Cloud Update: Winning Retail Strategies

Retailers say that scalability, flexibility, reduced costs, greater uptime and premium brand experiences are just some of the benefits raining down from their cloud implementations. Hanover Direct, Philz Coffee and ECCO USA are among the many merchants now leveraging the cloud to achieve winning retail strategies.

New research from IDC indicated that 73.2% of retailers expect to utilize cloud services by 2018. Those retailers anticipate usage to span public, private, in-house and outsourced solutions, and in varying degrees.

“Retailers are familiar with the idea of on-demand computing, which they’ve experienced via their e-Commerce implementations,” said Robert Parker, Group VP of Retail for IDC. “As channels converge to deliver more seamless omnichannel customer experiences, frequently e-Commerce activities move in-house, but once channel convergence matures, we expect to see the consumption of cloud technologies to manage the full omnichannel experience, including commerce, store, mobile, and call center activities.


The cloud has moved into the very fabric of today’s enterprises, KPMG noted in a recent report, titled: The Cloud Takes Shape. “There is no longer any doubt that, as a critical set of enabling technologies, cloud can significantly impact how any organization conducts its business,” the report stated. “As cloud begins to become more mainstream within the business environment, we are seeing organizations move from the ‘when and why’ of the cloud adoption process to instead focus on the ‘how.’” In addition, the report indicated that organizations expected to “gain more budget for cloud implementation and spend less time building and defending the cloud business case to their leadership.”

At Hanover Direct, parent of The Company Store, Company Kids, UnderGear and Scandia Home, the cloud is streamlining business and organizational processes. The outcome “keeps getting better every day,” said Jeffrey Rosenholtz, CIO for Hanover Direct, in an interview with Retail TouchPoints. “We’re no longer constrained by outdated hardware and software requirements, and can maximize the latest technology that cloud computing has to offer, such as mobile/tablets and telecommuting. Our future vision of ‘anytime, anywhere data access’ is now a reality in the ‘here and now.’”

The Same Sheet Of Music

Hanover Direct utilizes the NetSuite cloud platform for ERP, manufacturing, financial, inventory management, order management and CRM procedures. For any retailer, accessing data across so many business units can jeopardize information integrity. But “NetSuite ensures that all departments are using the same accurate information across all service channels,” Rosenholtz stated. “We no longer have multiple repositories of contrasting information. All departments are finally on the same page with regards to business goals and objectives because everyone is finally working off ‘the same sheet of music.’”

Philz Coffee, which operates an online store and 14 brick-and-mortar shops in Northern California, is a smaller retailer with big expectations: Before cloud became a “need,” the local merchant embraced the strategy to support potential growth. Today Philz Coffee depends on a scalable cloud platform from NetSuite for end-to-end business process efficiency. The platform helps the retailer manage accounting/finance, inventory and warehousing, order management, procurement and sales, and online commerce applications ― all from within the cloud.

“We implemented the cloud before we really needed it because we wanted a scalable and robust technology platform, and didn’t want to go through an implementation in the middle of our growth,” said Jacob Jaber, CEO Philz Coffee. NetSuite “is a very important tool that helps us work efficiently and effectively, which results in us being able to scale and grow faster.”

In preparation for this growth, Philz Coffee opted for a single, integrated cloud business management solution. The cloud architecture enables the coffee retailer to avoid high capital costs and the ongoing maintenance typical of on-premise software and servers. As the brand grows ― Philz Coffee is now served on Virgin America airlines ― the merchant won’t face a costly and disruptive upgrade down the road.

Multichannel retailers both small and large “are reaching customers through many touch points, so consistency across all is extremely important,” stated Branden Jenkins, General Manager of Retail for NetSuite. “As retailers work to get their brands out to market across various online and offline channels, connecting those touch points has become extremely challenging. To overcome these challenges, it’s important to have access to the same retail and customer data across all touch points and have the necessary protocols and services in place in order to make cohesive omnichannel selling a reality. With one centralized cloud platform, multichannel retailers can leverage a single system that feeds off a core hub of data and is continually updated with the latest software releases, regardless of touch point.”

99.9% Uptime

To better address consumers’ demands for consistent and seamless cross-channel experiences, ECCO implemented the Demandware Commerce platform, as reported by Retail TouchPoints in February 2013.

Now in place for a full year, the solution is producing measurable and impressive results, including “99.9% uptime, which has been a tremendous asset,” said Dana Schwartz, Director of Marketing and e-Commerce for ECCO USA. In addition, the platform offers “seamless releases of new features that our business can leverage almost immediately to drive sales and new consumer programs.”

The associated challenge for retailers, however, “is ensuring that your organization is ready for a robust solution that remains on top of new releases and features,” Schwartz declared. “The platform also must be ‘run’ each day to truly maximize the benefits and ROI. It’s an ongoing investment in people and talent-building to truly leverage the tools.”

The cloud-based e-Commerce platform “has effected a very positive change for our organization,” continued Schwartz. “From a consumer standpoint, the investment has helped ECCO provide a more premium brand experience in support of our brand model. A cloud-based solution best supports our current multichannel strategy through a responsive design site ― and also supports our future ambition to be an omnichannel retailer in 2014 within our owned and operated stores and our e-Commerce business.”

In today’s new retail reality, “it’s no longer acceptable to be burdened with the risk and cost of spinning up additional instances ― and their hardware, software, infrastructure, integration and licenses ― to support inevitable growth into new channels, devices and geographies,” stated Rob Garf, VP of Products and Solution Marketing for Demandware. “Not surprisingly, an increasing number of executives are migrating from rigid on-premise solutions to faster, more nimble and cost-efficient digital commerce platforms in the cloud.”

Retailers also are much more likely to create tighter safety controls for all stores “within a single, cloud-based security point than in a decentralized model,” reported Ken Morris, Principal of Boston Retail Partners. “PCI and personal identity concerns, pricing, UPC’s, CRM data, software, firmware, drivers, etc., all need to be made secure at each store location, which clearly is more efficient and cost-effective to do in the cloud. A cloud-based application portfolio that drives web, mobile and stores either on- or off-premise ― with one set of code, one set of rules, one maintenance cost and one development staff or vendor ― is a much more simplified environment. It also helps put the customer at the center of the retailer’s universe.”

A Brave New World Of Cloud-Based Retail

Real-time retail enabled by the cloud “will be the biggest industry development area over the next five to 10 years,” stated Morris, “and will change the way almost every system in retail functions: Today almost all store support functions are based on a decentralized store-and-forward batch environment. Tomorrow we will react in real time to customer preferences, inventory, staffing, loss/prevention, merchandising, logistics and more. Why cross the busy city street on yesterday’s information when you can see the future in real time via the cloud? A brave new world of cloud-based retail is possible — and inevitable.”

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