For the retail industry, 2020 has been a rollercoaster – and it’s going to continue into 2021. As we come to the end of a tumultuous Golden Quarter and await the results of what should be the most profitable time of the year for retailers, it is important to understand the drastic changes the industry has seen this year and learn from them.
But what does this really mean for retailers? How do they prepare for the growing presence of omnichannel sales next year? Are online sales going to continue to rise or will we see a return to the high street?
No matter the answer to all of these questions, what’s important is to be ready to give customers what they need, when they need it. To make this possible, retailers will need to make the most of cloud technology and connectivity.
Cloud powering e-commerce
This year 52 percent of shoppers planned to stay at home for Black Friday this year, with only 12 percent expecting to shop in-store. In the UK, that number fell to zero as the infamous shopping weekend fell during lockdown restrictions. But this is just the first of many big retail milestones that could be celebrated in from of a computer screen, so retailers need to make sure that their e-Commerce sites are ready.
This will require retail CTOs and CIOs to a) plan and b) expect the unexpected.
When it comes to the planning side of things, companies will need to make sure their websites are ready, and their cloud-based tools are in place to deliver the best customer experience at all times.
This includes peak sales season, which require retailers to think on their feet and be agile enough to adapt to rapidly changing markets and ramp up and down in line with demand. It will also be important to remember that with spikes in e-commerce traffic and bandwidth changes come fluctuating costs.
The best way to manage cost during the peak shopping season is to take advantage of a hybrid cloud approach. This means creating a cloud ecosystem that is perfect for your needs, instead of putting all your eggs in one cloud basket and hoping for the best. It can involve multiple public clouds as well as private and on-premises infrastructure. It allows you to connect to a specific cloud, based on business-specific workloads and requirements at any given time.
By not locking yourself into a rigid, multi-year contract, retailers can truly reap the benefits of the elastic cloud model.
Connecting the cloud dots
The retail industry’s dependence on omnichannel sales models has exploded in 2020 and is sure to continue growing. So, while mastering the cloud was important in the past, it is going to be bread and butter technology moving forward. But this doesn’t mean just choosing a cloud provider and assuming it will all work out. This means having a cloud connectivity strategy in place as well.
There are many ways to approach cloud – hybrid, multi, private, public – but regardless of the approach, connectivity is key. All cloud models need consistently performing connectivity between environments that comprise them - ideally on-demand. This can only be achieved with a software-defined approach to networking where everything is mediated through a software layer that connects your full infrastructure.
Traditional telecoms providers make it difficult to provision capacity during peak holiday periods due to moratoriums on changes to backbone infrastructure. Additionally, retailers can’t pay-as-they-go for the capacity they need. Instead, they must commit to fixed network capacity, sometimes several quarters in advance in order to ensure they are prepared to handle increased traffic during the holiday season.
Crucially, working with a software-defined network provides the capabilities to set up, shut down and re-establish connectivity easily and rapidly. In addition, this gives retailers the tools to scale up and scale down their network and cloud infrastructure to align with the whims of shoppers.
Bringing the edge together
In today’s technology-charged retail landscape there is an ever-changing footprint of locations where employees need support and customers need service. Whether this is brick and mortar locations up and down the country – if not globally – to warehouses or independent suppliers and head offices, the technology architecture of a retailer has to span wide geographies.
During the busiest shopping season of the year, retailers need to be able to exchange data fast and securely to empower employees, keep customers happy and capitalize on revenue opportunities.
This has traditionally been a challenge for retailers as there is a cost and time associated with settling up each new location, not to mention the need for data centers and cloud access. This is where software-defined, agile networking comes into its own to transform the edge of a retailer network.
By utilizing network function virtualization in an on-demand, point-and-click manner, retailers can connect to the right cloud provider from any location in the world. It enables faster transfer of data, more securely – making sure that your store in Aberdeen or the customer service agent manning the online chat can quickly let a customer know if that top is available in their size from the store in London or the warehouse in Italy.
Not only does this help those with boots on the ground – real or virtual – it helps on the back end as well. Working with a virtual edge hub, IT teams can support retailers by deploying, managing and connecting instances in minutes. Moving to an agile network model that aligns with the flexibility the retail industry needs.
This year may have pushed more retailers in the direction of the cloud, but it was always going to happen. The key is to make it work for you. Pick the right infrastructure for your needs. Ensure your connectivity is as flexible and scalable as you need. And don’t forget about how the edge can help your team be successful.
Neil Gallagher, EVP, Megaport EMEA