if we can capture that identity, then obviously, you can glue together those opportunities. So the fact that Charles has been shopping in the store is very relevant. We now know what he owns, and therefore, we can bring that data into the online world. How do you get identity in a store environment? Now, customers give up identity really where there is a benefit for them. It's a give-get relationship. If you look at it in the online world, customers will give you identity. They will sign in or create an account where they get something in return. And they typically are promotional offers or incentives or special or exclusive content or exclusive service. So we have to begin to think about how we can leverage those lessons in the offline world. And the way to do that, in my view, is actually to take the data that we know about them into the offline world. So the whole online to offline is quite a big thing which is happening as well. If you think about recommendations, for example, the example we had with the dress, I was envisaging that to be in a home environment. But that could easily be in a store environment. We have recommendations which we know from algorithms and from curated merchandising, which is done for the online store. Why can we not bring that into the offline environment? So when she's trying on in the store environment, then we can then say, well, what about these three complementary items which we'll go with? Complete the look. We're familiar with that in the online world, but we don't do that in the offline world. Now, if we can encourage her to sign in, then, of course, we now know, and this is kind of where you get into the realm of clientelling, we now know what she was doing online or what she was looking at in Starbucks around the corner before going into the store, then goes into the store, can go and speak to somebody maybe and say, hi, this is my name. I was just looking in a little black dress online. Do you happen to have it in stock? Typical kind of conversation. Oh, give me your email address, and I can see what you're looking at, and I'll show you. Oh, was it this one? Oh, yes, it's that one. Yes, look, we've got them in stock. Or no, we haven't got them in stock, but we've got them in our Munich branch. I can get them sent to you directly. That's how we've got to do it, right? It's got to be a clear benefit for the consumer to give us identity, and then we can begin to glue those things together. So it's one of the reasons why I don't refer to it as e-commerce, because it's not just about the e. We've got to literally merge and blend those two things together. Does that answer your question? Yeah, reasonably well. Another question, yes? Yeah? So we have this micro-service based filter e-commerce. So I was just wondering how the traditional physical shops can survive in this transition. Oh, big strategic question. Oh, wow. I'm feeding the traditional all-you-figure shops or e-commerce shops. OK, so how will retail survive? Nice big question, OK? You're quite right. So it will change, and we've seen certain categories change dramatically, bookselling, media, some of those sorts of things. Absolutely have changed fundamentally. However, there is no doubt that what I would call experiential retail is kind of the direction that we're going into, right? People still like shopping. It's a recreation on a Saturday afternoon. We go to the shops, et cetera, et cetera. As these become more destinations in their own right, then we see the reason to go into them all. We still want to try things on, right? In retail fashion, of course, you have very high return rates. In some cases, some businesses have 50% return rates. This is very difficult to make a profitable business when that is happening, OK? So you still want that ability to have people try things on to touch them and to feel them. There's a fascinating study by a chap called Mopaco Underhill called Why We Buy, right? Really, really interesting. And he observed people and you find that before somebody buys a towel in a store, six other people have touched the towel. It's actually gross when you think about it. It makes you want to wash it, right, doesn't it? But when you get it home, I'm going to wash it, right? Wash off all those germs. Because people go in and they touch it and they feel it. And shopping is fundamentally a tactile and a rewarding experience. And online cannot completely replace that. For some things, and this is why embedded commerce is so important, for some things in particular, the things which are a part of the customer journey, where the context, such as the parking example, I want to reserve a parking space, makes so much sense, right? I'm not going to go onto a website and try and do that separately. But if I can just do it as part of planning my journey in my car and press the buy button, then that's so easy, OK? So some of those, those contextual type things, make a lot of sense for online. Some of the replenishment ones, where I don't want to lug great big things of washing powder or, I was going to say toilet roll, but similar, similar. You know, those great big things that I don't need, all the dog food back from the store, those are painful and difficult. How can we make that much smoother? But things that are really close to the body, so clothing would be a great example, cosmetics would be another. If you look at cosmetics and how they're sold today, that is experiential retail. You know, my wife or my teenage daughter want to go into town, because they will sit down with whichever cosmetics advisor and they will try out different things. They'll do a bit of a makeover and have a look. That's really, I think, the future of retail. It's the fashion advice that you can get in the store to try it on, try the look. Does it make sense? That makes a ton of sense. Also look at things like, if you go into Minneapolis and some of the great Mall of America in the US, they actually build in, you know, roller coasters and fun things inside the Mall. Now they do that in part because it's so cold in Minneapolis that you want to know all year round experience, but it also drives people to the Mall where there's cinemas, there's restaurants. This is this concept of experiential retail. Okay, other questions? How long have I got? I think I actually am out of time. Nothing more? Okay, thank you very much.