Over the past few years, business and IT people have come to agree that “the cloud” is often a real, viable solution for their problems. Businesses tend to look at the cloud as an enabler for rapid innovation at better predictable costs, while IT has embraced cloud solutions to streamline their operations.
As retailers continue to transform, they’re working hard to bring different channels and touchpoints together into one seamless journey. In this ‘connected consumer experience’, the store is becoming a true differentiator when it comes to things like:
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Last-mile fulfillment
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Real-life product sensations
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Returns and refunds for goods ordered online
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As a place where multiple services from various vendors are conveniently combined into one physical place.
In this transformation process, “the cloud” is one of the cornerstones for delivering well-connected consumer experiences. Shopping journeys are best orchestrated using a centralized solution running somewhere in the cloud, thereby injecting relevant shopping data right into the journey, regardless of channel, touchpoint or time.
IT + Retailers + the Cloud
Unsurprisingly, according to a
2021 Forrester report , 3 out of 4 retailers have firm plans to invest in new store technologies. These new technologies should, on one hand, streamline consumer journeys and foster store innovations, yet on the other hand they should also increase operational efficiency. This is where cloud-based infrastructure can make an impact: The combination of retail transformation and process optimization is much easier if it is orchestrated from the cloud, independent from any channel or touchpoint, and with all the data for each journey step immediately available, wherever the consumer is. And importantly, cloud solutions typically are priced on a subscription basis, so they will have a predictable OpEx and much lower initial investments (CapEx) to get started.
Is the Cloud a Magic Bullet for Retail Transformation?
As explained in this short video on Retail & Cloud, it is probably too strong to state the cloud is the magic bullet. Yet, the cloud certainly is an enabler for rapid retail innovation, better customer experiences and operational optimization! With the importance of collecting and combining data across all steps in the journey, and with consumer-facing applications needing to offer truly personalized experiences and therefore “swilling ” data like never before, the cloud may hold part of the answer. I say “part” since it’s not just the cloud alone, but the cloud in combination with open APIs and modularity.
Let’s have a closer look at these two concepts.
Modularity and Open APIs
As store innovations, new technologies and mobile applications are introduced at high speeds, they somehow need to exchange data in a reliable way. This is where APIs step in. APIs describe how software applications must communicate with each other. APIs standardize data exchange and help retailers add new IT components more predictably, in an increasingly complex retail tech landscape, so everything works together harmoniously and seamlessly. APIs caulk the cracks between applications to ensure a watertight exchange of data, both now and in the future.
APIs and modularity are closely related when it comes to digital transformation, and both foster predictability and re-use. APIs open up functionality in a standardized way, while modularity—in the sense of breaking up a big monolith into smaller functional building blocks or modules—allows retailers to innovate in a controlled pace, preventing the need to complete ‘big-bang’ renovations of their IT landscape. Modular functionality, encapsulated in so-called microservices, allows re-use of existing components that are still useful; retailers can simply add new capabilities or replace obsolete ones. (If you want to learn more about this topic,
this great video explains microservice technology based on four “I’s” in laymen’s terms.)
What Might the Future Look Like?
No one knows what new technologies will be introduced to the retail landscape to better match future consumer journeys. Will consumers expect virtual reality experiences? Are they going to spend their free time shopping in the metaverse? We can only guess at this point. That’s why it is important to be ready to welcome emerging and future technologies to your IT landscape. Cloud technology, modularity and APIs each contribute to being ready. APIs help prolong the lifecycle of existing tech implementations, yet also offer an open door to new innovations. Looking to the future, you need to keep your APIs open (pun intended).
On top of this, using cloud technology to centralize data exchange along each step of the journey, and deliver touchpoint-independent solutions across current and future channels at lower costs, is no doubt the way forward. Combined with the right level of modularity in your tech landscape, you may be well-seated at the front row of
retail innovation!
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