Level 3 Communications

Tony Savoy

Is the Future of Retail in the Cloud?

This is a guest blog from Tony Savoy, VP Offering Management, Cloud Managed Services, IBM

There seems to be no end to the string of retail companies struggling. From fashion to food, iconic designers to mall flagships, the industry continues to fight to find its footing in a dynamic marketplace changing at lightning speed.

There are multiple factors leading to the recent meltdown for retail brands, but the news is not all gloom and doom. In fact, overall retail spending continues to grow steadily, albeit slowly.

So, if the industry’s growing, how do we explain the shuttering of hundreds of locations? The reality is retail isn’t going away. But to survive and thrive, retailers must realize they can’t continue to operate as they have in the past. They must adapt to the digital landscape driven by today’s consumers – and adapt now.

Adapting means it’s no longer enough to provide an opportunity to purchase goods and services. Retailers must transform to provide a complete omnichannel experience, anticipating customer needs and enabling them to purchase when and how they want to. Not surprisingly, the latest digital technologies are foundational to the evolving retail experience. Consider just these few examples.

Mobile

Mobile within retail is pervasive. Progressive retailers are exploiting every possible application from mobile-responsive websites to mobile-accessible product reviews and on-demand discount apps. And mobile pay capabilities when in the store are quickly becoming table stakes for shoppers.

Virtual and Augmented Reality

The multitude of applications for virtual reality (VR) and augmented reality (AR) are just beginning to impact the retail realm. Smart dressing rooms and VR goggles allow customers to try on clothing or visualize their dream kitchen or living room furniture – the possibilities are endless to create a differentiated and enhanced customer experience.  However, retailers need to prepare for the massive impact of these technologies.

Big Data

Today’s customer wants a personalized experience. The way to get there? Leverage insights based on that customer’s previous and predicted behaviors. Customers expect retailers to “collect and connect” this data to drive highly relevant and tailored communications. Applying real-time, actionable data and insights will determine the retail winners and those who get left behind.

In the bigger picture, retailers can analyze massive amounts of data to identify trends, improve inventory management and improve their product road maps.

Digital transformation doesn’t stop with the customer-side of the experience. It runs through every facet of the retail enterprise, including streamlining processes, reducing costs, sourcing and pricing strategies, inventory planning and, of course, systems security.

Clearly, the digital transformation of retail is in full swing. But it’s up to today’s retailers to embrace technology solutions that deliver the differentiated experience and value customers demand. The question is, how can retailers rapidly implement necessary digital transformation technologies?

Cloud: The Key Platform to Accelerate Digital Transformation

Many retailers recognize they must develop a digital transformation strategy to stay in the game. And while there is no one-size-fits-all transformation tactic, most companies acknowledge cloud is a common factor in their digital transformation plans.

In today’s high-pressure environment that demands retailers optimize their supply chain, innovate, enhance the customer experience and improve their security posture now, companies may overlook two critical benefits cloud offers – speed coupled with almost unlimited scalability. 

Retail’s seasonal demands combined with a multitude of nascent in-store and online technologies use (and generate) massive amounts of data, making cloud’s flexible analytics, computing and storage capabilities a natural fit for a variety of workloads. Hybrid cloud models allow retailers to employ a private cloud to consolidate their data center infrastructure while using public cloud options specifically for traffic spikes, which in the retail world are triggered by everything from holiday shopping seasons to big sales events that drive web traffic up.

In addition to these seasonal, almost table stakes performance requirements, retailers are challenged to develop and maintain a seamless, cohesive experience across all channels while layering in a high level of personalization. Customers expect to be identified and recognized by the brand or retailer regardless of the channel used, whether it’s face-to-face in the store, email, social media or the web. And they expect to use different channels whenever and where ever they want, collecting information on prices, services, and support continuously during their shopping journey. Perhaps more than any other industry, retailers need to be able to quickly access and mine unstructured data, and synchronize it with existing account information to rapidly devise and deliver relevant, customized messaging and offers to their customers. Needless to say, speed and agility are essential to enable the near real-time experience customers expect.

For retailers looking to get ahead of the transformation curve while leveraging legacy systems, an enterprise class hybrid cloud environment can provide a secure infrastructure to run enterprise resource planning (ERP), customer relationship management (CRM), order management systems, high performance storage, networking, and managed services up to the application layer while handling both structured and unstructured data. These capabilities allow companies to kick start their transformation into high gear and stay competitive.

With the right cloud platform, retailers can more easily and cost-effectively experiment with burgeoning technologies like virtual assistants and VR-assisted payment. The cloud environment enables rapid development, deployment and distribution – all capabilities that are in high demand in today’s retail environment.

Teaming with a cloud platform provider known for innovation and deep, specialized technical expertise can free in-house IT teams to prioritize core business issues, and pave the way to help retailers rapidly transform their processes, IT environment, and stores to deliver the kind of fresh brand experience and new engagement capabilities today’s savvy consumers are looking for.

Learn how IBM and Level 3 can help you achieve your transformation goals here.