A brave new world for retail IT
Photo by iStock.com
By Nick East, CEO, Zynstra
Retailers are utilizing IT in pursuit of two key goals — improving customer service and driving down cost. As a result, all IT investment has to be justified against improvements delivered in both of these areas.
When it comes to cost, how technology is deployed, supported and updated across hundreds or thousands of stores is critical. However, in a highly competitive landscape constantly shaped by changing customer needs, IT should be a strategic enabler, driving the business forward, fostering innovation and providing the platform for retailers to improve the customer experience while achieving operational efficiencies.
The multi-channel landscape
Overall, there is the growing realization that a distributed store environment must be better integrated into the IT estate. In this way, it can be better used to optimize the customer journey and leverage brand equity.
This is especially true in today's multi-channel environment where the customer journey has to seamlessly integrate across all platforms, including social, mobile and in-store. In order for the customer to get the same experience across stores and the digital domain, there needs to be an integration of retail systems across all locations — and in-store in real time. Whether that's having mobile sales personnel armed with tablets or increased use of mobile payment terminals throughout the store, there needs to be the right IT backbone, in-store, to support it. So much of today's discussions center on the new front-end applications retailers need to elevate the customer experience, but unless they have the correct back-office infrastructure in-store it is near impossible to introduce new services efficiently.
So what is needed from IT to make this all a reality? Both from an in-store and customer journey point of view.
Innovation — advanced applications
The use of new applications can drive new customer experiences. These new applications need to run across multiple device types and may rely heavily on advanced graphics and advanced POS activity. They require a virtualized infrastructure that can efficiently, flexibly and reliably support multiple applications without inbuilt latency issues.
In addition, retailers need the in-house skills and resources to make implementation of the applications and service a reality. In research recently commissioned by Zynstra, retail IT decision makers identified budgets (48 percent), difficulty in delivering consistency of in-store versus online experience (39%), presence of legacy IT (34 percent) and lack of local store IT skills (29 percent) as the main challenges they faced in getting new applications and services into stores. The research further found that 83 percent of retailers would definitely implement more new applications if it was easier to do so.
The value of data and analytics
The use of data in the retail environment is key to success, from purchasing to customer loyalty. In the multi-channel space, with a focus on personalization and customer retention, integrated analytics can add tremendous value. And this approach will only increase in importance as in-store technology advances — think facial and shelf image recognition, weight and RFID sensors, beacons, digital signage and in-store push notifications.
Importantly, this data needs to be collected from multiple devices and analyzed locally, often in real-time with periodic communication and reporting to centralized control points.
This leads to a discussion on the use of cloud. Local in-store IT needs to be integrated with the advanced analytics capabilities, centralized control and scale of the cloud, whether that's delivered on public or private infrastructure. This doesn't necessarily affect customers directly, but streamlines operations, which contribute to delivering that experience.
Storing data locally
Following on from the use of and need for advanced analytics, IT needs to be able to support the collection, analysis and storage of that data. In many cases, data must be stored and manipulated locally for bandwidth, latency and policy reasons. The more data that is collected in store, be it from beacons, sensors, or other devices, the greater the requirement for efficient local storage.
This is especially important as end user applications frequently need to run locally on devices to deliver the performance, responsiveness and reliability required. These can be best served by local compute/storage infrastructure that is lightweight, fit for purpose, coordinated on a scheduled and regular basis, and delivers the responsiveness that customers expect from their devices.
The way forward
Current infrastructure does not support these requirements and is a costly overhead. This is why innovative retailers are now looking to upgrade their in-store IT infrastructure, either by applying ‘edge scale' automation and virtualization software to extend the life of existing hardware, or by replacing in-store systems. This will enable them to have a platform to implement efficient deployment of new services and applications — as well as reducing the time to market of promotions in line with seasonal campaigns. Picking the right software platform also reduces their store cost to serve customers.
Virtualized, centrally managed in-store IT software can offer retailers the flexibility, responsiveness, control, and cost efficiency that they demand. 2018 will see more and more retail leaders across all sectors making a commitment to an in-store infrastructure that provides an answer to today's operational challenges, and a platform for future customer experience innovation.