The pandemic has ushered in a new era of digital native and online led consumers in the retail space. This has led to a rise in the number of small and medium sized retail enterprises to adopt business models which can swiftly adjust and meet the increasing demands of the customers. This is forcing retailers to adopt digital transformation strategies which help it to scale. Cloud computing is one such solution which offers retailers the flexibility, agility, and scalability and the ability to stay ahead in the industry. Cloud solution for retail refers to the technology which enables flexibility of scaling the production process up & down, providing cost-effective operations, data reporting and faster speed to market offerings.
With an influx of rising demand for smartphones and digital communication channels, the need for compliance and collaboration, innovation and efficiency and the shift to an omni-channel experience is expected to boost retailers to adopt cloud solutions. Cloud solutions for retail when deployed lower IT costs, help gain insights and improve scalability. Retailers place a lot of importance on brand loyalty, reputation, and customer satisfaction – all which can be met and maintained with cloud solutions. Cloud solutions can be deployed across operations, merchandising and marketing, supply chain, and sales support.
The global cloud retail market is expected to reach USD 60B by 2025 from USD 16B in 2018. The market is expected to grow at a CAGR of 21% between 2018 and 2025 and is expected to grow many folds in the coming years. The rise in demand for these solutions are the result of the many benefits the solution provides to retailers. Cloud solutions also allows retailers to increase their footprints with streamlined operations and adapt quickly to the market dynamics with a holistic view of the businesses across.
Retail Challenges and Importance of Cloud
The retail landscape is threatened by various challenges of which data security and privacy, stock and inventory management, smooth processes and international expansion pose biggest roadblocks. Customer these days expect seamless shopping experiences and any delay or inefficient functioning across website, app or in-store can lead them to switch to alternate shopping destinations. Customers want fast and convenient shopping experiences with hassle free check out services, data privacy and data security, complete and true product description and offers suited to their needs.
Retailers are thus focusing on strengthening their business operations, online processes, stock management view, distribution, and warehousing channels to build brand loyalty and suit to the needs of the customers. They are investing in initiatives which help offer personalized and customized shopping experiences to retain customers and keep them happy. Cloud is one such technology which helps retailers access data from one place through cloud portals and applications, enabling better enhanced customer experience. Further, cloud computing enables enhanced collaboration among teams across geographies. Employees are no longer siloed by departments and have a holistic view of the overall supply chain distribution. Cloud further enables faster and smoother check out processes, enhanced data safety and privacy and helps meet the much-needed dexterity to respond to evolving market conditions, competitive challenges, and scalability requirements.
Key Benefits of Cloud in Retail
There are various benefits which cloud offers to retailers. These include:
Simplification of internal infrastructure: Legacy data systems require costly servers to be maintained in-house with experts to continuously monitor them. Cloud, however, does not require any bulky infrastructure and is rather
hosted by a third party enabling reduced infrastructure costs and maintenance.
Agility and scalability: Cloud offers retailers the ability to scale efficiently in times of spike in demand and meet
the requirements of the customers. Retail applications in the cloud can further lead to increased inventory visibility
enabling business agility.
Improved supply chain management: Retailer’s supply chain touch points include order processing, warehousing,
fulfilment centres, distribution, final delivery, returns, etc. They use systems which enable an overall view across
its every supply chain touchpoint. Cloud is one such solution which helps retailers manage shipments, gain realtime information on inventory and status, and use digitized documents all at the same time.
Cost benefits: Cloud enables costs benefits through enhanced in-store task management, speed to market and
real time reporting. It further enables a retailer to launch new product offerings at a quicker and faster pace and
maximise sales and marketing techniques thus helping in improving costs.
Enhanced data inference: Retailers generate vast amounts of data which can be beneficial if put to right use.
Cloud along with other capabilities such as analytics and AI help retailers work on the data efficiently and decipher
customer behaviour and preferences. This enables retailers to offer personalized services, recommendations,
customized communication, and new products and services.
Trends Driving the Adoption of Cloud in Retail
Customer - centric digital transformation: Retailers in the present days are undertaking customer-centric digital
transformation initiatives. They seek to put the customers at centre and then have its operations and processes
around it. Cloud computing in such cases become unique as it enables retailers to deliver bespoke services to the
customers. It provides retailers with quick and real-time access to data related to its customers and order history.
Cloud further helps retailers differentiate among shipping destinations, send personalized recommendations,
membership offers, coupon codes, etc., to add customers to its loyalty programs.
Enhanced collaboration and communication: Retailers in present days seize to operate in silos and want better communication and collaboration among its various departments such as operations, sales, marketing, reverse order management, etc. Retailers seek to reduce mismanagement and miscommunication among teams for streamlined business management and cloud is the solution which helps them with improved business collaborations.
Secured online banking transactions: Secure payment processes are of paramount importance for a retailer
to operate efficiently. There is a steady shift being witnessed in consumers paying habits and more and more
consumers are now making payments directly from their phones. If a retailer has a secure cloud solution in place,
a consumer will find it easier and safer to transact online and improve the overall shopping experience.
Recent Initiatives by Retailers in Adopting Cloud Solutions
Walmart: Walmart is built on a hybrid cloud architecture, operating a private cloud in its data centers, partnering
with public cloud providers, and building edge compute in stores. It operates a robust private cloud and partners
with Microsoft to migrate applications in a cloud-native architecture.
The Home Depot: The Home Depot has migrated its website to the cloud and has built upon Google Cloud’s
expertise in infrastructure, AI, ML, and data analytics to enrich customer experiences in-store, online, and on
mobile devices. It has also migrated its SAP applications—including S/4HANA, customer activity repository (CAR),
general ledger, e-commerce system, enterprise data warehouse and more to Google Cloud, enabling it more
speed, scale, and flexibility to tackle enormous spikes in business.
Kroger: Kroger is developing and testing thousands of projects in the cloud, however its core computing functions,
and data centres are stored on a private cloud. Leveraging cloud technologies in partnership with Microsoft,
Kroger develops secure solutions for e-commerce and uses AI and machine learning to develop new revolutionary
Tesco: Tesco is using a range of VMware solutions for its on-premises cloud. These include VMware Cloud
Foundation for integrated cloud infrastructure (compute, storage, networking, and security) with cloud management services, as well as VMware NSX Cloud for networking and security across the hybrid cloud and VMware AppDefense to further bolster application security.
Way Forward with Xebia
Xebia provides cloud solutions for the retail industry by building resilient, scalable systems with disaster recovery capabilities. It helps retailers accelerate their digital journey with architecturally sound solution which facilitates the migration of business data across multiple cloud providers.
It operates in other digital domains such as Data and AI, Agile, Software Technology and DevOps and its services cover the entire cloud spectrum, from multi-cloud approach to cloud cost management, training, and managed services.
Xebia also provides with consultants having extensive training in cloud capabilities from Azure, AWS, Google, and Alibaba. The consultants help provide capabilities for real-time tracking of services with hybrid or on-premises data centre capabilities.