Transforming Retail Experiences with Cloud Technology
Read time 6 mins
Not too long ago, cloud technology for retail companies was limited and the main interaction with customers was through selling goods from brick-and-mortar locations.
Back in the early days of mass internet usage (at the end of 1995, about 0.4% of the world’s population used the internet, jumping to around 5% by mid-2000, and almost 65% nowadays), most people would head to physical locations to purchase goods. This meant that customer experiences of retail-focused elements such as ‘are the employees helpful?’, ‘did the shop have what I wanted in stock?’, ‘is it easy to return unsuitable items in-store?’, drove the customer experience.
However, as we know, the world of retail quickly evolved with the rapid expansion of cloud technology, and online shopping disrupted the days of limited inventory space and high rental costs for well-located physical shops.
As eCommerce evolved and people became more comfortable spending online, retailers had seemingly unlimited opportunities to connect with potential customers. This made it easier for brands to grow into larger entities and offer more products to their customers.
The impact of 2020
Like many sectors, though, back in early 2020, the retail industry suffered hugely under the weight of the COVID-19 pandemic. Social distancing measures forced retailers to close-up shop and lay off employees in droves, giving only those with robust eCommerce sites already in place a chance to quickly pivot their operations and weather the storm.
As lockdown measures eased in 2021, retailers were once again boomeranged into rapid change. The ‘great re-opening’ saw customers flock back to retailers, eager to experience physical, in-store shopping after months spent indoors. However, there remained (and remains still) a higher level of eCommerce customers than ever before, and this resulted in a new generation of omnichannel shoppers and a whole different set of expectations for retailers to meet.
In an industry where uncertainty and volatility have become the new normal, efficient and effective digital transformation is a proven method for retailers to remain flexible and adaptable during tumultuous times.
For retailers looking to build on this versatility, supporting future aspirations for growth (or, indeed, dealing with more bumps in the road), below we outline some of the ways cloud transformation is helping to change the face of retail in 2023.
More specifically, we explore the ways investing in cloud technology currently facilitates retailers to meet ongoing and still-changing customer demands, integrating physical and digital experiences cross-channel and offering more cyber security.
Exploring how cloud-native infrastructure allows retailers to deliver seamless, engaging, and personalised customer experiences across all channels helps the world of retail become increasingly futureproof. After all, if the retail success stories of 2020-22 share any common trait, it’s that those brands that had already implemented digital transformations and transitioned their technology foundation to cloud-based systems were the ones to come out on top.
Transforming retail in 2023
According to Gartner, worldwide end-user spending on public cloud services is forecast to grow 20.7% to a total $591.8 billion in 2023, up from $490.3 billion in 2022 – and retail is no exception to this trend. From reducing costs to facilitating same-day-delivery, cloud computing is set to transform retail in unprecedented ways:
1. Keeping up with retail trends We’re all familiar with self-checkout by now, but it’s one example of the way technology (in this case, POS systems) may be utilised to meet changing customer expectations – a big one being bridging the gap between online and offline shopping experiences. In 2023 for instance, modern POS systems facilitate efficient inventory management and unify online/offline transactions so that inventory is updated whether products were ordered online, purchased in-store, or ordered online for pick-up/payment/return in-store. This means customers can shop flexibly and conveniently, blending online and offline for higher satisfaction and shopping ease. Cloud computing means that retailers are able to respond quickly to new market trends since it allows for adjustments in resources, e.g., scaling storage, server capacity, and computing power up or down to meet the demands of the business. 2. Offering better customer experiences At present, many retailers are not making the most of the customer and sales data they collect. However, with a suitable cloud transformation – this can be unlocked without significant upfront capital investment enabling retailers to leverage large amounts of data from all kinds of connected devices. The use of data analytics has seen a rise of late, with the cloud becoming more secure, reliable, and affordable for data storage and processing. In the case of retail, this is particularly useful when it comes to analysing buying behaviours and spending habits, as this gives businesses insight into how they should be marketing to their audiences (e.g., through particular channels or at particular price points). More than this, cloud transformation also makes room for data analysis using artificial intelligence. This benefits retailers because AI can quickly track and distinguish patterns that lead to data-driven decision-making. An example of this could be using AI to determine engagement levels with the brand across social media and cross-referring this with geographical location data to decide the best place to open a new store or launch a new product. 3. Improving data protection As we have established, retailers increasingly store and process huge amounts of data, with much of this being personal/financial. Rather than storing this data locally, cloud computing is likely to become a necessary component in data storage and protection since it offers scalability, high performance, and cost effectiveness, as well as providing an added layer of protection from hackers and data loss. In the event a breach should occur, however, cloud-based disaster recovery (cloud DR) is also far superior; again, in terms of scalability, cost-effectiveness, and reliability. This is particularly true when cloud DR is utilised alongside a managed service provider (MSP) to share their significant cloud computing expertise and offer a wide range of tailored backup and DR services. 4. “Physicalising” digital experiences Whilst we have touched on the ‘bridging’ of online/offline shopping activity above in this article, it’s also interesting to consider how cloud computing can facilitate the blurring of these two worlds further. Remember, many industry experts predict that the future of retail will not be a matter of platform, but of experience. Indeed, by leveraging the power of the cloud, many retailers gain the ability to simulate much-loved elements of physical shopping (e.g., the social aspects of physical shopping). This new retail approach is a way for marketers to meet the contradictory demands of modern shoppers post-COVID and help brands succeed in both online and offline worlds. Innovations such as live video shopping events allow shoppers to interact with products by asking questions or posting comments in a group-chat-like setting (customer service agents can also answer questions in real-time and provide product demonstrations on cue). Elsewhere, augmented reality (AR) has been adopted by retailers to replicate in-store browsing. In this instance, customers feel like they are ‘walking’ down the aisles and can ‘pick up’ products to engage with more information about them. The collaborative ability of cloud technology allows retailers to also develop solutions which replicate the experience of shopping with friends. Squadded shopping, for instance, encourages users to shop online with people in their network by utilising video and screen-sharing technology. The goal of modern retail is to create a seamless experience where offline and online coexist and co-develop throughout 2023, with cloud technology playing a huge part in facilitating this goal. Many retail businesses have witnessed strong growth by integrating and gradually switching to cloud technology whilst reducing operational and infrastructure costs, improving security, and benefiting from real-time access to data. To discuss how Littlefish’s cloud solutions can support digital transformation at your organisation, please get in touch via the green contact button.
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