Cloud computing has caused some major changes for retailers, spanning brick-and-mortar stores to e-commerce marketplaces. And it’s no longer a matter of modernizing, because for big-box retailers to be competitive they must look to the cloud computing revolution as a way to upgrade their technology.
One of the most compelling reasons to move processing to the cloud is shifting data. While a lot of data used to be generated on-premises at offices or storefronts, significant volumes are now generated in the cloud, whether that’s digital, web, social, mobile, IoT, or SaaS applications.
The average retail chain uses about 450 such applications — far more than most other industries. Naturally, those software programs get heavy use at certain times, while they are shut down at others.
According to a study by IBM, retailers use only about 10% to 15% of the computer capacity in their data centers. Almost 85% is sitting idle at any time. With cloud technology, retailers can swap out outdated legacy systems for structures that adapt to and gain insight across multiple applications in a cloud-computing architecture.
To be on top of their game, big-box retailers need to be smart and agile to compete with the likes of Amazon. However, in-house IT systems make it near impossible to integrate with the latest technology.
Amazon was of course among the first to utilize cloud computing to enhance marketing efficiency through social networks and online advertising. But now the likes of Target have joined in and started to use the cloud to its advantage.
Thanks to its CIO Mike McNamara —Target's operations run on an application layer built around Google Cloud and Microsoft Azure cloud-computing services, as well as its own data centers. Composed of several different popular open-source projects like Kubernetes, Docker, and Spinnaker, this architecture allows the company to run eCommerce and in-store workloads on three different platforms as it needs them.
Cloud computing essentially helps big-box retailers do what they already can, but better. With a cloud retail management system, businesses can attain customer insights that can help create personalized offerings and targeted services. The cloud also provides retailers with better access to information regarding inventory management, documents from suppliers or carriers, the status of logistics providers and brokers, and more.
Cloud-based point of sale systems allow businesses to manage communication from any device, which staff can tap into to communicate with customers. And as far as security goes, cloud-based systems are generally more secure than in-house servers, as cloud technology incorporates high levels of security and backup procedures to prevent data breaches.
Big box retailers must turn to the cloud to optimize in-store experiences and harness the power of data. If they don't, they risk falling behind.