Procurement in the retail industry transcends beyond just being a transaction-based activity, to a strategic initiative that can drive significant savings. Both merchandise and non-merchandise procurement can significantly drive the top-line and bottom-line growth in a retail company. Learn how several of the top retailers are making procurement and sourcing a priority―by collaborating with their suppliers and automating their procure-to-pay process―to keep their operating costs low and improve their margins.

1. Procurement Best Practices in the Retail
Industry
Columbia Sportswear, ULTA Beauty, CVS

2. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Internal
The Panel
Panelists
Mike Peel, Sr. Manager, Indirect Procurement, Columbia Sportswear
Geoff Goetz, Sr. Director, Merchandise Operations and Supplier Collaboration,
ULTA Beauty
Jesse Shim, Sr. Manager, Strategic Procurement Applications Management, CVS
Wendy Troegor – Retail Procurement Expert
Moderator
Rob Steinberg, Managing Director, Retail Customer Organization, SAP Ariba

3. Procurement Best Practices in the Retail
Industry
Columbia Sportswear

4. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Internal
Company overview & Procurement background
Founded in 1938 in Portland, Oregon
2015 Revenue: $2.33B
6,000+ employees
586 retail stores globally (103 in North America)
Ariba On-Demand Solutions Deployed
Procure-to-Pay:
 Canada: October 2012
 US: April 2014
Contract Management:
 North America: March 2014
Global deployment upcoming

5. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 5Internal
Procurement journey – Initial Goals & Expected Outcomes
Goal: Process Efficiency
Maximize Supplier Enablement to eliminate touches.
Long term: 90% of suppliers and transactions enabled on the AN.
 Short term target of 70% enabled at go live.
 Canada effort was a learning experience
 US results reflected those learnings
Goal: Simplify Retail Supplies Ordering
Reduce number of touch points for retail supplies
Consolidate supply base
Ensure scalable process for future growth
Canada at go-live
US at go-live
65 Stores
~17 Suppliers
4 Separate websites
Highly manual process

6. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 6Internal
Procurement journey – Final Outcomes & Best Practices
Efficiency Achieved
2015 Full Year
 $172.3M total spend in Ariba
 1,800 suppliers (91% enabled)
 93% of all transactions enabled
Comparison:
Retail Supplies Streamlined
Since 2013…
Store count has grown 58%
to 103 stores today
Consolidated supply base
from 17 less than 7
Single access point for stores:
4 Suppliers > 4 Ariba Catalogs

7. Thank you
Contact information:
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Title
Address
Phone number
F name L name
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8. CONFIDENTIAL & PROPRIETARY 2015
Ulta Beauty

9. 9
About us…
SUBHEAD
Ulta Beauty (NASDAQ: ULTA) is the largest beauty retailer in the United
States and the premier beauty destination for cosmetics, fragrance, skin, hair
care products and salon services.
As of October 31, 2015 Ulta Beauty
operates 860 retail stores across 48
states and also distributes its products
through its website: www.ulta.com.
Goal: 1,200 stores by 2019

10. 10
About Ulta Beauty
We’re on a quest to bring the fun of beauty to all – constantly
delighting our guests with all things beauty all in one place while
offering rewarding careers for our passionate, beauty-loving
associates.
MISSION
VISION
To be the most loved beauty destination of our guests and the most
admired retailer by our associates, communities, partners and
investors.

11. 11
Business case
The ARIBA Network was selected to support our exciting store growth
plan and DC expansion plan.
2013-2014
3 DCs
700+
stores
IL
AZ
PA
2016
5 DCs
IL
AZ
PA
IN
TX
900+
stores
Growth Plan

12. 12
REDUCED DOCUMENT
COUNT
• Electronic 3-way match
• Paperless Invoices
FEWER MANUAL
PROCESSES
• Maintained head count
• More efficient processing
INCREASED VISIBILITY • Ability to track and report discrepancies
• Faster resolution process
Wins – Finance/Accounts Payable

13. 13
• Defined Purchase Order expectations
• Improve on-time performance
Inventory
Align expectations
Wins – Merchandising & Inventory
• Lead-Time Reduction
• UOM Optimization
Wins – Distribution & Logistics
ABILITY TO IMPROVE
PLANNING
• Future inbound consolidation
• Ability to plan labor resources
IMPROVED RECEIVING
PROCESS
• Utilization of ASN’s
• Visibility to inbound volume

