How Cloud Technologies Help Retailers Stay Ahead of the Competition
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How Cloud Technologies Help Retailers Stay Ahead of the Competition

By: Ian Pattison, Head of Retail Architecture, Google Cloud UK

Ian Pattison, Head of Retail Architecture, Google Cloud UK

It is no surprise that over the last decade the retail landscape has been dramatically enhanced by technology—from the rise in mobile apps and embedding augmented reality into the shopping experience to improved customer offerings using data and insights. The way we shop is changing rapidly and with this, customer expectations are becoming more demanding. Retailers have to reimagine, adapt, and transform all parts of their business in order to stay ahead of the game.

"Cloud can help unite and analyse various datasets to help brands evaluate sourcing decisions quickly and easily, with meaningful real-time inputs"

Innovation in the space is developing at a rapid pace that in order for retailers to keep up, they have to be agile, remain customer-centric, and learn how to harness data to make strategic business decisions. Retailers need to be one-step ahead and that is why they are looking forward to cloud technologies.

It is not just about Personalisation

From my three decades of experience in the retail market, the impact that cloud technologies have in the retail sector is clear. In particular, where I have seen the most benefit comes down to better use and management of data. Cloud technologies enable retailers to eliminate data silos and take advantage of analytics to drill into their value chains. Gleaning insights that are more meaningful based on trusted data means you can predict and analyse outcomes to optimise your business and deliver a more personalised, relevant customer experience.

In recent years, the developments in artificial intelligence (AI) and machine learning (ML) have enabled retailers to make sense of customer information. At first, we saw retailers leveraging AI tools for product recommendations, but now AI is used to forecast trends, predict inventory needs to prevent stock outs, and provide hyper personalised recommendations to intelligently serve customers. Ultimately, AI and ML can help retailers grow their business and expand their digital programs so as to stay ahead of the competition.

A prominent example of this is Etsy, the online crafts marketplace. Two years ago, they turned to ML to enhance sales and provide a more personal customer experience. They are using ML algorithms to serve up relevant products that match a customer’s search terms. These search improvements have helped to add $260 million to their incremental gross merchandise sales over the past two years.

Another example is Ocado, who drove a 7 per cent increase in contact centre efficiency by using ML technology to respond to customer emails four times faster. They were also able to deliver analytics results 80 times faster, at a 33 per cent lower cost.

Faster, More Secure Shopping

Shoppers are also expecting the entire retail experience to be faster than ever. However, as we know, retailers also have highly seasonal businesses; therefore, there is a demand for reliable infrastructure that can scale instantly and effortlessly to meet surges in traffic. With the majority of retailers now having a 24/7 online presence they need to guarantee minimal-to-zero downtime for their systems, especially as part of any migration. Solid technology infrastructure is the foundation for retailers to stay ahead of demand and succeed during busy seasons like Christmas and calendar events like Valentine’s Day or Black Friday.

For instance, Lush Cosmetics turned to cloud and migrated their eCommerce platform, which includes 17 websites across the world, in just 22 days. Lush’s eCommerce platform handled its holiday shopping season with no outages whilst reducing hosting costs by about 40 per cent.

In today’s growing marketplace, security is also of paramount importance. A single breach of customer data can have profound effects on a retailer, hitting brand reputation and share price alike. Cloud technologies are secure by default, in terms of production and development and operational systems, with fine-grained controls to restrict access privilege to key people.

Cloud for Good

Cloud technologies can also help retailers make better-informed sourcing choices at earlier stages of their supply chain. Given significant supply chain fragmentation, retail brands do not always have the visibility they prefer to make more responsible sourcing decisions. While there are many organisations who address this challenge and many brands have crafted their own approaches to counter them, there are still significant gaps left. Cloud can help unite and analyse various datasets to help brands evaluate sourcing decisions quickly and easily, with meaningful real-time inputs. Luxury fashion brand, Stella McCartney, is an example of a retailer using cloud-based data processing to help increase visibility of the fashion industry's supply chains.

Cloud can help retailers address the ever-evolving demands of their customers, stay ahead of the competition, and top-of-mind with their target audience. Retail in the 2020s will be a place of churn, where incumbents will be forced to ‘innovate or die’—cloud is the perfect place to try out new technologies such as AI, ML and big data at minimal cost—failing fast so you can try different approaches.

In summary, cloud can help retailers to be more secure, more responsive to customer demand, and above all more competitive.

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