Tip 1: Get a grip
“As retailers examine their business and operational models, the kinks in their technology stack will become abundantly clear,” Pieter says. “Legacy systems are slow, difficult to change, and not flexible enough to accommodate the rapid pace of change in retail. So it’s usually not hard to convince retailers that they need to discard their old systems in favor of a cloud-based solution.”
And Raymond adds that many retailers immediately reap some unexpected rewards from their move to the cloud. “Some of our clients have not only reduced their Total Cost of Ownership (TCO) by more than 50%, but have also seen an almost immediate increase in revenue and turnover as well. After all, responsive, fast, well-running platforms keep customers around longer, and keep them buying.”
Sound too good to be true? Raymond says many clients think so at first. “But once the system is up and running, it doesn’t take them long to realize that the adaptability of API-based cloud services offers retailers everything they need to stay flexible in the changing retail world and keep their customers happy.” Public Cloud providers like Microsoft enable rapid delivery of true benefits for retail with its Dynamics 365 platform. AWS and GPC also have many services to support the retail business.
Technology is what makes transformation happenRaymond Konings, Director Cloud Practice
But both Pieter and Raymond advise against the temptation to simply off-load your current legacy system to the cloud. That’s not enough to achieve true agility. “Only when you disassemble every part of your technical operation and reassemble it piece-by-piece can you really get the benefits of the cloud environment,” Raymond says. “This also makes you more flexible to choose the microservices and software vendors that will bring you the platform to serve your needs and satisfy your customers.”
Pieter recalls a time when a software vendor claimed to be on the cloud, but turned out to be faking it. “It doesn’t take long to discover which solutions are truly cloud-based, and which ones are simply stored on the cloud,” he says. “The majority of bugs and delays happen when a software vendor or product is running on a slow legacy system that isn’t adaptable on the fly.”
“Mirabeau has been working with cloud solutions for years – long before it was even popular to do so. So we know what it’s capable of, and how it can help retailers grow their business. We only use infrastructure as code that supports the application environment. We work in a data-driven way to support retailers’ goals, and help client teams focus on a data-driven way of working. We love to work with dashboards to make it visible for everyone. Is your whole team aware of the important KPIs? They should be.”
Tip 3: Address the Challenges
As incredible as a flexible technology stack can be, it is not without challenges. As with any technological development, security and privacy must always be top of mind. And every country has its own regulations for managing data and ensuring privacy. That’s on top of the EU regulations for consumer data privacy, like GDPR.
“We’ve had clients that needed months to get on the cloud because of legislative requirements,” Pieter recalls. “But even here, the power of a flexible technology stack can help. We can combine solutions that meet the regulations in various countries into a single, integrated system. So retailers can ensure they remain compliant, and the system remains agile and responsive.”
Tip 4: Turn threats into opportunities
Sometimes, transformation happens whether you want it or not. Still, it can transform the way a company looks at the power of their technology. “A major multinational retail organization was notified that they had to move their eCommerce platform because the data center was going to close. They had to choose between private cloud or public cloud. The advantages like agility, stability and cost reduction seemed almost to good to be true, and the client found it hard to believe,” Pieter explains. “They only had a year to make the transfer, and there was some concern about whether it would be possible.”
Less than eight months later, Mirabeau - a Cognizant Digital Business had migrated a heavily customized IBM WebSphere Commerce Suite (WCS) – including production and non-production environments for 38 websites across 8 high-profile brands – onto the AWS Cloud. In a process that usually takes a year or more, the Cognizant team enabled the retailer to migrate to the cloud, mitigate trade risk, reduce hosting costs by a factor of four, reduce TCO by nearly 70% and achieve ROI within one year. “After that, the client became a true believer in the power of the cloud,” Pieter laughs.
“But the biggest advantage was the increase business agility they achieved,” Pieter says. “Provisioning a new environment or a set of servers now only take hours instead of months. Day-to-day platform performance is more stable, and background latent errors have nearly been eliminated. The retailer can now make customer experience improvements easier, faster and cheaper than ever before. So, what started out as a stressful and worrisome project has turned into a real competitive advantage.”
