The road to post-pandemic recovery for most industries seems long, though there’s an inherent need to bring the global economy back to life. Several industries have seen some positives, such as the retail sector, which has shifted to Digital channels enabled sales.
According to Mastercard SpendingPulse, U.S. e-commerce sales made up roughly 11% of total retail sales in 2019; during April and May this year, that doubled to 22%. Similarly, a study estimates that in U.K. for the month of May, e-commerce spending on groceries increased by 76% YoY, while at the same time e-commerce luxury spending decreased 14% YoY, reflecting an emphasis on needs versus wants. In light of 2020 global impact, retailers should consider the role of cloud technologies as they revise their strategies to ensure their ongoing relevance and growth.
Several trends are driving the future of retail and the industry’s “new normal” as it emerges from the crisis and looks toward the future.
1) Embracing Digital for the Customer Experience
Retailers are at the forefront of providing unique customer experiences to drive more sales. As we discussed in this webinar with Techonomy, the customer experience will continue to evolve as businesses navigate the “no-touch” age. In this new normal, it has become even more important for both online and brick-and-mortar retailers to differentiate themselves and provide personalized buying experience.
For online retailers, it is crucial to give customers personalized recommendations, while brick-and-mortar stores must reinforce a safe in-store experience with minimal contact. Providing post-sales service through various digital and traditional channels should also be examined, as brand loyalty will become even more important in the absence of face-to-face connections.
2) Navigating Cash Flow Issues
With increasingly limited cash flow, retailers are finding it difficult to invest upfront in new projects or maintain some existing investments. Innovative models can help them manage running expenses while empowering them to be creative at the same time.
3) Mitigating Supply Chain Disruptions
In the new normal, COVID-19 had impacted not only demand but also supply chains due to disruption at various points. Retailers need to adapt to these changing conditions.
4) Exploring M&A Opportunities
Retailers that struggle with day-to-day operational expenses will be prime candidates for consolidation. Whether through acquisition or merger, struggling retailers may look to bigger companies to provide sustaining cash through changing times. Yet M&A comes with its own set of issues, including but not limited to technologies, culture, and processes.
Drivers for Innovation Amid the Recovery
In our State of IT Infrastructure Report 2020, we asked respondents to share the factors influencing their need for innovation throughout their organization. An overwhelming 75% said it was the need for new solutions and new ways of doing things, a higher figure than the 68% who cited the need for new business models, and the 52% who said it was a need for business intelligence and data monetization.
This response reflects retailers’ urgent need to transform and get more value from technologies and processes around cloud, mobility, virtualization, and networks. When combined, these can assist with disaster recovery, business continuity, security, service management and IT helpdesk support. The COVID-19 situation did not invent this focus, it simply sharpened it and increased the urgency for enterprises to make the transition from “react and respond” to “rebound and reimagine.”
Our State of IT Infrastructure report shows how IT aligns to the changes that various stakeholders will encounter as they emerge from the pandemic:
Leveraging the Cloud for the Future of Retail
Although the trends above are unique, cloud technologies enable them all. Wipro’s Cloud Practice has developed several solutions that respond to the trends above and are designed to meet retailers’ unique needs.
Cloud provides the advantage to innovate with low investment and converts CAPEX to OPEX while keeping overall TCO low. Many enterprises are reducing operational expenses to self-fund digital transformation. This requires embracing cloud-native digital platform strategies by advanced monitoring and logging, and gaining the ability to self-heal through automation and autonomous cloud capabilities, thereby reducing the cost of operation.
Wipro’s end-to-end transformation offering, Cloud Studio, helps enterprises embark upon their cloud journey to reduce the total cost of ownership. Autonomous cloud management by Wipro helps monitor and manage the cloud instances to further optimize the cloud spending.
Reimagining the Customer Experience
Retailers are continuing to invest in digital channel engagement and personalization across the customer lifecycle. To address the growing need to scale, cloud-based AI/ML, AR/VR, IOT and digital contact centers play key role in innovation.
