As of the third quarter of 2019, brick-and-mortar retailers accounted for 90% of all retail sales — so it’s safe to say physical retail is very, very far from dead, even despite the current COVID-19 coronavirus pandemic that has temporarily shuttered most retailers in a way to stem spread of the virus.
But to continue to survive the physical retailer must continue to innovate as digital commerce players are battling for their sales share.
What retailers need to do, according to two Deloitte Consulting LLC experts, is to become a digitally-powered physical store.
Such a hybrid brick and mortar approach will eliminate physical location headaches that customers don’t like (i.e. long check out lines) and provide a faster and more rewarding shopping experience that will drive loyalty and sales.
And that’s where cloud technology and cloud services can play a huge hole, according to Deloitte Consulting’s David Linthicum, chief cloud strategy officer, and Jerry Hoberman, principal.
It’s what’s driving the emerging grab-and-go cashierless retail payment trend (yes, thing Amazon Go but that’s just the start). Cloud technology is advancing the retail industry through omnichannel customer service, payment options and apps, security and fraud prevention, as well as inventory and warehouse management — all in the name of convenience.
Retail Customer Experience reached out to Linthicum and Hoberman to get deeper insight on how and why cloud adoption should be front of mind for physical retailers and brand.
Q. Where is cloud technology overall at this point in the retail segment — just taking root, full adopted, etc.?
Hoberman: Retail is in the infancy of cloud adoption. Cloud is just getting started through scaling infrastructures and distributing economic costs. Wealth will be generated for those who use cloud as a force-multiplier of wealth through analytics insights, unboundried ecosystems, trusted social networks. The customer will gain better service and products, faster, at a lower cost.
Linthium: I agree.
Q. What is the prime use case for cloud technology in retail at this point — initially it was data backup and redundant systems right?
Hoberman: Infrastructure and SaaS applications are now widely available to serve across all retail functions. The next generation of cloud services will weave customer data across platforms to expose opportunities to delight customer demand and target margin and promotion opportunities.
Linthium: It’s analytics focused. Focusing on the ability to consolidate data, as well as create abstractions that provide meaning to the business. This will be the ongoing battle for retail for the next several years.
Q. What are some innovations taking place using cloud technology?
Hoberman: 5G will expand a new generation of cloud computing. Faster speeds, higher information volumes, and micro-location sensing will elevate cloud to become the fabric of the human experience.
Linthium: Other cloud-based innovations include, the ability to create a near frictionless supply chain, where demand, suppliers, logistics, etc., will be coupled. Thus, a single item being purchased will affect many other systems, including inventory, supplier production, shipping, it will all be automated.
Q. Where is cloud technology playing a role in retail payment strategies?
Hoberman: Cloud has the potential to unlock the value of customer currency. Beyond currency and electronic payment, trading networks will allow the customer to unlock the economic value of their loyalty, personal data, giga insights, and trade. Adoption of digital payments will reduce transaction cost, improve security, and preserve brand trust. As blockchains gain acceptance, the underlying currencies of payment networks will multiply, and payment simplification will be achieved to both consumer and merchant.
Linthium: I agree.
Q. What do you see coming down the road in terms of cloud tech-based innovations in retail?
Hoberman: The next generation of retail innovations that use cloud technology will be focused on personalization. Trusted data, community insights, tailored experiences and personalized offerings will anticipate customer needs to create a delightful experience. These will be supported by 5G connectivity, AI processing, webbed networking and predictive analytics.
Linthium: I would agree.