Data.
That’s what gives retailers a competitive advantage, shows how to improve customer experience, helps find helpful insights in business processes, cuts down costs, and does tons of other things.
Retailers have enough data, but processing them is a whole other story. But they seem to have found a way to benefit from it: cloud computing. This technology is a critical piece of the puzzle in retail business growth, and this is how it makes a difference in the industry.
The State of Cloud Computing in Retail
The increase in cloud computing adoption in retail has been a huge trend over the last decade. Let’s summarize the most important stats and predictions about the technology in the industry.
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Price of adaptability — One major North American retailer saw over 70% of substitutions in customers’ orders because it lacked inventory visibility that cloud computing systems can provide [Accenture]
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Fast cloud adoption pace — about 90% of global enterprises will adopt hybrid cloud computing systems by 2022 [McKinsey]
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Cloud use planning expands — 97% of IT managers in international companies plan to use multiple clouds to maximize effectiveness, meet regulatory requirements, and improve the reliability of business processes [McKinsey]
Benefits of Cloud for Retailers
Cloud computing technology has the potential for huge improvements for retailers. Besides obvious applications like data management, cloud is helping companies improve relationships with customers, enhance supply chains, and transform entire operations.
Let’s talk about the most useful benefits of cloud for retail businesses in more detail.
1. More Effective Price and Margin Management
Price and margin management is critical for retailers. So, they need to have appropriate data processing resources and abilities to evaluate competitors’ prices, predict repricing opportunities, analyze historical data on sales, and explain what the results mean for pricing in both offline and online stores.
Cloud computing makes price and margin management faster and more effective. Businesses can collect and process great volumes of data using the technology, which saves tons of time for data scientists and business analysts.
McKinsey offers a great explanation of how cloud helps to manage prices and margins. Accordingly, retailers can discover pricing insights using competitors’ data, enable competitive pricing analysis, make automatic updates to prices in stores, and predict repricing opportunities.
Here’s the full info.
Source: McKinsey
2. More Efficient Inventory Management
Proper inventory management is a common challenge for retailers because checking and updating stock in real time requires a lot of resources. Cloud computing is the technology that has enough resources to overcome this issue and provide real-time inventory visibility.
This is how retailers take advantage of cloud in this case: they use inventory management software (which is also often powered by AI) to manage products on warehouse shelves in real time.
This software makes this possible:
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Real-time inventory count updates with each transaction or order
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Monitor and manage product distribution in real time
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Manage all accounting information in one dashboard
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View inventory analytics and create automatic reports
McKinsey makes another great visual to summarize how cloud makes inventory management more effective and efficient. Take a look.
Source: McKinsey
Besides all these benefits, retailers don’t need extra backup capabilities to store all data safely. Most cloud-based inventory management systems automatically back up the data, so there’s no need for storage devices.
This brings us to the next benefit...
3. Improve Data Security
Cybersecurity is no joke: attempted cyberattacks on retailers keep increasing. With so much data being generated and distributed every day, many retailers simply have no resources to ensure adequate protection.
That’s where cloud providers come in. They use sophisticated data protection tools and strategies to ensure confidentiality of customer and other sensitive business data and information (business reports, customer feedback, sales figures, etc.)
These tools include multiple firewalls, event logging, data encryption, and even physical security where appropriate.
4. Deliver Product Recommendations to Customers
Recommendation engines are software that makes recommendations of products to website visitors based on their behavior. This software is critical to personalizing the experience of thousands of monthly visitors to retail websites.
This personalization effect is achieved when the right products are shown to the right customers. To do that, huge data volumes need to be processed and analyzed, which requires significant data storage and processing capabilities.
Cloud is the technology that enables the processes that make real-time product recommendation features possible. Google has gotten in the industry, too, releasing its own Google Cloud Search for Retail this year. This makes the technology more accessible to mid- and small-sized retailers.
Cloud Computing in Retail: Summary
Cloud technology is becoming an essential tool for retail businesses. The experience of retailers with the cloud so far has shown its profound role to transform internal operations, improve customers’ experience, and increase sales.
With cloud offerings becoming accessible to retailers of all sizes, more businesses will leverage this technology to transform their operations and get ahead.