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Shopping in the cloud: trends in retail

Shopping in the cloud: trends in retail 

The cloud has the power to transform every aspect of retail, from the consumer’s shopping experience to the supply chain. Christian Playford, managing director, technology (retail), Accenture, shared his thoughts on what we can expect to see in this space in the coming months and years.

“While widespread cloud adoption in the retail industry is still a few years away, the scalable computing power of the cloud is making it possible for leading retailers to meet the needs of time-pressed, on-the-go and digitally connected consumers,” Playford commented. It is also going to affect other areas of retail. The Accenture analyst predicts that retailers will continue to increase their cloud adoption to support the associated technological advances in mobility and analytics – to improve business outcomes in channel operations, merchandising and marketing, supply chain management and sales, service and support.

When consumers shop, they do not think about the differences between the online, mobile or bricks-and-mortar channel. Conversely, multi-channel operations matter a great deal to retailers. The benefits of the cloud to multi-channel operations include real-time reporting on customer purchases and habits as well as far lower capital expenditures.

The cloud can also greatly improve business outcomes for merchandising and marketing efforts. As with multi-channel operations, the cloud can give marketers greater insight into customer behaviour. It also allows access to a larger number of markets with a limited investment. In addition, cloud technology gives marketers and the merchandising department the power to see what products are in stock in real-time to prevent customers becoming disappointed if something is not available.

Retail supply chains are another aspect that can benefit from the implementation of cloud technologies. The cloud lets retailers monitor their warehouses in real-time, which will mean reduced wasted store and shelf space. That, in turn, leads to lower costs. Moreover, the cloud has no geographic limits; a retailer headquartered in Toronto can track its warehouse located in China at any time of the day.

Business outcomes for the sales, service and support departments can improve as well with cloud technologies. Implementing them will lower the IT budget, and many cloud-based sales, service and support platforms easily integrate with existing IT investments. Salespeople and service and support staff can also respond faster to leads and customers through cloud platforms.

Although several of the aspects of retail affected by the cloud that Playford mentioned are not customer-facing, shoppers will notice a difference due to these technologies. “The convergence of cloud, social, analytics and mobility has changed the way consumers want to interact with their retailers, and thus disrupted the way retailers need to do their business,” he remarked. “To influence consumers purchasing decisions, today’s retailers need to build detailed consumer profiles enriched by analytics, deliver a seamless customer experience across all channels, personalize offers in real time, based on consumers’ context and eventually give customers what they value and expect.”

In order to deploy cloud technologies effectively, retailers must overcome certain barriers. Playford described the impediments to implementation: “They have an enormous amount of legacy infrastructure that needs to be supported, migrated and modernized. Integrating cloud based IT services with legacy IT is a complex but critical step to adopting cloud. It’s important not to underestimate the implementation and integration complexities. If not managed properly, these costs can creep and put significant pressure on the initial business case.”

While integration sounds like a daunting task, there are steps that can be taken that can make the process proceed smoothly. “Start by separating the hype from the reality,” Playford advised. “Cloud based solutions very seldom sit in isolation. With more retailers having now adopted cloud based solutions, we have shifted away from theory based business benefits to very practical lessons learned. Retailers have an opportunity to capitalize on this knowledge and build very pragmatic cloud roadmaps focused on handling their implementation, operational and governance realities.” He also counseled working with a partner that offers a holistic yet agnostic approach to the cloud.

Playford shared some best practices as well. “Security continues to be top of mind when considering cloud solution,” he said. “While general confidence in the security of cloud solutions is increasing, both IT and business executives need to carefully consider their cloud security strategy and think through not only privacy risks and data loss, but also intellectual property and legal and regulatory compliance considerations.”

The Accenture analyst acknowledged that cost is a significant consideration in the shift to the cloud, though it should not be the primary concern. “As retailers’ usage of cloud grows, they are on a journey toward using cloud’s unique attributes as an ever greater source of competitive advantage,” Playford noted. “Retailers should shift their focus away from pure cost reduction objectives and instead take a more strategic approach to cloud enabled business outcomes.”

Hearkening back to his earlier point about the shopping experience, Playford concluded by urging vendors to focus on satisfying consumers. “Retailers should focus their use of cloud computing on centralizing retail infrastructure and on helping provide a consistent customer experience across all of the retailer’s touchpoints – a concept we refer to as seamless retailing,” he commented. Ultimately, shoppers do not care which technology platforms a merchant deploys. All that they want is to browse for products and purchase them in the simplest and least frustrating manner possible. The cloud can enable this to keep customers coming back.

This article appears in the April-May 2014 issue of IT in Canada. To read the rest of the issue, click here

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