Using technology to drive operational efficiency in retail

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The relentless forces of change in the retail sector, from heightened customer expectations, to new technology changing the art of the possible, are driving retailers to consider how they can redefine and reshape customer experiences to deliver constant innovation, while at the same time driving cost savings and operational efficiency. For many, reducing the cost to serve is the paramount consideration. And it is in the physical store where the most significant savings can be made.

Reducing the cost to serve in-store however, requires new technology. Existing store technology infrastructures have grown organically over time, and as such they are inflexible and simply not able to provide the step-change needed to deliver significant savings, let alone enable the kind of customer experiences that today’s consumers are demanding.

New technology solutions to this challenge must consolidate existing in-store systems into an integrated, manageable and secure infrastructure. By enabling large-scale consolidation and reducing the physical IT footprint, retailers are able to benefit from a more efficient infrastructure that naturally drives efficiencies within the store.

This also enables centralised management and control of the IT infrastructure, combined with Intelligent Automation – an essential requirement for all modern retailers. Centralised control and management reduces the number of incidents and mitigates the expense of sending IT teams out to solve IT issues.  For retailers refurbishing or opening new stores this also enables roll out much more quickly and cost effectively. Intelligent Automation enables all systems, configuration patches, updates and upgrades of IT infrastructure across stores to be automated, ensuring a more secure and consistent system.

Taking a look at this from a higher-level perspective, the consolidation of in-store systems can also bring about a large amount of security improvements – something that has only grown in importance across all sectors in the last few years. These improvements can be attributed to the increased levels of currency and control afforded to retailers through centralised management, and the dramatic reduction in potential pathways for hackers to gain access.

All too often we hear about retailers suffering from serious data breaches, and this can also have operational knock-on effects. Taking care of a distributed retail store network, from a maintenance and security point of view, can be extremely challenging. Looking at the high number of cyber attacks and attempted attacks shines light on the ongoing battles that retail IT is facing in terms of workload, particularly when it comes to security basics like patching and performing updates. When a hacker gains access to point of sale systems through an unknown vulnerability in the IT infrastructure the damage is to customers, lost revenue and brand reputation. Once you consider the fact that retailers on average are now responding to cyber- attacks twice a week, the need to have a secure and up to date in-store infrastructure quickly becomes clear.

 

Improving POS terminal performance

At the core of effective consolidation is virtualisation – something that does not only have an impact on the back-office systems, but also in important in-store technologies, including point of sale (POS) and self-checkout terminals. This allows retailers to virtualise their existing POS applications while maintaining exactly the same appearance and functionality as before.

Of course, virtualisation is not new. It’s been around for many years, but the rate of adoption at the edge, in physical retail stores, up until now has been sluggish. This is because historically retailers have relied on traditional datacentre-based virtualisation solutions, however they are not designed with the distributed management and control required for the retail store estate, nor the virtualisation of workloads and specialist equipment used at the edge in the stores. The reality is that in order to digitise the physical store the incumbent datacentre approach does not offer the flexibility, control, and efficiency retailers now require.

But we are now at a turning point; one in which virtualisation at the edge is now possible in the retail sector, providing a virtualised store infrastructure that is much better suited to the store environment and which cracks the true challenge of management and control – a vital part of any distributed virtualisation model. 

Implementing these modern virtualisation solutions in-store can help to massively improve POS terminal performance, with less downtime, reduced hardware bills and lower maintenance costs. It also enables automated updates to individual terminals from a central point and helps to significantly extend the life of existing POS terminals.

Another emerging trend within the world of retail that can increase efficiency and drive staff productivity is the use of portable POS tablets, which can be used to take payments from anywhere within a store, thereby reducing the queues that so often form when retailers rely on having a single point of sale within their stores. These virtualised and fully functional tablets are the ideal solution for those looking to quickly introduce innovative tools into their bricks-and-mortar stores, and the operational advantages of doing so are obvious.

The potential of POS tablets transcends business needs and can also have a major impact on the in-store customer experience. If staff are empowered to be more productive and get out from behind the counter, this can often result in customers feeling more valued and satisfied with the interactions they’ve had with a sales advisor.

Finally, businesses should not underestimate the importance of ensuring any technologies they adopt to improve efficiency are compliant with the latest industry standards. With regulations like the PCI-DSS and General Data Protection Regulation (GDPR) still making headlines at the moment, all retailers must ensure they are operating within the relevant guidelines, and should not sacrifice the risk of non-compliance for other benefits.

Conclusion

Amidst all of these developments, the retail battleground has moved to the edge: within the physical store. If retailers are going to continue to effectively compete in today’s environment, they need to be considering how they can use technology to drive operational efficiency within these stores. This is the only way that the modern-day expectations of consumers will be met.

If retailers can adopt innovative technologies that are both efficient and cost-effective, while simultaneously delivering a seamless customer experience, they will be able to enjoy solid, strong success in such a challenging landscape. The journey to achieving this may not be totally straightforward, but the rewards in persevering are plentiful.

Nick East, co-founder and CEO, Zynstra
Image source: Shutterstock/Maxx-Studio