The cloud-connected customer – A change agent for reimagined retail

Kurt Wiener
30 May, 22

The pandemic hit… and businesses felt the shockwave. While some retail firms were cloud-first and agility-enabled, some were left faltering or failing. Kurt Wiener, Director of Business Development at SAP on Cloud operations specialist, Lemongrass, looks at the global retail sector and the accelerated innovation that reimagined our end-to-end shopping journey.

Traditional brick-and-mortar retailers were disproportionately hit by the immediacy of the market swings and supply chain disruptions that played out during the start of the pandemic.

Despite having built a decades-old trading foundation around the precept that the customer is always right, it seems some older and more established retailers forgot (or were not yet agile enough) to also remember that part of their customer base, the cloud-connected customer, always has the right to choose their purchasing channel, their favourite shopping methods and their preferred hours of operation.

Lockdown stockpile freefall

As we now reflect back on the wake of the last two years, we can see that digitally native sellers have found themselves far better equipped to meet the trading pressures experienced through the national lockdowns. The slower response of the brick-and-mortar retailers helped fuel the growth of their digitally savvy counterparts. Entrepreneurs don’t usually need a reason to attempt to innovate, but when reinvention becomes a core competency, then a new retail narrative emerges almost overnight.

In addition, in Europe and around the world, both hypermarkets and smaller stores, were left all but empty due to this increased demand and the ensuing supply chain issues. But while the root cause of the pandemic’s impact was of course an epidemiological issue, the origin of all retailers’ challenges were founded in the shape of their IT backbone.

Cloud at the core of the store

The adoption of cloud computing as an operational infrastructure, upon which a business can build its platform and agile services layer, is fundamental to retail success in the new market dynamic.

It is important to remember that cloud, at this level, is more than a data store, more than an integration layer and more than any single application or web service. Retailers can now use cloud computing as a fabric from which they can uncover powerful data analytics, predictive insights and automation advantages. With the comparatively recent modern renaissance in Artificial Intelligence (AI) and the Machine Learning (ML) that drives it, cloud computing is faster, smarter and more agile in customer acquisition and retention.

The birth of a new business model

As we now work to build customer-centric digital retail solutions powered by the cloud, retailers need to embrace technologies that will connect customer insights from front-end online channels to the back-end IT infrastructure layer (ERP, CRM, HCM systems and more) to create what will be a new business model.

As retailers bring these new business models online, they are able to connect customer insights more comprehensively, from the front-end touchpoints (social media posts, website clicks & chats, dedicated app interactions) with data from back-end systems (financial, assortment, warehouse, returns, complaints, etc.), to form a more intelligent 360-degree market view of their business. This means retailers will be able to cost-effectively analyze what will be an increasingly large pool of data that can then be used to predict customer behavior and data-driven decisions. Cloud Services Providers (CSP) will need to become well versed in providing tools that accelerate the ingestion of the data and deliver the reporting, analytics, AI and ML solutions to action that data.

Jump starting the journey to Cloud

As the traditional brick and mortar retailers work with the new generation of cloud specialists to ‘jump start’ their journey into this space, they can start to deliver increasingly more intelligent retailing including anticipating demand and increasing automated cross-selling.

Special offers, price promotions and integrated Customer Relationship Management (CRM) intelligence is all part of this, i.e., delivering these elements online with a smart search that is capable of interpreting customer requirements across desktop keyboard interactions, mobile text and also voice-based input with semantic know-how that is only possible through the breadth and scope of cloud computing in the retail space.

How to grow retail clouds

If this discussion and analysis provided anything, it is the validation of the flexibility, agility and all-around retail ability that companies in this industry can achieve if they make the move to set up shop in the cloud-first data-driven marketplace.

To get to this higher tier of agility, retailers should look for Systems Integration (SI) partners with a wealth of migration & operational experience. They should also pick a partner that knows the platform it is deploying and implementing at a granular level. Going further, the cloud retail winners of tomorrow will work with partners who show they understand the still-nascent world of automation and really appreciate how to anticipate and seamlessly deliver on their customers’ every need.

Finally, Covid-19 has been globally unbalancing, market destabilising, and of course, for so many people, life-changing.  Going forward, we need to build our new international operational foundations and fabrics in a more progressive way to ready ourselves for inherent dynamic change in the market and the cloud-connected customers that need to navigate them.

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