Adoption of Cloud Computing in Retailing Industry

Adoption of Cloud Computing in Retailing Industry

Adoption of Cloud Computing in Retailing Industry

Retailers need to become more agile, yet many are hindered by legacy in-house IT systems that are difficult to integrate with new technologies and are costiy to run.

Cloud computing offers a way for retailers to gain greater agility and compete better, particularly with pure-play eCommerce rivals who have the advantage that they are not held back by legacy systems.


Improved channel operations

Your customers expect a personalized interaction with you regardless of the channel. However, many retailers operate in a disjointed way due to outdated legacy systems that prevent them from effectively integrating operations such as inventory, shipping or POS.

Greater supply chain visibility

Thanks to cloud computing, retailers can gain much better visibility into their supply chain across the entire enterprise as every part of the business is connected to the cloud.

Easier supplier integration

With the cloud, you can colaborate more easily with suppliers and so capture real-time status of consignments, digitized documents from suppliers, carriers and logistics providers, or data from third-party loyalty programs to help you make merchandise decisions.

Personalized customer service

The cloud helps you gain real-time access to customer data so enabling store associates to instantly pull up the sales history of a particular customer or check on the status of an order, irrespective of the channel used to place the order .

Greater insights into business performance

A retail business generates a considerable amount of data but traditionally that data has been fragmented across functional silos and different IT systems, which makes it difficult to see well your retail business is performing.

Secure and reliable

Two of the biggest concerns for retailers we talk to about cloud computing are security and reliability.Retailers want to know secure is their data when it is hosted in the cloud and how reliable is the cloud computing infrastructure.

Faster innovation

The retail world is evolving rapidly so you need IT systems that can adapt to meet fast-changing business demands. The cloud has big advantages over on-premises computing in that respect as it eliminates the time you would spend on capacity planning, procurement,or obtaining budget approval for capital expenditure associated with a traditional IT project.

Greater scalability

The ability to scale your IT systems on demand is one of the big advantages of cloud computing and it is particularly relevant to retailers. Your stores experience peaks and troughs in transactions depending on promotions, the time of the year and even the weather.

Lower operational costs

With cloud computing you only pay for what you use. That can produce a big saving on operational costs because the utilization rates for in-house computer hardware are often less than 20 percent In addition, hardware and software updates are managed by cloud service providers, which again reduces your opex budget.

From capex to opex

In today’s challenging retailing industry, capital expenditure is subject to tremendous scrutiny. That makes it difficult to justify IT investment when the money could be spent on areas with more obvious benefits, such as store refits.

Adoption of Cloud Computing in Retailing Industry

IT managers in retail businesses are overwhelmingly in favor of a cloud-based platform as it enables them to implement new technologies faster. A massive 98% of IT managers think the IT function is the department within a retail organization that benefits most from adopting the cloud, according to RSR Research.

The finding contradicts the traditional idea that IT staff are reluctant to adopt cloud computing. This opposition was well entrenched at the beginning of the cloud computing era, when IT managers feared that the shift to cloud-based systems would diminish their role and undermine power in an organization, perhaps leading to IT job losses.

How can Cloud Computing benefit the Retail Industry

Cloud technology could be the driving force with the potential to change the face of the retail industry and hence possibly save it from dying. Some benefits cloud adoption brings to the table are:

Cost Effective operations: Cloud technology has been the preferred solution due to the cost at which the services are provided, as they are generally much lower when compared to in-house operations.

A business can stand to save a significant amount of money as they do not need to purchase, update or manage systems. This automatically cuts down on hiring employees who would perform these duties in an in-house environment.

Flexibility and Scalability: The cloud-based model offers cost flexibility thanks to its varied pricing options, allowing business owners to increase or decrease their computing usage as circumstances warrant. Particularly, it offers scalability at times of peak demand, so stores don’t have to purchase additional equipment – an aspect that an in-house infrastructure arrangement can’t match.

Smooth Shopping Experience: Customers can connect to stores 24/7 thanks to their online presence and smartphone applications. A store can keep updating its customers with promotions and deals, coupon codes, special membership deals, etc.

Customers can be greeted with a welcome message or deals of the day messages as soon as they walk in the store. In fact, some existing stores are already using this technology. It provides a very personalized experience for the customer.

Better communication & collaboration between departments: Stores can benefit from effective tools in order to communicate with colleagues and employees from another department or from another location. Effective collaboration results in streamlined business management and reduces the scope of mismanagement or miscommunication.

Improved POS: Point of sale (POS) systems are now steadily moving from cash and cards to smartphones and tablets. NFC technology and applications allow customers to make payments directly from their devices.

Cloud Computing in Retailing

Cloud technology ensures that a customer experiences a smooth transaction process, something which can prove to be quite complicated when operating through traditional means.

In traditional computing model, the retailers in order to expand the relationship with the customers maintain the customer’s information, reviews and their feedbacks. The retailers have to build up their own hardware infrastructure including servers and storage devices and also purchase the expensive software applications.

In addition, they have to hire people to maintain the hardware and software infrastructure. But in cloud computing, the hardware equipment and software applications are located on servers in large data centers making the retailers hassle free. In the context of retailing industry,identified cloud computing as an efficient in collection and analyses of huge volumes of sales data and in real time inventory management.

In retailing, everyday large amounts of data is generated through POS (Point of Sale) systems. Low and medium size retailers do not have enough resources to store and maintain these large amounts of data generated through POS. The retail clouds provider provide the storage service and collects the data from advanced servers connected to the supply chain to independent cash points at small stores and store it for the retailer. The retailer in turn can access the stored data from anywhere and anytime.

Adoption of Cloud Computing in Retailing Industry

The retailers collect large amount of data from consumers to connect and improve relationships with customers. The cloud then provides the retailers data analysis and easy, secure and accessible data storage. A cloud computing provider can track performance of products in comparison to previous time periods. The cloud provider can identify the trend and seasonality component of each product, brand or category and identify and monitor the performance. Then, it can provide analytical results to the retailers.

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