Technology can prove to be a game-changer for retailers, but only when it’s applied properly.
Many retailers implement electronic commerce platforms to quickly bring products to customers. Additionally, they invest in technology, such as retail analytics, to understand how to better engage with them through a variety of channels, including physical stores, online or mobile devices.
We’ve all watched the continued growth of online sales. Just this year, online sales grew 15.1 percent in the first quarter, and accounted for 11.1 percent of retail sales when factoring out items not normally bought online.
Web-based sales totaled $86.3 billion for the period ending March 31, a 15.1 percent increase over the $75 billion total sold in the first quarter of 2015, according to non-adjusted estimates released in May by the U.S. Commerce Department.
Those numbers illustrate why e-commerce is now essential for retailers, especially those with physical store locations throughout the country. Customers increasingly expect physical stores to also offer an e-commerce platform, but retailers should also do so as a way to enhance multi-channel consumer connections. The ability to reach your customers from all channels is critical to retail success.
In my experience as a managed services solution architect for CDW, I’ve watched retailers reap more and more profits from online sales. It should come as no surprise that companies should look seriously at their underlying infrastructure to determine whether their e-commerce platforms can keep pace with business and market demands. E-commerce platforms have grown in complexity, integrating with specialized applications such as Adobe, Google and business management software such as SAP. A successful, robust multichannel strategy requires retailers to pull increasingly more data about customers, the products they buy (or look at), and other site data and analytics through an e-commerce platform, in addition to back-end legacy systems.
Retailers frequently discover that the infrastructure supporting their e-commerce platforms is growing old fast, typically running on servers that are more than five years old, and in data centers with minimal back-up and recovery capabilities. What if a system failure happens or an e-commerce site goes down?
Our team recently worked with a retailer whose e-commerce site generated more than 75 percent of the company’s business. Senior management realized they were running their platform through servers that were more than five years old, and in the event anything happened to that platform, 75 percent of the retailer’s business would disappear. That’s a sobering realization for any retailer.
After assessing the situation, my team developed a geographically redundant, active e-commerce solution, ensuring that whenever any data center issues or outages occur, the retailer can continue to operate online through another facility.
Such redundancy also ensures that data and service can be maintained closer to the customer. How? Because the platform is now load-balanced based on where customers are located. When the retailer helps a customer in California, the traffic is sent to the data center closest to that customer. Not only does the shift improve continuity of operations, it also improves customer service! A robust infrastructure now supports the retailer’s e-commerce solution, and enhances the retailer’s capacity to use data more effectively.
This same retailer was also operating on old, legacy systems that didn’t provide an opportunity to scale. Our CDW team also provided them with a hyperscalable cloud-based solution.
I’ve seen many retailers lately turn to Software as a Service-based solutions, which, like many solutions, offer some positives as well as challenges. The positive: complete e-commerce solutions let retailers set up an online store relatively quickly to sell their goods. Retailers can organize products, accept credit card payments, track and respond to orders via an inventory system as well as customize their storefront.
The challenge: SaaS solutions challenge a retailer’s ability to apply advanced data analytics that allow retailers to learn more about their customers and respond to customers’ individual preferences. It can eliminate the ability to create a multichannel or omnichannel experience, where users experience the same rich customer journey, whether through a physical store location, online or through a mobile application.
A lot of large companies leverage hyperscaler cloud services like Microsoft Azure or Amazon AWS to provide infrastructure to host and differentiate a unique e-commerce platform. That’s where a managed service provider can build and maintain scalable web services to meet peak season traffic. Retailers can then use resources when they need them, and turn them off when they don’t.
What About Security?
Widely reported cyberattacks against top national retailers not only resulted in the spending of millions of dollars to replace customer credit cards, but also drove down stock prices and reduced public trust. Retailers must think about security as they move to any new platform.
A managed services provider brings in-depth knowledge of how to configure cloud services to ensure that both retailer data and customer data are kept secure, and that their systems comply with industry-specific laws and regulations. Applications and systems can be configured in a hybrid setting, where data is secured in hardened data centers, or in a hyperscaler cloud with all of the proper security and controls in place — from encryption to segmentation, and from the appropriate network to web application firewalls.
Managed services help companies adopt new technology that their teams may not otherwise have the skill or manpower to handle internally. For retailers looking to expand their omnichannel presence across physical stores, online or mobile applications, that technology can translate into the company’s ability to keep pace — or even set the pace — with market demands, and provide positive and more effective engagement with customers.
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