The retailers today are compelled by the modern era customer to constantly evolve to meet their ever-changing needs. There are other influencers like omni-channel experience, ability to integrate with social media or marketplaces as well as flexibility in technology stack to address ever evolving integration needs or interactive experience.
As the retail industry is getting more and more into organized sector, the small and medium sized retailers need to streamline their operations and personalization via a balance of technology adoption and operational differentiation to stay in business. Most SME retailers have an eye for domain, however when it comes to technology, these organization lack adequate resources to manage the IT infrastructure, as they have the pressure of running a tight ship while the margins are razor thin. All the above coupled with the pressure to turn a profit in a tight margin business lead them to look at Cloud Solutions which could serve as a no-nonsense pathway to technology adoption. According to Markets and Markets study, the retail cloud market is expected to grow to more than $28 billion by 2021. These numbers prove that cloud hosted infrastructure is a growing part of retail technology roadmap.
Some of the compelling and dynamic factors which lead to cloud adoption are:
Customer Experience Enhancement:Retail today has moved from 7x11 to 24x7 and omni-channel. So it is imperative for the Retailer to support anytime commerce with a seamless shopping experience. The cloud platforms available today technologically make it easier to merge the B&M with online presence. With ready to plug-in for payment gateways, marketplaces etc, the customer experience & deployment timelines are also improved.
Capital expense Vs Operation Expenses (Capex Vs Opex)
- Reduction of upfront cost and optimization of spend.
- Pay as you go reduces the operational risk while also allowing scaling up as and when needed.
- Upfront license fees can be avoided
- Opex cost incurred monthly for maintenance of in-house IT structure is higher than that of a cloud adoption.
Managing IT and addressing security concerns:Lack of skilled manpower to manage IT systems and protect critical customer data is another problem faced by the SME retailers. Also they need to meet regulatory requirements which become critical for running the business. Security breach not only leads to business loss but also financial loss in some cases. Cloud service providers serve as the extended IT team and help the retailers in managing the Solution, Infrastructure and Security. They extend 24X7 support thereby allowing the businesses to run uninterrupted. This also addresses another problem of upfront IT investments which can be avoided. The retailer is able to focus on his core business and leave IT operations to the experts.
Lower Total Cost of ownership:
- Limited hardware to procure
- Training simplified
- Reduction in maintenance cost
- Outsourced/smaller IT team to manage - focus on core business of retail.
To sum up we can say that cloud adoption would lead them to have a competitive advantage over their peers and stay in business. Also they get advantages of the dynamic changes happening in the technology world which comes along with the solution offered by the provider.
If you would like to understand more about the cloud solutions offered by us for the retail segment please get in touch with our experts and we would be happy to help. https://www.i6dx.com/get-in-touch.html
About Author :
Bama Suresh is a Pre Sales expert with more than 25+ years of experience in Techno Functional area of Transaction Banking, Retail Banking and Retail Management. She has been an ex-banker who moved to the software industry and loves to play a front end role in customer handling.