The COVID-19 pandemic has changed the way people shop, making it critical for retailers to gain a better understanding of the current demand so they can move merchandise accordingly. To meet these challenges, retailers across all sectors are putting their trust in cloud services. Running on cloud services will allow retailers to have a unified and solid foundation to effectively manage and control essential activities, such as purchasing, order fulfillment, processing, and closing out invoices.

The past year has indeed been one of the most challenging years that retailers have ever had to face. Many retailers had to scrap their playbooks and make adjustments on the fly because they needed to adapt to the shutdowns and the unexpected demands of various products.

The retail vertical is one of the fastest-growing verticals in relation to the adoption of innovative solutions, such as cloud services. There are several factors driving the adoption of cloud services, including are the rising purchasing power of customers and the need to fulfill customer expectations. Online retailing and cloud services have caused a significant disruption in the retail vertical, leading to increased adoption by retailers across various sectors. Conversations about cloud services will generally start with “why” and “what”, followed by more questions of “who,” “how,” and “when”.

”This conversation is less about how it will affect retail and is more about the impact on the layers of retail. Enterprise-level retail has used cloud technology effectively for many years. What we have seen over the last 18 months is a dramatic increase in cloud usage by the SMB retail space. Some of it from necessity (digital transformation as a result of COVID) and some because the technologies are becoming the smart financial decision for many small business owners focused on improving cash flow and reducing capital expenses”, said Mike Shelah of Advantage Industries.

”This particular segment was hit very hard and the smart ones adapted & innovated to stay ahead of the curve and take advantage of technology that was previously only available to large organizations with 100’s of seat license requirements. We have witnessed numerous competitors emerge with low or no set license minimums and that has forced many big-name cloud and software providers to follow suit”, added Shelah.

Growth of the Cloud/Cloud solutions in the retail industry in the last few years

In recent years, many retail businesses have witnessed growth by integrating cloud services to significantly reduce operating costs, improve security, provide real-time access to inventory, and offer a seamless experience for their customers. Nick Martin of Mainstreet IT Solutions said:

”Cloud adoption is happening across the board in various industries. Some industries have adopted a cloud-model quicker than others, but retail is no exception. The retail industry is predictably implementing cloud architecture as it looks to make technology a differentiator among its many businesses. Companies like Microsoft have started developing entire cloud ecosystems around the retail industry (Microsoft Cloud for Retail) as companies look to expand the data collected about their consumers to provide a more personalized experience. The retail industry is a highly competitive market that looks to differentiate itself any way it can. With high competition and pricing that varies little from company to company, retail is looking to differentiate using technology as its backbone. And which direction is technology heading? It’s going to the cloud.”

Martin added:

”The usage of cloud technology also allows smaller companies, with a smaller IT footprint, to start competing with some of the bigger players in the market. As this technology is billed on scale in the cloud, the smaller businesses within the retail industry can start operating and collecting data to provide a more personalized experience as some of the Fortune 500 retail companies. That doesn’t mean that these companies can easily compete or out-market those companies, but it certainly gives them a fighting chance. With this kind of benefit, it’s no wonder that retail companies are driving towards the cloud at a rapid pace.”

What are the drivers of Cloud growth in the retail industry?

One of the drivers that previously held businesses back from using cloud services was their costly investments in an on-premise infrastructure. How could a company possibly justify getting rid of the equipment and services they are currently using in exchange for the use of an external service? However, over time, more providers have been making it easy for businesses to expand their existing infrastructure into the cloud.

”The retail industry has undergone a major rehaul since the Technology Cloud age. The innovation has gotten faster, easier and better and for the benefit of the end customer. What used to be a fragmented portion of software (Point of Service vs Inventory vs Finance) is getting more and more integrated, considerably increasing the productivity of Retail Operations”, said Ashu Singhal of Orion Networks.

”The retail industry has been poised for cloudy realization for many years. The consolidation of multiple locations’ data is key to a business understanding what products are needed at each location. Business analytics can drive better results through the consolidation of data from multiple location points in the retail industry. Lastly, with retail space being expensive, the less hardware necessary onsite allows for that space to get used for inventory or customer-facing space”, said Ilan Sredni of Palindrome Consulting, Inc.

What are the Cloud use cases for retail?

The shift to the cloud has brought about several solutions that make doing business in the retail sector easier. It does not matter if it is cost savings, increased flexibility, or ease of use, retail businesses are transferring their workflows to the cloud and still maintaining a competitive advantage.

”We actually managed 140 Verizon Wireless stores. So, for me, the cloud is essential for retail. Especially when you have multiple locations. The advent of SD-WAN, Bluetooth location integration with POS systems, and the ability to have centralized inventory and POS systems, I think, allow retail outlets to be more nimble and adjust and not have wasted inventory. I just saw a company that had a concept of selfie kiosks that will enable the store, distributor and manufacturer to get real-time analytics on what is selling and not selling to give them the ability to make adjustments in ordering and also selling in realtime”, said Ravi Jain of Technijian, an Orange County IT services company specializing in retail.

Cloud services provide retailers with the tools and solutions they need to improve the customer experience, deliver value, and achieve short-term and long-term business goals.