Cloud computing adoption in the retail industry has been relatively low compared to other industries. However, this is not due to lack of opportunities. Retailers, if they chose to move to the cloud, would experience lower IT costs, greater innovation, efficiency and scalability.
Retailers place a lot of importance on reputation and customer perception – both of which can be positively maintained with the cloud. Mobile, social and e-commerce are extremely popular today, and all of them affect retail. Retailers can take advantage of these trends using cloud computing technology.
Efficiency Across the Board
When it comes to supply chain management, retailers have a lot to think about: warehouses, transportation, order fulfillment, overhead costs, global capabilities, and efficiency. Currently, retailers use systems that limit the organization and reduce its overall efficiency. Many of these organizations are run by critical retail-specific applications, yet these are some of the last apps being used in the cloud. By moving them to the cloud, businesses can better manage shipments, gain real-time information on inventory and status, and use digitized documents.
Cloud computing also leads to simplification of infrastructure, reducing the need for excessive equipment. Resources are delivered exactly when and where the retailer needs them. It also offers great scalability, better allowing for spikes in demand on occasions like Black Friday or Christmas Eve. Retail applications in the cloud can lead to inventory visibility and across-channel shipping solutions.
The Financial Advantage
There’s also a major financial advantage of cloud computing. Businesses can move capital expenses to operating expenses. All computing resources, including software, hardware and maintenance, are moved to the cloud and the provider, which certainly lightens the load for the retailer.
A great case study of the cost efficiency of moving retail to the cloud is Target. Target reduced the numbers of servers it had in each store from 7 to 2. This saved the retailer millions of dollars on hardware, electrical and maintenance costs, while allowing it to retire 8650 in-store servers.
The Retailer Benefits
Internal benefits of retail in the cloud include in-store task management, speed to market and real-time reporting.
Obviously, to stay ahead of the competition, a retailer must remain relevant and move with the trends. This often means creating new products and services, and today, a fast time to market is more important than ever. Luckily, with the cloud, retailers have access to efficiency, agility and cost benefits. Not only can new products be released quicker than ever, but it’s also easier to maximize every single sale and individualize marketing of these changes.
Cloud computing also allows retail businesses to gain valuable insight into their customers’ shopping behaviors and preferences, thanks to the amazing data generated. Retailers can personalize offers and communication, as well as gain the data necessary to create a personalized experience. Analytics can be used to provide recommendations, create customized communication and inspire new products or services.
With the cloud, it also becomes easier to geographically expand. Retailers can scale IT fast, without the burden and cost of developing traditional IT infrastructure. This allows retailers to maintain a local focus while still thinking about the bigger picture.
Seamless Shopping Experience
Consumers have embraced digital technology, and this has disrupted the retail industry. Today, customers demand a seamless shopping experience. They want to be connected at all times, they want the process to be quick and easy, and they want shopping to be enjoyable. As a retailer, you’re expected to meet these expectations.
With help from the cloud, it’s possible. A rising trend is the use of mobile devices in stores. Many businesses are implementing this, including Apple, Anthropologie and GUESS. Employees are equipped with mobile devices, like iPads, which help answer customer questions, check inventory, finalize sales, and access online resources. Some retailers even go so far as to implement them in dressing rooms to play music or display additional options or matching accessories.
Going off of this trend, Point of Sale is also changing. Cloud will help improve the mobile POS experience, allowing you to process payments immediately and turn your customers into valuable data points. Through a cloud POS system, your sales team can browse inventory, pick products and process sales by swiping a card right there on the device. This is quickly becoming standard.
Competitive pricing is also a huge part of consumer interaction, and with the savings the cloud provides, it’s possible. Consumers are now easily able to conduct research about retailers right on their mobile device. They might be in your store looking at products, but if they find that another business has the same item for less, they’ll leave. That’s called “showrooming,” and it means retailers need to create more reasons for customers to walk in the door. It’s no longer enough to have a wide range of merchandise or a few annual blowout sales. It’s all about a consistent experience, personalized interaction and competitive pricing.
It’s easier than evert to click a button and find what you want elsewhere. It’s important to understand, as said by Accenture, that “loyalty is enhanced or eroded by every interaction.” In order to ensure that interactions are positive, retailers need to make sure consumers can easily share feedback, receive personalized promotions and information, and quickly find what they want. The cloud makes this happen.
Deborah Weinswig, executive director and head of global retail and technology at Fung Business Intelligence Centre Global Retail and Technology (FBIC), said, “The marriage of retail and technology is rapidly changing the retail landscape and providing a plethora of new opportunities for brands, retailers and consumers. Consumer choices that were unimaginable ten years ago are now at our fingertips.” This is true, and technology will only continue to evolve. Retailers that take advantage of cloud computing right now will stay ahead of the game, rather than fall behind.