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GUEST COMMENT Why all retailers should look to the cloud

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Terry Hunter is UK managing director at Astound Commerce

‘Blue sky thinking’ is a well-worn trope in business, yet the digitalisation of almost every aspect of our lives and the rapid rate of technological development now mean that organisations must deliver far more than this. In retail, the original, creative thinkers will be those brands which look beyond the sky, and to the cloud, adopting flexible solutions and strategies to keep up with consumer demand.

The modern shopper is a fickle beast, with decisions often driven by speed and ease, as much as the quality of service. Consumers expect to be able to shop wherever they are, at whatever time of day and night, and on whichever device they choose. With the ability to compare product prices, view retailer ratings and weigh up competitive delivery options, the power really is in the hands of the consumer.

Retailers old and new must continue to invest in digital, as e-commerce plays an increasingly vital component of the shopping experience. In the space of a decade, online sales as a percentage of total retail sales leapt from 2.8% to 16%. Retailers looking to launch or re-launch an online business must ensure that their systems – at both the consumer-facing front-end, and in-house back-end – are robust and agile enough to develop in line with these demands and deliver on expectations.

The retail reality

What does this mean in reality? For the consumer: the ability to browse and find relevant product information on a retailer’s website, app, social media pages and in-store, with the experience optimised for their device. This experience should be seamless, meaning consumer data, preferences and activity are shared across platforms and used to intelligently inform and personalise the end-user experience. Any glitches or stumbling points in this process – a payment portal taking too long to load, a negative review ignored by a retailer, or an inappropriate recommendation – can easily result in cart abandonment or loss of customer loyalty.

To enable this experience, a retailer must marry the operations and decision-making of its multi-faceted business. Inventory management across sales channels, integration of IT systems and personnel, and scalability are essential. Retailers with a long high street history must be ready and able to innovate, whilst new entrants must have access to the relevant technology in order to launch and grow an online business.

The digital challenge

Of course, we’re in ‘ideal scenario’ territory here; digitalisation may deliver significant benefits to the industry, but it has also brought significant challenges along with it. The traditional retailer looking to move beyond bricks-and-mortar and strengthen its e-commerce offer will be faced with the task of either completely overhauling legacy technology or attempting to integrate these systems with the latest solutions on the market.

For those businesses which have been reliant on in-store and back-end hardware, investing in software and virtualised solutions can seem a massive hurdle. Legacy systems undoubtedly present a bulwark to a retailer’s agility and the speed of business development, yet rushing to deploy new systems without due consideration could also result in stunted growth and revenues, as well slowing or damaging the consumer experience. In a recent report, 41% of retailers said that the greatest challenge they faced in providing an omnichannel shopping experience was either having too many legacy systems to change or the difficulty of integrating existing systems.

Emergent players wanting to launch an e-commerce business will likely face different, though no less challenging, stumbling blocks. Amidst the many brands clamouring for consumer attention, rapid time to market may seem a priority. However, jumping into decisions about which retail IT systems to deploy as well as making speedy yet uneducated purchases, could do more damage in the long-run. Traditional retailers may not be digital-first, but their long-standing industry presence, knowledge and expertise place many at a distinct advantage over newcomers.

Even if a retailer is launching as pure-play e-commerce, without the additional integration requirements of a physical presence, any IT solution must still be scalable, adaptable and support and monitor the multiple sales channels an online presence involves.

For all in the industry, keeping pace with change is essential. Ongoing technology upgrades are a must, meaning both the IT systems and the personnel are adaptable and agile.

Look to the cloud

These challenges can be addressed – and in many cases, surmounted – through the adoption of cloud technology. The initial investment in cloud architecture may be hefty, but savings will quickly be realised with minimal (or zero) spending on real-estate, physical upgrades, installation and integration by third parties, energy consumption, and unused capacity and power.

Cloud platforms are often updated automatically and on a continuous basis, meaning a retailer’s technology will potentially never outdated. A single, virtualised platform can be accessed by a retailer’s departments and personnel wherever they are, and enable collaboration and data sharing across multiple locations, in real- or near-real-time and at low- or no cost. The virtualised infrastructure allows for quick, straightforward trialling of new services or consumer experiences, which are crucial for newcomers testing the waters, or traditional players wanting to grow their offerings.

Whatever a retailer’s business strategy may be, customer experience should always remain the driving force behind any decision or investment. Adopting a cloud platform can help streamline the customer experience, by ensuring continuity of service even in times of high demand. During periods of peak traffic – Black Friday, pre-Christmas, seasonal sales – cloud systems can be scaled up to manage additional browsing and purchase activity. Many legacy systems on the other hand either do not have the required in-built capacity, or they have too much computing capacity which remains underutilised throughout the rest of the year.

The perfect match

Harnessing the cloud undoubtedly has benefits for retail, allowing brands to keep pace with competition and deliver on consumer expectations. However, adopting a cloud platform – or experimenting with multiple platforms before selecting the ‘correct’ one – can be an expensive, convoluted process, which taxes and stretches the knowledge of even the most tech-savvy retailer.

Employing the services or advice of a third party is highly recommended. Decisions about which firm to partner with should be made with the same due diligence and level of research as picking the perfect platform. Low-cost solutions, or organisations which promise to help realise a digital strategy within a tight deadline should be viewed with caution. Speed is not everything: understanding the underlying components and working of a cloud platform, as well as ensuring good working relations and shared aims with a potential partner, are paramount. Cloud technology can deliver greater agility, collaboration, adaptability and innovation, and a retailer should seek the same qualities in a systems integration or service provider partner.

Cloud infrastructure can fuel retail growth, allowing traditional players to enhance consumer services and newcomers to create them. But the technology is not a panacea: legacy infrastructure, investment, integration and performance must all be carefully considered when choosing both platform and partner. Get it right, take your time, and deliver the optimum consumer experience in the long run, for the long run.

Photo: vege (Fotolia)

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