How Cloud Computing is Transforming Retail
Cloud computing is transforming practically every sector of the economy but it is making its presence particularly felt in the retail arena. Brands are using the cloud for monitoring customers, analysing data and implementing insights in real time. In this article we discuss how cloud computing in retail is totally transforming the way businesses operate and react.
According to research from consulting firm, McKinsey, more than a third of retail industry workloads now reside in the cloud. A substantial number of new firms are cloud-native, meaning that they have been using the technology from the start to scale their operations. Existing operators have been slower to abandon legacy systems, but they too see the value and necessity of moving to the cloud. Some are migrating one function at a time while others are primarily focusing on shifting customer-facing workloads.
The Benefits Of Cloud Computing For Retail
The benefits of the cloud for retail have been nothing short of extraordinary (and, largely, unexpected).
Improved Supply Chain Visibility
For instance, cloud services are improving supply chain visibility. Thanks to NFC tags and distributed computing technology, managers and head office can easily keep track of shipments as they make their way towards retail stores. Operatives in the supply chain simply scan tags to confirm product location and then the cloud makes the data accessible to all in real-time. In some cases, retailers are combining these systems with blockchain technology, creating transparent supply chains that don’t rely on trust.
Improved Ability To Scale
Cloud computing in retail is also making it considerably easier for brands to scale their operations. Demand in the sector tends to go through peaks and troughs. Statista reports that most retail brands experience between a 20 and 35 percent increase in sales in the last quarter of the year (from October 1 to December 31).
But with the cloud, managing these seasonal variations becomes easier. It provides companies with flexibility to scale their digital offerings in a cost-effective way, without having to make long-term investments in on-premises equipment.
Improved Customer Service
Cloud computing is also allowing retail brands to transform the way they do customer service. Modern customers expect an “omnichannel” customer experience. They want to be able to start conversations with reps and finish them on the telephone, without having to give out information twice.
Retail brands should take note. Customer retention is 90 percent higher for companies that offer omnichannel support compared to those that don’t, with the average omnichannel firm retaining 89 percent of customers.
With the cloud, reps can record information in cloud-based CRMs and then other colleagues can quickly use it to get up to speed with customer issues. This way, retailers can avoid customer frustration and process them more rapidly.
Applications Of Cloud Computing In Retail
We’ve briefly mentioned some of the applications of the cloud in the retail sector in the previous section. Here, we provide some more concrete examples.
Enhanced Data Security
Like other firms, retailers need to maintain data security. However, they are at risk of an array of cybersecurity threats, including DDoS attacks, ransomware and direct infiltration (via techniques such as phishing).
Research and experience suggests that the cloud may help improve data security. Retailers can more widely distribute sales figures, customer details and inventory reports, and they can hire security firms to monitor their network activities.
Improved Inventory Management
Keeping track of inventory is a significant challenge for large retailers with complex supply chains. Errors can occur when operatives try to manage multiple stores and depots using disjointed systems.
By contrast, the cloud is a powerful harmonization tool. It ensures that everyone in the retail network has access to the same information in real-time. Centralised systems give retailers a broader view of their stock levels and allows them to implement software-as-a-service without the need to migrate legacy systems. Predictive analytics permit local managers to deal with stock shortage issues before they arise.
Enhanced Mobile Integration
Combining mobile integration with the cloud is also helping to facilitate inventory updates. Shop floor colleagues are able to update cloud-based inventories from handheld devices instead of recording information on paper and then logging it in an on-site terminal.
Better Disaster Control
Lastly, the movement of retail to the cloud is enabling improved disaster management and control. Traditionally, firms stored and recovered information manually. However, the process was labour-intensive and required skilled technicians to maintain.
The cloud disaster recovery model offers a solution. Service providers simply automate the distribution of data assets according to retailers’ instructions. If there is a problem with the primary data repository, they simply switch to another and then rectify the original issue.
For those of you looking for advice on how you can transform your business IT systems or create them in the Cloud from starting-up, please contact our team for an initial discussion and we can take it from there.