Ed Durbin, global director for retail end user computing, VMware Nothing quite changes buyer behaviour like a pandemic. Particularly in retail where the last 18 months have irrevocably altered how, when and why we shop while resetting consumer expectations in terms of experience. Improve, stand-out and innovate As a result, we’re in a situation where […]
Jarek Matschey – Retail Industry Director VMware EMEA
Few sectors have experienced such a dramatic polarisation of fortunes than retail. On the one hand we’ve seen major names – those that we have come to rely on – such as Amazon and supermarket chains like Tesco strengthen their position and market share. Others shut, some permanently, while many relied on pivoting and adapting to the situation. The result? A retail landscape that has evolved out of all recognition.
Given these massive changes in the retail sector, we recently gathered a few of our retail customers and partners to take a deep dive into what’s happened and, more importantly, what’s likely to come. I had the opportunity recently to participate with other retail industry thought leaders to discuss Transforming Retail with Cloud-First Technologies in a recent webcast . Other discussion panelists include Nicolas Forgues, SVP & CTO, Carrefour, Andy Eisner, Director, Google Retail Industry Solutions and Mark Bowker, Senior Analyst, ESG.
A trend to cloud-first and cloud-only
Mark set the tone by presenting some of ESG’s latest research around retail application appetite and trends – something gathered over four years so, before and during the pandemic. There was no doubt that the research demonstrated a clear-trend towards a cloud-first posture and, conversely and shift away from on premise policies. The data showed that in 2018, just 29% of organisations had a cloud-first policy but leapt to 45% in 2021. Similarly, nearly one in five (24%) of organisations had an on premises policy in 2018, which drops to just 10% in 2021.
More pertinently, the research also highlighted that it is younger organisations that have a more voracious appetite to go cloud-first and retail was the number one sector by far. While it is refreshing to see retail at the top of the tree as far as innovation and adoption goes, the research also highlighted more needs to be done with less than a quarter of companies having what they consider to be ‘mature digital transformation’. Retail jumps out as a sector because the research informed that business priorities with regards digital transformation are to; become more operationally efficient, to allow more collaboration inside organisations and to improve the customer experience. So what is it about retail that’s driving it forward as a sector at such a pace?
The retail sector is being driven forward by different factors. The most notable is performance scalability. Historically, retail sites were run with a few, predictable events a year – Christmas, Black Friday and the others. Now these kinds of events are bigger, more frequent and last longer, often driven by unpredictable market forces. It’s all about growth-on-demand and the ability to scale and to do this adequately requires a cloud policy to match. Cloud is also driving flexibility. On premise is, by nature, quite rigid. The events of the last 18-months have highlighted the world is nothing, if not unpredictable, so businesses must have API-first strategies with cloud enabled technology to be able to quickly pivot, experiment and get things out to market faster.
Finally, there’s the cost element too. Especially in an era when every buck matters to retail. If there’s doubt or uncertainty a retailer will go with what – or who – they know. Any cloud facility will also need to match the cost structure to which it is bound by, either CAPEX or OPEX and ideally with the ability to adjust as required.
Agile operating mode
The panel also discussed the biggest impact of the pandemic to retailers and here, ‘flexibility’, was the name of the game. Both Andy and Nicholas discussed the ways retailers have pivoted to change their business models or drastically improve the existing business model to meet that new demand. Something known as the ‘agile operating mode’.
It’s something we’ve also seen at VMware. Customers that were investing in digital infrastructure and transitioning their businesses ahead of the pandemic were quickly able to adjust. Because of the shift to online almost overnight, these businesses massively benefited by being able to interact with customers when and how they were required. Serendipitously, it was a competitive advantage automatically created by the situation not of their making. It’s prompted a change in mindset with many now thinking and preparing much more for a disrupted future.
Other factors highlighted in this part of the discussion included having the right architecture, generating the mindset to try different things, adjust and improve, capitalising on the opportunity to accelerate the transformation when it comes to collaboration ensuring staff have the best tools and environment to carry out their roles.
Delivering a customised and personalised experience
Of course, no discussion on retail would be complete without the mention of the King of this landscape – the customer. Especially as the evolving consumer expectation is fueling many of the changes we are seeing. Retailers are doing everything in their power to provide a seamless experience to the customer. Something powered by a cloud-first strategy.
But let’s not forget that a cloud-first strategy is intended to execute a customer-first strategy and improve customer experience. They’re doing this by removing friction for employees to access the right tools and having access to the right data as they interact with customers or as they work with the supply chain to deliver the right things to the right place at the right time. Starting with something as simple as mobile devices. There are companies out there that have created an environment where an omni-channel interaction, starting and ending in different places can happen in the palm of an employee’s hand. This has positive ramifications way beyond simply checking if the right size is in the store but leads to improved delivery, customer satisfaction and service, quicker sales turnover, more engaged staff and ultimately, selling more stuff.
The retailers delivering this optimal experience are the ones winning but in doing so, it has hugely increased the value of customer data. This is especially the case for brands using it to create unique and personalised experiences. Andy summed it up well by saying, “today’s consumer expects a relevant, customised, personalised experience from the retailer, and the only way to be able to provide that is to centralise all that data in one place”.
Carrefour and its cloud-first path with Google Cloud
The topics of cloud-first, digital transformation and creating the optimal customer experience is also explored in a new Carrefour-Google Cloud case study where ‘this desire to understand customer needs and offer the best retail experience on the market remains Carrefour’s raison d’etre. Carrefour moved its on-premises landscape to Google Cloud VMware Engine, leveraging data to offer consumers tailored ecommerce experiences, while reducing operating costs by 40% and energy consumption by 45%. To accelerate the supermarket giant’s transition to the cloud, many on-premises data centres were closed and the applications moved to the cloud. As Nicolas Forgues, CTO, Carrefour France says: “To transform your applications, you need to transform your operating model. Google Cloud VMware Engine is a powerful tool that enables us to accommodate our journey to the cloud with the pace of change that is required for an organization our size. By 2022, we’ll have 50% of our workload in the cloud, and most of it on Google Cloud.”
Building a future-proofed retail operation
There was so much more ground we covered but that’s not surprising for such a rich topic area. VMware and Google can help retailers all the world navigate and succeed in achieving desired business outcomes of growth, efficiency, and personalised consumer experiences.
For more information on VMware retail solutions, please visit us here, or here are a few additional resources:
- Watch Transforming Retail with Cloud-First Technologies webcast
- Read our IDG Industry Spotlight whitepaper
- Discover Google for Retail solutions
- Learn more about accelerating your Cloud journey with Google Cloud VMware Engine for Retail brochure
- Contact us to qualify for a complementary Google Cloud VMware Engine proof of concept at GCVEsales@vmware.com or https://cloud.google.com/contact
Category: News & Highlights