As retailers examine their business & operational models, the kinks in their technology will become abundantly clearPieter Post, Principal Consultant Retail
“Small start-ups often transform faster than legacy companies, and that’s no really a surprise,” Raymond says. “With shorter reporting chains and less history to contend with, smaller companies tend to be more agile by nature. But big legacy companies can learn a lot from the start-up mentality. After all, a cloud environment is easily scalable, so with an enterprise mindset, large companies can develop new ideas as fast as small companies do, and then scale up throughout the organization.”
Tip 6: Don’t forget your bricks and mortar
Both Pieter and Raymond emphasize the important of bringing all that digital insight into the brick-and-mortar stores. “Having an agile and integrated online environment is only the first step,” Raymond says. “If the experience in the physical store doesn’t match the convenience and service on the web shop, then retailers will miss opportunities.” And all the data the online environment gathers can make all the difference. It’s how retailers gain insight into the services that customers really want.
“The American grocery store giant Kroger is a great example of this,” Pieter explains. “With a mixture of digital solutions, IoT, apps and customer insight, Kroger launched EDGE, a cloud-based signage solution that makes in-store shopping personal and interactive, and also reduces Kroger’s electricity consumption and paper waste.” The digital signage on the shelves alerts customers to items on their shopping lists, indicates locally grown products, enables dynamic pricing, and much more. “Kroger listened to its customers’ wants and needs and developed a solution that is set to increase sales and reduce waste in all its stores,” he says.
And just as you hire experts to get your technology stack in order, the right experts in-store can have a major impact, too. IKEA is taking steps to improve the in-store experience. With special design consultants, IKEA is helping customers make better, more effective choices in their home furnishings. “IKEA’s store concept is already exciting and fun,” Pieter says. “Now, it’s added consultants that can help you design the ideal kitchen or living room, based on your needs. Imagine what can happen if IKEA extends this team with some stylists. It is moving from a popular brand to a truly helpful partner in home design, which increases its value for customers.”
Tip 7: Get control, keep control
With all the fast flexibility that the cloud offers, Pieter and Raymond warn that it’s easy to lose control. “A cloud-based, API-led environment is a DevOps team’s playground,” Raymond laughs. “It inspires teams to develop and test countless new products and applications. And sometimes, that can lead to higher cloud costs or to a lot of development that doesn’t fit the company’s goals and values, and therefore a lot of wasted time and money.”
“You need a strong CDO or CIO who can ensure that DevOps isn’t just developing products and services for the fun of it, but focusing on creating customer value and a differentiating experience,” Pieter adds. “A clear vision / roadmap, based on customer journeys and specific objectives will keep DevOps running like a well-oiled machine.”
A cloud-based, API-led environment is a DevOps team's playgroundRaymond Konings, Director Cloud Practice
One of the best examples of how the right technology and insights from data can transform a business comes from Dutch car leasing company LeasePlan. Once LeasePlan had set up a B2B platform to manage the re-sale of previously leased cars, they started collecting data to track how those cars were resold. The data revealed a potentially powerful idea: LeasePlan could sell those previously leased vehicles to private consumers, and could pinpoint with accuracy the true value of the car, given its careful maintenance record and vast experience in the automotive field. Therefore, LeasePlan could offer very competitive pricing, and keep its finger on the pulse of customer demand.
And so, CarNext was born. A B2C platform offering the best prices on well-maintained cars that customers really wanted. With CarNext, LeasePlan entered the retail space with an entirely new offering and a strong value proposition. With a flexible, agile, cloud-based platform, CarNext can swiftly adapt to changing customer demands, like the increased desire for electric cars or specific car models. Read about how Salesforce played a big role in the transformation, in this Dutch-only article.
There’s no transformation without technology. But how and where you implement that technology is key. Retailers and CPGs who want to keep the pace of change need to get agile. And partner with experts who know how to embrace the power of the cloud.
From your business model to your operational model. From your organization to your technology. Keeping up with the pace of change in retail is no easy task. But when you take it one step at a time and keep an Enterprise View, change will become part of your DNA. And the future will look very bright indeed. This is the final article in the second edition of The Click. Thanks for staying in touch.