There’s one clear message that has come through in my series of industry-based blog posts: fundamental change and transformation is occurring everywhere, irrespective of industry. While there’s no absolute answer to the question of which industry is undergoing the most change, there are strong arguments for the case that retail is going through significant disruption. In this post, I will discuss the technological changes occurring in the retail industry, uncover some of the key drivers behind these changes, and examine how information and communication technology (ICT) are being leveraged by retail CIOs to achieve those basic business imperatives of growth, efficiency, cost reduction and productivity.
What will be the game changer for the retail industry in the year ahead?
It is impossible to talk about a modern retail environment without discussing the concept of the “omni-channel”. The term omni-channel is an evolution of multi-channel retailing, which in essence is the ability for a retailer to connect with their customers through various mechanisms, ranging from brick and mortar stores through to TV, radio, internet and mobile. Omni-channel is the embodiment of third platform computing, which mashes together the various online channels that retailers connect to their customers, in a seamless and cohesive manner, to provide the best possible retail experience.
From a technology perspective, heavy investments in sophisticated warehouse systems, supply chains, customer relationship management (CRM) and business analytics will be needed to support omni-channel retailing. A number of large transformational projects have taken place as key established players within the sector move to create integrated omni-channel capabilities.
While the omni-channel may be the phrase of the day, the fundamentals are still critically important to retailers. Cost-management technology deployments are still required – including supply chain management, inventory management and investments relating to employee productivity. IDC supports this prediction by stating that by 2016, 50% of national retailers will invest in distributed order management, enterprise inventory visibility and workforce management to enable same-day fulfillment.
How can retail organisations keep pace with the challenge of running their data centres?
One of the fundamental challenges for the retail IT executive is the balancing act that needs to be struck between the yawning gap between requirements of existing and new systems. To help bridge this gap, there is strong advocacy in the market for a two-speed IT that can support the requirements of legacy and existing applications, such as ERP, SCM and POS, while providing a stage to support third platform workloads, such as applications with embedded social capabilities, or small mobile apps developed and delivered rapidly via the cloud with vast analytical capability on the back end.
A specific industry approach called “Lean Retail” uses compute, storage and management technology as well as network architectures to reduce costs and increase innovation. If implemented properly, Lean Retail can increase a retailer’s agility in responding to and shaping the consumer’s experience. A successful Lean Retail implementation starts in the data centre and has three pillars:
- Reduce unnecessary infrastructure from stores and centralise IT equipment to the data centre, then consolidate
- IT infrastructure remaining in stores should be consolidated and virtualized
- Automate and maximize the functionality of IT equipment in the store
Many retailers need to quickly accommodate new websites and mobile apps, incorporate new stacks of technologies entering their environments to perform tasks such as big data and analytics, while taking a homogenized view of infrastructure to reduce inter-technology friction.
Consolidating applications on platforms that combine server, storage and network virtualization enables retailers to rapidly move compute loads to fewer machines, in order to meet the needs of the business during different times of day, week and month. In order to achieve this, ICT strategies should look to create an environment that facilitates future web services while simultaneously enhancing current and legacy environments.
In this context, how can VCE add value to retailers?
Within a retail environment, VCE adds tremendous value on a multitude of fronts. With retail CIOs under pressure to upgrade data centre in very short timeframes to meet new program launches, our industry-leading time to market solves this critical problem better than any other provider on the planet.
It’s important to understand that to realize the benefits of omni-channel retailing, retail CIOs must increase their agility by installing infrastructure that can scale for enterprise-wide deployment of new services. This is, however, only one piece of the puzzle, with many retail environments needing not only scaling, but also velocity when deploying infrastructure as well as applications that support business services.
VCE has industry-leading technology in the Vblock System to provide the best platform for a retail organization to implement a Lean Retail strategy. The high-end Vblock System 720 provides the scalability and performance required for a highly consolidated environment, supporting multiple workloads. The compact, but powerful Vblock System 100 brings the benefits of converged infrastructure to regional, branch and store locations. Vblock Systems provide the foundation for a Lean Retail solution that gives IT the centralized command and control to efficiently operate the retail platform of the future.