With competition getting fierce, and a need to be a cut above the rest to thrive, retailers are increasing their use of personalisation as a way to win and retain customers – and turning to the cloud to execute their personalization strategies. However, retailers also struggle with certain aspects of using this technology, such as lack of a business use case, monitoring and optimizing spend, and ensuring data security, to name a few. Solving these challenges can help them see big benefits.
Cloud and personalisation
Studies have shown that 71% of consumers expect personalized interactions from companies, and 76% experience frustration when this doesn’t happen, and so personalization isn’t just a nice-to-have – it’s a vital strategy to retain customers and grow revenue. And cloud is a key tool: Infosys’s Cloud Radar – CPG and Retail Industry Report found that one of the areas retailers use cloud services the most is customer relationship management (CRM).
With its ability to store large volumes of data securely and cost-effectively, cloud is helping businesses gather and maintain customer data related to past purchases, interests, and demographics. Retailers can analyze this data to better understand their customers and make tailored recommendations via their e-commerce sites.
Among big companies using the cloud to understand their customers is UK supermarket chain Waitrose, which has has invested in cloud and AI to personalize and improve customers’ shopping experience; Puma in Germany, which is using cloud to help shoppers get better search recommendations and bespoke products, and Metro, a German wholesaler, which is leveraging cloud to enhance its operations and cater to customer demands in real time.
Cloud can also help retailers optimize store layouts based on insights gathered from how visitors behave in their shops: in France, the retail chain Monoprix is using cloud technologies to detect out-of-stock items in real time and improve on-shelf availability of items.
How online visitors use e-commerce sites also provides opportunities for hyper-personalization and creating better customer experiences thanks to cloud-native, microservices-based, API-first architecture and integrated ecosystems that help retailers customize every step of a customer’s journey across physical and digital channels. The data collected can be used to analyze customers’ preferred shopping channels, boosting the effectiveness of targeting for each user. This lets retailers invest in channels that are most effective to reach customers. Moving to the cloud also optimizes website response times and better recommendations, as French retailer Carrefour discovered when it moved from on-premises data centers to using cloud to create recommendations for customers on its e-commerce sites. This reduced operating costs and boosted revenue for Carrefour.
Struggles retailers face
Although there are clear benefits for retailers in moving to cloud, there are challenges, which range from not understanding and defining the business case to monitoring and managing costs. Infosys research found that 34% of retail respondents were not clear about the business case, while more than half retail respondents said they find it challenging to monitor their spend on cloud or predict what the costs will be.
Not having clear visibility into cloud deployments is both a cost control issue and a security risk. Also, 41% of those surveyed said they allowed any department head or IT manager to spin up a cloud instance. This poses a serious data breach risk.
Where solutions lie
Clear oversight and robust security and governance procedures, together with detailed understanding of and compliance with all relevant laws and regulations is vital for retailers that store and process customer data. Choosing the right partner is key to this, and retailers planning to deploy cloud services must work with their providers not only to manage risks, but also to integrate cloud services and applications with existing tools such as beacons and point-of-sale systems already in use.
Establishing protocols for important aspects of cloud implementation such as ownership, procurement, oversight, and data management helps ensure that the right people have access, and reduces the risk of security breach. Additionally, firms must also make sure they have robust monitoring in place to spot emerging threats and build the resilience needed if the worst does happen, as UK global fashion brand ASOS does through its use of cloud to detect and respond to potential threats.
Finally, firms must manage the costs of their cloud estate by using cost management tools to monitor use across the business, predict future costs, track and deliver goals and ensure the right return on the investment.