World events are accelerating change in the retail industry.
As retailers operate through a global pandemic, many are rethinking all aspects of their businesses in order to prepare for the ‘new normal’.
Will consumers’ massive shift to online channels ‘stick’? If so, do existing investments in technology and IT infrastructure take into account what will be needed for retailers to successfully engage consumers? And, just as important, how can retailers identify cost efficiencies across their organisations while simultaneously doubling down on innovation?
While fashion brands are determining how to move stale merchandise and get back to seasonal assortments, grocers are working to reinvent their supply chains for better demand forecasting and allocation.
Both are looking to diversify to avoid dependence on a single source, and all retailers with physical stores are focused on making shoppers feel safe coming back to stores.
As retailers work to recover revenue and attract new shoppers, they need to quickly drive costs out of the business.
Cloud technologies will be the key enabler for companies here, whether that’s to reinvent legacy applications for new value, drive efficiencies into the supply chain, or enable differentiated customer experiences regardless of channel.
Cloud migration significantly cuts IT infrastructure costs for retailers, enabling them to reallocate those funds to experiments.
Retailers can then reinvest that newfound budget into new initiatives such as machine learning (ML) projects that identify sometimes counterintuitive insights about their business and shoppers that would otherwise remain undiscovered.
This results not only in operational efficiencies, but also in uncovering new ways to delight shoppers based on new habits formed when restrictions were put in place due to the pandemic.
Because of the cloud’s agility, we’re seeing many projects that once took years to get done being accomplished in just weeks, and those that took weeks now completed within days.
In addition to important trends like working from home, here are just a few ways customers are innovating during these uncertain times as they accelerate the migration of core applications to the cloud:
1. Retailers are moving beyond traditional data analytics to apply ML to get counterintuitive and previously unseen insights that help them respond to business trends in near real time during the pandemic.
2. As stores begin to reopen, shoppers want as many contactless experiences as possible – from contactless mobile payments and cashier-less shopping to safe and easy curb-side pickup. Buy Online Pickup in Store (BOPIS) is rapidly moving toward a Buy Online, Pickup at Curb (BOPAC) model.
3. As curb-side pickup becomes an increasingly popular option for shoppers, stores are becoming micro-fulfillment centres, requiring new ways of managing in-store inventory.
Reinventing the retail store experience will take time.
It will require looking at how computer vision, robotics, IoT, and other technologies can make stores safer and provide shoppers with a better experience.
* The author is head of strategy at AWS Retail