CLOUD COMPUTING AND THE FUTURE OF RETAIL

“Cloud computing opens the door to
new capabilities including new business
processes and new application solutions
that are retail industry specific at
a price point that is remarkably lower
than traditional solutions implemented
only one to two years ago,” Accenture
analysts concur.
Whereas the development or expansion
of services and applications
traditionally required large upfront
investments in hardware and in-house
expertise, cloud customers can purchase
only what they need and pay
only while they need it. A company can
utilize a dozen servers on Monday and
a hundred on Tuesday, for example, or
take advantage of a cloud provider’s
free or low-cost development tools.
Capabilities such as scenario modeling,
forecasting, pricing optimization
and real-time inventory management
– which tend to be “lumpy,” time-consuming
and data-intensive processes –
therefore can be done more quickly and
cost-effectively, say cloud proponents.
At the same time, software solutions
that are bought on a pay-per-use basis
can be quickly and easily integrated
into existing IP platforms.
“A wide variety of business applications,
with unified sales, support,
transaction and provisioning, can
be accessed under one secure single
login,” says Saffron. “From this Webbased
dashboard, a small business can
order product, initiate a support ticket,
collaborate with colleagues, lock down
and protect all of their computers, back
up critical data, and even manage their
customer relationships all from the
cloud. That type of tight technology
integration ultimately increases efficiency,
reduces redundancy and lowers
the cost of sales.”
“Think about the Y2K conundrum
and how much work businesses had
to do to update their systems,” says
Douglas. “If those businesses were
properly utilizing the cloud at that
time, the scope of their projects could
have been significantly reduced to
the point that it may have been just a
service migration project.”
One area where the cloud is particularly
efficient is in the handling of
data. Every retailer knows that POS
Maintenance of our Top legacy Three portfolio Technical Inhibitors to Improving IT
64%
of IT solutions prevents the company
from addressing Effectiveness new needsand Responsiveness
73%
Past under-investment in IT infrastructure
61%
prevents us from moving fast enough now
Maintenance of our legacy portfolio
64% 73%
of Our IT solutions IT development prevents methodology the companyis
rigid and takes from too addressing long. Business new needs needs
43%
73%
change by the time we get a new
Past under-investment solution in IT infrastructure
implemented
55% 61%
prevents us from moving fast enough now
The company under-invests in staff
34%
73%
Our IT development training when methodology business is or
rigid and tech takes changes too long. are Business implemented needs
36%
43%
change by the time we get a new
solution implemented
55%
A “not invented here” mentality within IT
20%
The company under-invests in staff
18% 34%
training when business or
The tech IT changes organization are implemented
is resistant to
20% 36% All Respondents
relinquishing control of development
efforts to business leaders
18%
A “not invented here” mentality within IT
20%
Revenue > 1Billion/Year
Ongoing concerns about solution
18%
vendor or service provider stability
The IT organization is and resistant longevity to 5% 20%
All Respondents
relinquishing control of development
efforts We don’t to business like sharing leaders our
16% 18%
Revenue > 1Billion/Year
Ongoing innovations concerns about with outsiders solution 9% 18%
vendor or service provider stability
and longevity 0 5% 10 20 30 40 50 60 70 80
We don’t like sharing our
16%
innovations Source: with RSR outsiders Research
9%
0 10 20 30 40 50 60 70 80
Source: RSR Research
We want to spend less How time much on “catch do up” each of the following factors influence how 52%
investments in IT, and your spend company’s more time technology portfolio will change?
differentiating with IT-enabled capabilities
48%
We want We to need spend to less shorten time on the “catch lead time up”
investments to customer in IT, and demand spend more fulfillment time
differentiating with IT-enabled capabilities
Rapid consumer adoption of new
technologies We need to such shorten as “smart the lead mobile”, time
“social media”, to customer etc. is forcing demand us to fulfillment “go faster”
We need to overcome an ingrained “not
invented Rapid here” attitude consumer and adoption take advantage of new
technologies of what’s such commercially as “smart available mobile”,
“social media”, etc. is forcing us to “go faster”
We We need need to to reduce overcome ongoing an ingrained maintenance “not
invented costs here” associated attitude with and owning take advantage solutions
of what’s commercially available
We need to reduce ongoing maintenance
costs associated with owning solutions
Source: RSR Research
Top Three Technical Inhibitors to Improving IT
Effectiveness and Responsiveness
How much do each of the following factors influence how
your company’s technology portfolio will change?
systems and loyalty programs generate
massive volumes of
Source:
customer
RSR Research
data, and
the management of that data, currently
vastly underutilized, will be increasingly
crucial to delivering personalized
that make it more timely and affordable
to capture and utilize customer
data. Many retail-specific cloud providers
also will have the ability to
track performance of products and
service. Of course, real-time The shopper and actionable
is better brands connected in comparison to consumer to previous information time
analyses of customer than store data can associates. periods, identify trends and seasonal-
require lots of time and (Percentage huge capital of responding ity components, retail employees) monitor performance
and operating expenditures, The shopper often is unaffordable
to retailers. than Completely store associates. Agree retailer, improving their Neutral ability Disagree to Complete
better and connected provide to analytical consumer results information to the
Cloud providers, (Percentage Agree
on the other of hand, responding Somewhat
forecast retail customer employees)
Somewhat
behavior. And since Disagree
possess the massive computational the data is centralized and accessible
power and statistical Completely modeling 17% tools Agree by 37.5% the ubiquitous Internet, Neutral 26.1% data Disagree can 15.3% 4.1% Completel
Agree
Somewhat
Somewhat Disagree
18 | InsideOutdoor | Spring 2011
17% 37.5% 26.1% 15.3% 4.1%
Winners
Winners
Others
Others
34%
47%
52%
48%
48%
47%
47%
48%
41%
47%
31%
34%
41%
41%
45%
31%
41%
45%