Following is Part 3 of the Retail TouchPoints series focused on Creating Winning Cloud Strategies. In this final installment, solution providers discuss current and future benefits of cloud computing.
Up to 22% of retailers use cloud services today, with another 23% planning to implement the strategy within two years, reported Sahir Anand, VP and Research Group Director at Aberdeen. One of the drivers behind this increased adoption is a tight economy, he said, and subsequent cuts in retail IT spending that make cloud computing an effective and plausible alternative. In addition to cost savings, some of the key benefits of cloud services include: flexibility, speed, ease of access, enhanced customer service and the ability to add mobile retailing to the mix.
Seasonal IT Offload
For retailers that have not adopted cloud computing as part of their everyday solution, cloud services can help reduce operational costs during the holidays and other peak cycles. “Some retailers utilize the cloud for select pieces of our software only, such as inventory control, workforce management and other functionalities undergoing temporarily excessive usage,” noted Gene Weaver, Director of Solution Strategies for RedPrairie, in an interview with Retail TouchPoints. “By doing so, rather than scale-up the capacity of in-house servers to handle peak demand, and deal with related costs and manpower, a retailer can move these applications to the cloud just during the days they experience a tremendous slam of activity.”
Similarly, implementing cloud-based payment processing, click to chat, shipping support and other customer-facing functions that peak especially during the holidays provides expanded e-Commerce integration opportunities, noted Weaver, resulting in better and faster customer service.
Cloud deployment, without a doubt, speeds response times, Weaver added: “When content is moved from a web site to a network of cloud servers, end user requests are received closer to the source, which absolutely helps with speed. End users don’t know where their inquiries are being handled or that additional computing capabilities are being leveraged ― only that responses are thorough and fast.” By eliminating geographical limitations, cloud service delivery also can penetrate potentially larger customer bases.
Consolidating Services In The Cloud
At least one provider, Adobe, has introduced a service that combines analytics, social media, advertising, targeting and web experience management applications into a single solution. It is designed to allow retail marketers and advertisers to “get from data to insights to action, faster and smarter than ever before,” according to a company news release.
This move to cloud consolidation is one of the hottest trends in cloud computing today, according to Siamak Farah, Founder and CEO of InfoStreet. While many businesses are using some form of a hybrid cloud, such as combined on-premise and cloud computing, “there is no question that most businesses will move completely to the cloud by next year,” explained Farah. “But with this transition comes the issue of using and managing multiple cloud applications provided by various vendors. Hence, we will see the consolidation of cloud apps into a single or central cloud.” Through cloud consolidation, retailers could bring all of their current cloud apps into a central location and access each one with a single username and password. This would make working in the cloud easier by eliminating the need to remember several usernames and passwords when logging into multiple sites.
The cloud also is driving the “abstraction of technology infrastructure,” reported Ofer Nimtsovich, Head of Software-as-a-Service for Retalix. “Routers, gateways, firewalls and other minute implementation details are becoming less relevant, and the physical infrastructure is being regarded as a given; what matters most now is capacity, connectivity, security and service elasticity.”
Decentralization of infrastructure and the evolution of elastic and highly scalable technologies and models “enable fast and seamless delivery of personalized retail services across a range of web and mobile platforms,” said Nimtsovich. “Retailers consequently can assure greater service availability, dramatically increased responsiveness to shopper needs and, ultimately, enhanced customer satisfaction and long-term loyalty.”
At JustEnough, several factors have influenced the significant shift this year to SaaS-based retail planning solutions. “Merchants are getting more comfortable with the security and scalability of cloud-based offerings,” observed Caroline Proctor, VP of Marketing for JustEnough. “In addition, there’s a reluctance to support additional applications internally; business users are going around IT to get impactful solutions more quickly; and, of course, when reported as an expense versus capital expenditure, the cloud offers the ability to spread costs.”
ePOS Makes Implementation A Non-Issue
Nimtsovich asserted that the cloud effectively makes retail system implementation a “non-issue.” It allows businesses to set up storefronts in record time, he said, with thin browser- or mobile device-based POS solutions that render heavy monetary investments and cumbersome physical set-up and configuration unnecessary.
Traditional POS systems require one or more servers to be stored on location, and can potentially cause huge delays during a malfunction. Cloud-based ePOS can reduce, if not eliminate, down time while allowing retailers to upload product specifications, customer history, inventory management data and other vital business information. Merchants can be in any location — on- or off-premise — and access vital business data, change promotions and make other product modifications.
In addition, “ePOS systems allow retailers to expand into new locations quickly,” said Farah. “Since all stores in the chain use the same ePOS, the need for new servers and virtual private networks is eliminated.” Farah also noted that retailers can use electronic cloud readers to scan payment cards from a mobile device. “Similar to ePOS, with cloud-based mobile card readers, retailers are freed from location-based cash drawers,” he noted, “and can use the explosive nature of pop-up stores to their advantage.”
The iPad Register
Mobile devices running cloud applications have become vital to merchant success and the customer experience, said Sandhya Rao, VP of Sales and Marketing at Shopkeep POS. “Deciding to use a cloud-based tablet POS system instead of an old fashioned cash register or Windows-based PC is becoming less of a trendy choice,” stated Rao, “and more of a necessity for retailers looking to make smarter business decisions.”
Unlike traditional store-based checkout terminals, cloud-based POS systems may be built on easy to use and reliable consumer hardware, such as the iPad. The advantages of devices such as the iPad at the point of sale include the ability to capture customers’ email addresses more easily. “Customer information is stored securely in the cloud and accessible from remote locations,” Rao said. “It may be used to further develop loyalty programs as well as to keep customers in the loop on new products and promotions.” In addition, merchants using tablet-based register are not locked into service plans or training contracts
Demolishing Entry Barriers
Nimtsovich foresees many more applications entering the cloud: While POS applications are becoming common, “we envision additional innovative touch points in the cloud, such as self-service web or mobile applications. We also believe that, as part of overall infrastructure migration, retailers will utilize the cloud for a range of inventory, ordering, purchasing and other headquarter management solutions that traditionally resided in the back-end.”
As more players deploy seemingly end-to-end solutions in the cloud ― an intensifying trend Nimtsovich calls the “democratization” of store solutions technology ― the cloud essentially is doing for retail what the iPhone did for smartphone-based communication: making everything simpler and more accessible. “Whether retailers are expanding with physical, e-Commerce or mCommerce stores,” said Nimtsovich, “cloud technology has made it much easier for merchants to launch new business offerings. Essentially the cloud has demolished retailing’s entry barriers.”
To access Parts I and II of the Cloud series, click on the following links: