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Retail Innovation and the cloud

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This trend has continued as technology developments, originating in the retail sector, have created another wave of innovation to sweep across all spheres of business. Through 2013 cloud computing was on many business leaders’ lips and the revolution it has brought to business IT has resulted in analyst firm Gartner tipping the technology as the new norm for business IT procurement for 2014 and beyond. 

What is often forgotten is that cloud computing was born from retail. Retailers have very demanding technology needs – they want speed, flexibility and highly available, robust infrastructure. By deploying technology that meets these requirements, retailers can ensure they have the wherewithal to provide high quality customer service, run cost effective end to end operations, enhance competitiveness, thereby strengthening their position within the market.

When Amazon launched Amazon Web Services (AWS) in 2006 it brought the concept of cloud computing to the fore. Based on its experience in operating massive scale technology infrastructure and datacenters, Amazon decided to provide to developers and businesses of all sizes a platform of web services they can use to build sophisticated, scalable applications. The AWS cloud has enabled well-known companies and organisations such as Airbnb, Pfizer, NASA and Vodafone to stay competitive and profitable in the changing business landscape. Today, hundreds of thousands of customers in 190 countries use AWS to reduce their IT investment, to decrease their time to market, to be more innovative and more agile.

Today the retail sector is shifting. Customer behaviour is changing. Omni-channel retailing, incorporating both online and offline avenues, is now seen as the desired retail model, incorporating mobile shopping apps, in store digital interaction and so on.2 As a result of these increased customer touch points, the rise of big data and analytics is now recognised as an integral part of delivering targeted customers service and recommendations. Retailers need to ensure that they are utilising the technologies, initially pioneered within their own sector, to stay ahead of the curve, remaining competitive and increasing profitability.

Cloud computing for the retail revolution

The development of mobile applications and mobile optimised websites used to be a long and costly process. It can take a large amount of time and resources to commission the IT infrastructure, not only to host and support, but also for the development and testing period of the implementation. Cloud computing has removed this impetus by providing the wherewithal to quickly deploy the necessary IT environment at a significantly reduced cost. Companies such as Just Eat and Hailo run their mobile apps entirely on AWS, freeing up resources that can be driven into other areas of the business. This helps to ensure that the companies are at the forefront of their industry areas.

The same goes for the hosting of high-traffic websites. Retailers are now taking advantage of this area with high-end shoe designer Kurt Geiger choosing the cloud to host its website. The adoption has meant that the company can now handle up to 400 percent more customers a day, handling twice as many transactions.

Cloud is revolutionising the capture of data and analytics as well. According to a recent survey by the Economist Intelligence Unit, data analysis is now key to retailers in understanding customer relations and how best to interact with them in order to drive sales. Effective data analysis can be difficult and costly due to the expanding mass of customer data and the unique IT skills required to manage and analyst that data. The cloud provides the platforms to handle this huge library of data and effectively, as well as the data scientists to analyse it, producing valuable insights for functions such as targeted marketing. For retailers, customer data analytics can prove especially fruitful, driving more tailored suggestions to individual consumers, thereby increasing the chance of greater revenue potential from each.

It’s not all about consumer facing functions however. Cloud has also impacted upon the business systems behind the scenes as well. Cloud based supply chain management systems are much more commonplace, injecting greater efficiency through increased visibility and flexibility, while reducing costs. Similarly cloud based ERP systems, or technologies that supplement business management are coming to the fore. For example UK retailer Nisa Retail has implemented a cloud based mobile application that allows its employees to more easily order stock directly from the store floor – a huge efficiency gain.

For retailers, as well as other companies alike, cloud computing has, and will continue to offer great opportunity to innovate for the future. The proliferation of the technology across all business areas is transforming the IT landscape irreversibly. To resume, cloud computing offers various benefits to retailers that can help them to improve their customer experience and therefore, their revenue.

Ian Massingham is Evangelist for Amazon Web Services.

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