I watched with interest recently an interview with NetSuite CEO, Zach Nelson on Bloomberg TV. During the interview Nelson stated his belief that retail wasn’t dead and that Apple had shown the way to all retailers with regards customer experience. Nelson also stated that in his mind, retail would be the next industry to be “disrupted by the cloud”.
In this blog I will examine some of the reasons why retailers might look to the cloud for business management systems that help to grow their business.
Retailers are faced with a battle on two fronts, being squeezed by the need to cut costs at the same time as customers are demanding an increasingly better experience. They expect an ‘omnichannel’ shopping experience where they can interact with a brand through any channel and receive a consistent experience across the board. They want to be able to shop anywhere, on any device and be able to receive merchandise anywhere, hence the rise of offerings such as ‘click and collect’.
Many industry analysts believe that the recent demise of some major high street retailers is partly down to their failure to adapt to the demands of their customer base and offer a complete multichannel experience.
As retail becomes increasingly more competitive and customers more demanding, now more than ever, IT should be a central part in the strategy for growth. They need a system which allows them to sell across multiple channels, centralise inventory management and offer a holistic shopping experience, while closing the loop with personalised customer service and marketing communications. Integration across all channels is key and the cloud offers smaller retailers a chance to compete and punch above their weight.
Cloud offers lower cost of entry
Cloud has completely changed the pricing model for businesses looking to invest in IT for business management. Organisations can now pay for software as an on-going subscription, effectively renting it on a monthly or annual basis, as opposed to purchasing software up front which involves a comparatively large capital expenditure (capex). Many smaller retailers just can’t afford the capex involved in traditional on-premise solutions with the functionality they need. However the software-as-a-service (SaaS) model means that smaller retailers can now get access to larger systems making payments as a continuous operational cost, as opposed to capex.
Cloud also offers more flexibility making it easier to scale up and down based on perceived demand, with businesses only paying for what they consume.
The cloud also makes it easier for business leaders to keep control of their organisation. Most cloud solutions make it possible to access the system on any device that has an internet connection, be it laptop, tablet or smartphone. This allows users to get insight into business performance wherever they are in a world where real-time intelligence is critical. If a key metric is breached an automated alert lets you know, meaning you can act there and then, instead of waiting until you’re back in the office.
Mobile Point of Sale
With cloud solutions offering access on the go, their rising numbers within retail will see an increase in the use of mobile point of sale (POS). With high street sales struggling, retailers need to provide an experience that entices customers to shop in-store and mobile POS could certainly offer an improvement to existing service. Transactions could be processed on the shop floor as opposed to a static till terminal, which would offer a more streamlined purchase for customers.
Consider shopping for a pair of shoes. The normal process is that the sales assistant helps you select them on the shop floor and then you have to wait at the till to pay. How much simpler a process would it be if you made the transaction with the sales assistant there and then? Wouldn’t that offer a better experience while make the sales process more streamlined? And with mobile POS, the sales assistant can still access relevant up and cross sell information.
Therefore although the external environment for retailers is more challenging than it has been for many years, those who embrace their customers’ demand for an omnichannel experience, while streamlining their operations can thrive. And the cloud opens up the doors for many to do this.