14. 14
1
SUPPLIER
MEMBERSHIP
FEES
2
NON-STANDARD
EDI SPECS
3
Missing EDI
Documents
852
214
Challenges
*
Vendor PORTAL
Vendor Info Mgt
*
REPORTING
Vendor
Performance
Management
*
Non-Merch PO
to Order
Future Roadmap

16. Procurement Best Practices in the Retail
Industry - CVS
Mar 15, 2016

17. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 17Internal
First level
Second level
 Third level
CVS Health : A $150B+ pharmacy innovation company with a simple
and clear purpose: Helping people on their path to better health.

18. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 18Internal
CVS Company overview
Our Offerings:
– CVS / Pharmacy: For more than 50 years, CVS/pharmacy has offered customers the products and services
they need to stay on their path to better health. In addition to our pharmacies, our stores feature on-trend
beauty departments, photo labs and general merchandise.
– CVS / Caremark: Offers pharmacy benefit management and prescription mail order services. We employ a
combination of clinical interventions, discounted drug purchase arrangements and formulary management
strategies to help manage drug costs for members and clients.
– CVS / Minute Clinic: Offers convenient access to care, with more than 1,100 locations. Our nurse
practitioners diagnose illnesses, injuries and skin conditions, and provide a variety of wellness services,
including vaccinations, physicals, and chronic condition monitoring
– CVS / Specialty: In addition to filling specialty prescriptions, we provide the tools and services patients need
to effectively manage their medication therapy and achieve their best health.

19. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 19Internal
CVS Company overview
Some Facts and Figures:
– CVS/pharmacy has more than 9,500 retail drug stores
–More than 225,000 employees across 49 states, the District of Columbia and Puerto Rico
– 1,100+ Minute Clinic Locations
– First National Pharmacy Chain to remove cigarettes and tobacco products from store shelves
– Employ more than 24k pharmacists
– Our 27 specialty pharmacies support individuals that require complex and expensive drug therapies
– Fill 1.7B prescriptions annually
– CVS/pharmacy serves 5 million customers in our retail pharmacies across the country

20. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 20Internal
Existing Ariba Footprint
Analyze
Spend
Source Contracts Procure
Invoice &
Pay
Manage
Ariba Network
Invoicing
Contract
Management
Contract
Compliance
Requisition
Order & Receipt
Contract Authoring
& Negotiation
Supplier Collaboration & FulfillmentSupplier Registration & Onboarding
Sourcing
Execution
Spend
Visibility
On-Premise – Adopted / In Use
Supplier Information, Risk & Performance Management
On-Premise – Not Optimized
On-Demand – Adopted / In Use
Unlicensed Ariba Products
Discounting
On-Premise – Not In Use

21. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 21Internal
Indirect Spend Landscape
Concerning Spend:
• Spend not being sourced are those category events under $100k and maverick spend.
• While low, Spend under management is currently mostly comprised of catalog spend. The lack of effective
reporting tools have hampered opportunities in identifying new sourcing opportunities.
• Supporting compliance and mitigating risk has historically taken precedence over driving savings.
Total Spend $11.8B
Addressable Spend $5.1B
Spend Under Contract 80%
Sourced Spend 80%
% of Catalog DOs to total DOs 93%
Number of Invoices 6M

22. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 22Internal
What the Procurement journey has looked like
2000 2009 2009 -- 2014 Nov. 2014 2015 April. 2016
Implementation of ORMS
modules for downstream
transactional procurement
Sourcing and Contracts
On Demand Applications
implemented
Rollout for Procurement
continues to be labored
Ariba Assesment and
Internal Business Case
Procurement comes to a
cross roads / Business
Drivers dictate complete
evaluation of our path
forward
On Demand Kickoff
planned
Sept 2014
Change in Exec
Leadership
Dec 2015
Decision to go On
Demand

23. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 23Internal
Invoice/ Pay
Working
Capital
/ Discounts
Supplier
CollaborationProcurement
Supplier
Info &
Performance
Spend
Visibility Sourcing
Contract
Management
• Spend
Classification
• Enrichment
Services
• Market Intelligence
• D&B Insight
• Spend Analytics
• Supplier Discovery
• Strategic Sourcing
• Reverse Auctions
• Knowledge/
Repository
• Reporting/ Analysis
• Contracting
Workflow
• Authoring
• Repository
• Contract
Lifecycle
Notifications
• Supplier
Registration & On-
Boarding
• Diversity/
Green/ Certs
• Risk Mgmt
• Surveys
• Scorecards
• Performance
Tracking
•Requisitioning
•Catalogs
•Approval Flows
•Electronic POs &
Receipts
•PO Automation
•PO Flip
•Invoice
Automation
•Intelligent
Invoicing
•Terms Mgmt
•DPO Extension
•Early Pay Discounts
•Supply Chain
Financing
•Electronic Payment
•Spot Quote
•Spot Buy
•Rate Card
Management
•Service Entry Sheet
Processing
•SOW’s / Specs
Sharing
PayProcureSource
Already Deployed
Future Ariba Solution Scope

24. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 24Internal
Expected Benefits and Outcomes of Migrating to On-Demand
Functional Parity:
→ All existing Ariba processes can be streamlined
in On-Demand
→ Non Procurement process flows/e-forms can be
‘housed’ in a different location
Additional Functionality Benefits:
→ Consumerized catalog experience
→ Advanced functionality
→ Built-in Reporting
→ Added support for Supplier and Catalog
Enablement
→ Native solutions Integration
Innovation:
→ Quarterly innovation cycles
→ Latest functionality access
Standardization:
→ Procurement workflows designed over a
consistent procurement process
→ Simplifies to procurement best practice
Scalability:
→ Global support
→ Flexible user count support
→ Ability to add new ERPs to overall framework
Financial Benefits:
→ Lower and predictable TCO
→ Reduced Infrastructure and Maintenance cost
→ More Spend under management allows for both
increased visibility to Savings opportunities and
operational savings

25. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 25Internal
What is the Opportunity?
• Ariba has Identified $4B in Spend across 5 Target Categories: IT, Consulting, Print, Marketing, &
Logistics
• Conservatively, $30-35M in potential Savings identified over 5 years accomplished via spend
managed through Ariba P2P for the CVS Categories in Scope
• Savings Opportunities projections amassed through increased visibility to savings opportunities,
consistency of standard processes resulting in price reductions and systematic enforcement of
spend compliance
• CVS has an opportunity in first year to process half of that amount - $2B+ in Spend Through Ariba

26. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 26Internal
CVS Spend in Scope:
Up to $4B for Ariba Analysis Across 5 Spend Areas
While all of CVS’ spend can eventually flow through Ariba’s cloud tools, savings analysis
opportunities focuses on 14 categories in five spend areas which total $4.4 billion in spend:
 IT
 Consulting
 Print
 Marketing
 Logistics
1.2
13.1
28.9
98.0
105.2
120.5
135.4
135.8
153.4
$86.4
209.5
211.4
421.9
2,626.9
Photography Services
Telecom Equipment
Marketing Services
IT Software & Services
Telecomm
Print Services
3PL
IT Consulting
Technical Consulting
Management Consulting
PCs & Servers
Ad Placement
Software
Ad Agency
Categories Used for Savings Analysis, $M

27. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 27Internal
Procurement journey – Lessons learned
Interim Gains before the transition
• Do More with less….yes, one size can fit all
• With the ever increase in volume of contract related documents increasing, we constructed a Standard
Purchase Order Terms and Conditions to output on all PO efforts of $100k or less – allowing Sourcing and
Contracts related efforts to be more targeted to those of material value. These terms would apply unless
superseded by need for separate agreement in situations of high risk subject matter.
• Order of Operations is everything
• On our Non- Merchandise Vendor Profile eform – for years we had a required workflow step for VP approval
occur immediately upon initial submittal. If rejected that VP could conceivably have to approve multiple times -
approvals of formality can go last. Pay attention to the logical sequencing of your approval workflows.
• We are all in it together
• Procurement should promote the perception as a valued collaborative business partner to help business
functions manage their budgets. In using Procurement applications as a centralized mechanism for all
purchasing activities, a complete view of enterprise spend can emerge allowing for deeper analysis and action

28. Thank you
Contact information:
F name L name
Title
Address
Phone number
F name L name
Title
Address
Phone number