Customers are embracing AR/VR-based “try and buy” models. Creating an AI/ML-based 360-degree view with various customer channel touch points, searches, chats, and purchase history with contextual data insights enables retailers to cross-sell or upsell products and services.
2020 saw the emergence of IOT niche services, as companies like Best Buy shifted their focus on selling IOT devices and Geek Squad resources began specializing in the smart home/ IOT area. This has led to Best Buy’s transformation from an electronics retailer to a smart home consultant with technologies that empower customers who care for elderly parents.
Designit and Rational Interaction can help customers reimagine the customer experience both online and offline. We augment this expertise with Google’s ability to provide insights with data, integrating data silos and solving complex analytics challenges with a modern data warehouse. This powerful combination provides unique new experiences that are personalized and delivered seamlessly across channels.
As an example, Wipro can help retailers implement Google’s next-gen AI/ML solution “mystyle,” which helps shoppers discover apparel from a video and get a personalized recommendation, or its “fresh grocery experience,” which enables the system to detect the item and the weight to accelerate service for the shopper.
Supply Chain Overhaul
Cloud technologies can help create a robust and resilient supply chain by introducing visibility and transparency via blockchain, IoT and cognitive solutions. IoT combined with analytics can improve tracking and shipment prioritization, while blockchain can keep counterfeit products at bay. Meanwhile, applications built on cloud-native principles can help retailers handle and process in real-time the huge amount of data generated at a hyper-scale capacity.
Wipro’s supply-chain solutions using Google Cloud Native services help retailers better predict and plan inventories and improve product availability and costs by simplification and identification of alternate sourcing. For many retailers, operational data is managed through SAP systems. Moving this to the cloud can provide operational efficiency and inventory optimization through AI/ML. In addition, Google’s “Cold Chain” solutions based on IoT and blockchain, and its “Smart Corrective Actions,” can manage unplanned operational events in the warehouse.
Contact Centers of the Future
With the increase in online demand and call volumes, the number of product and service inquiries has increased exponentially. Traditional on-premise contact centers are unable to handle this surge, placing greater importance on AI-supported digitally optimized centers with cloud-based communication.
Also, retailers need an omni-channel customer experience, as they no longer can afford a channel-siloed digital presence. Continuous customer engagement and increasing customer lifetime value through cloud-based contact centers is need of the hour. Conversational AI helps to improve post-sales service using digital deflection automation/bots, speeding-up resolution and thereby improving customer satisfaction.
Wipro helps retailers integrate unique Google CCAI with popular contact centers to empower them with omni-channel, AI-enabled solutions that can improve both the customer experience and operational efficiency.
Wipro Cloud Studio can support retailers’ custom application development leveraging Google Cloud Native services, providing rapid time to market and smaller release cycles. These applications are scalable, resilient and robust enough to handle any spike in the demand, whether it be holiday shoppers, a crisis or any other event. Alternatively, a short-term solution is containerizing these applications using ANTHOS, GKE and then orchestrate them using Boundary Less Container Platform.
Cloud technologies can help in the overall integration process during M&A by providing a standardized Cloud Native Digital platform that unifies the technologies of the merged entities. In addition, SaaS can provide an easy setup and run solution for business functions that were previously run on custom platforms and/or were hard to operate.
Wipro’s own experience can help retailers seamlessly integrate acquired or merged companies and create synergy. In addition, Google’s workforce tools (e.g. GSuite, Google Drive) can help assemble all employees on a single platform to collaborate seamlessly. Wipro’s Cloud Studio (THRIVE) enables retailers to implement these tools on a subscription basis and is consistently rated highly by Google for its effectiveness.
As the retail sector looks forward with a cloud-tinted lens, Wipro can help companies leverage the power of Google technologies and platforms to achieve their vision of success. The cloud was already destined to be integral to the future of retail. Moving through and beyond the pandemic, it’s simply become a critical component of all retailers’ future.