The Top Four Cases for the Cloud in the Retail Industry

Consulting firm Accenture forecasts that the retail cloud market is expected to more than triple from $4.2 billion in 2011 to $15.1 billion this year, making this industry sector one of the more enthusiastic adopters of cloud technology, especially when it comes to providing a seamless customer experience in an omni-channel universe.

Driving this rapid adoption is the clear understanding that, to quote Accenture, “the stakes for retailers are rising.” Online retailers such as Amazon have permanently altered the retail landscape with their seemingly endless variety of products at prices that reflect vast economies of scale and cloud-based efficiencies. Consumers who want to have their cake and eat it too have become proficient at visiting brick-and-mortar operations to examine the products they’re considering, and then going online to buy their chosen selection at a potentially lower price – a phenomenon that has come to be called “showrooming.” And regardless of how or from whom they buy, consumers are expecting consistent and personalised experiences across every channel in which a retailer operates.

Many large, established retailers have massive operations and extensive legacy systems, and can be hesitant to react to these new dynamics due to fear of disrupting those existing systems. But the good news is that small retailers tend to have the agility and flexibility to embrace cloud-based technologies more quickly.

Here are four ways retailers can take advantage of the cloud to be more competitive and responsive in this new environment.

1. Economies of scale, and economical scalability

For retailers, the cloud offers a promise of even greater IT efficiency than for many other sectors. Writing in Wired magazine, cloud expert Vish Ganapathy notes that “retailers use only about 10% to 15% of the computer capacity in their data centers. Some 85% is sitting idle at any time.” This is because retailers use dozens, even hundreds, of individual applications but use most of them only occasionally. “Huge economies of scale could be gained by using the same infrastructure across multiple applications in a cloud-computing architecture,” Ganapathy writes.

At the same time, retailers experience infrequent and short-lived but massive bursts of activity, especially around peak shopping periods such as Thanksgiving in the United States and Boxing Day in Canada. The cloud is the perfect solution to the challenge of rapidly scaling up operations on demand and in real time to respond to these bursts.

2. Improved customer experience

Even if you don’t yet operate in an omni-channel environment where your customers can do business with you across a variety of online and in-store channels, the cloud – and the right equipment – can vastly improve the experience you offer your customers right in your own store.

Imagine outfitting your sales staff with Internet-connected smart devices, such as tablets, that they can carry with them as they interact with customers. Full product information could be at their fingertips. Additional inventory for which there is not enough space on your shop floor can be showcased, and oversize items can be brought directly to the checkout desk. An on-the-spot lookup can be made to determine if something out of stock on the shelves is available from the stockroom, and an alert sent to immediately replenish the shelves. And your managers can drill into all the data being generated by these real-time customer interactions to seamlessly review sales information, monitor sales trends and make scheduling changes without ever leaving the sales floor.

3. Mobile point of sale

Taking the high-touch customer experience up to the next level would see salespeople complete the transaction, wirelessly and without ever stepping away from the sales floor, using mobile point of sale (POS) technology that’s either built into their tablets or running on separate, handheld devices. Cashiers could be unchained from their registers and allowed to roam free to help customers. Long checkout lines could be eliminated. And customers could get what they wanted and be on their way more quickly and conveniently.

4. Supply chain improvements

There are two key areas where cloud technology can improve your supply chain management. The first is inventory tracking. By tracking merchandise in real time, and making that information available as necessary to managers and salespeople, you can monitor inventory levels, ensure timely delivery of stock to stores, immediately determine exactly where stock is, reduce theft and loss, and improve deliveries through your online channel.

The cousin of inventory tracking is fleet management. Applying much the same asset-tracking technology to your fleet of vehicles and empowering your employees to act on the intelligence it gathers can improve delivery times and fill shelves both more quickly and more effectively — that is, with the merchandise most in demand. Managers can use the data to reduce operating expenses and monitor the performance of their drivers.

The bottom line

Your customers are demanding a seamless, high-touch experience that can be delivered only if you and your salespeople have real-time access to all the necessary information. In a retail environment, cloud computing makes such an experience possible, on top of the operational efficiencies it delivers to meet your IT requirements.

How are you leveraging the cloud to deliver a better customer experience in your retail operation? Please share your experiences in the comments section.