Cloud Retail! Bringing Back High Street with Tech

By Fujitsu Malaysia

Advancing IT models empower traditional retailers gain business agility, increase sales and reduce costs

The health of the high street retail is important for the well-being of an urban community as shopping is probably one of the few opportunities left for social interaction in our increasingly atomised lives. Besides that, retail remains a significant source of employment and economic sector.

However, given the strong growth of eCommerce and the migration of social interaction onto the online space, high street and physical store merchants face greater challenges in competing with the ‘lightweight-ness’ of their online retail competitors.

Nonetheless even with their narrowing margins, high street and the shopping centres are not going to become extinct anytime soon. So in order to continue tapping on revenues from their faithful clientele, the biggest challenge is to continue their legacy of great service.

One click, one truck
E-commerce behemoths like Amazon have pioneered to make their dispatch and returns processes run smoothly at high volume. But from the customer’s point of view, delivery remains a complex and haphazard issue. The e-retailer may have an efficient one-to-many supply model, but the customer may continue to face a fragmented many-to-one reception problem as well.

For instance, householders can book the times of their grocery home deliveries, but they have no control over the arrival times of packages delivered by the major carriers. In most cases, they don’t know which carrier will be delivering which order from which e-retailer.

From a broader environmental position, it can’t be right that the consumer’s single trip to a nearby department store is being replaced by multiple delivery visits from vans and trucks. Hence, a degree of trip ‘sharing’ would be very helpful in cutting carbon emissions while accelerating receipt time.

Fujitsu believes virtual logistics hubs formed by groups of delivery companies on a regional basis must emerge— whereby retailers can enjoy flexible delivery mechanisms. The retailer assemble all of their highly complex delivery loads and place their delivery consignments on a market populated by approved courier firms, in an effort to minimise the number of deliveries made to often hard-to-access sites.

An example is how hospitals demand pre-aggregated delivery bundles from their various suppliers so that they only have to deal with one incoming truck every day. There’s no technological reason why retailers can’t band together to share this kind of backend activity. Soon, ordinary consumers will demand “one click, one truck”.


Touch and go
 No doubt that physical store retailer cannot fully replicate their existing shopping experience onto a virtual equivalent. Often, the search for the perfect, immersive online experience has been largely shelved in favour of clear, reliable and secure functionality. In fact, the best online players have only been able to serve consumers ‘using’ rich product and service information and customer recommendations.

So while online shopping cannot provide the real feel of a sweater to a customer, it can still give a lot of information about the sweater’s description, quality and price. At the other corner, physical stores need to face up to this challenge of upgrading their shoppers’ knowledge of their products and services, while enhancing the ability to make consultative sales.

Handheld devices a solution by arming the shop staff with these extra information, to better interact with customers as they explore what’s on offer together at the store to maximise sales opportunities and improve customer satisfaction at the same time.

Online consumers have become used to being welcomed back when they visit e-retailers. They trust e-retailers with their contact and credit card details, and they respond positively to buying suggestions based on their purchase history. For this, the physical store can resort to subtle ways to reconnect with their customers at the store as well – for example via the customers’ loyalty card which is used at a kiosk to check for points balance, or use their mobile phones to scan in-store barcodes making their presence known to the store systems – that then can access the shoppers’ history and preferences and make sales offers on the spot.

Space age
Today, consumers are spoilt with the option of buying anything from any online channel anytime. So, physical retail sites need to provide customers more reasons to shop than the traditional price, place and product. As the main retaining strategy is on the factor of physical store’s ‘place’, many retailers with online-only legacies are now starting to open physical stores as well.

Online shopping involves more research, comparison and commitment by the shopper. On the other hand, today’s real surfers in physical stores rarely have a fixed idea of exactly what they’re going to buy, from whom, or for how much.  Shopping online is work, but physical shopping is a leisure activity.

With technology freeing up staff and helping them to be more knowledgeable, service becomes more personal – bringing the retail environment to life and putting the customer at its heart.

A break in the cloud
Whether online or physical, all retailers today require more computing capacity as and when they need it instead of running applications on dedicated systems.

Aside from agility, there are a few key initial benefits that retailers can enjoy by exploiting the ‘Cloud Computing’ model. Firstly, they can restructure their financing. Traditionally, retailers require to commit a large capital investment upfront for the development of new IT infrastructures and capabilities.

Second, business function capabilities procured this way can often cost less while being of comparable or superior quality. In the past, companies had to buy and customise solutions for business functions that were often largely generic. The third immediate benefit is Cloud computing removes the management headaches of application maintenance, version control, backup and recovery, and so on.

Clearly, these benefits are most often associated with functions that don’t meaningfully differentiate the business, and where savings are easy to identify. But the cloud model also has a role to play in retail business growth through differentiation. In many ways, this is the most exciting implication of the technology.

Retail thrives on experimentation. The retail environment evolves as managers try new approaches to product lines, merchandising, layout, offers, branding and more. Every feature of the retail landscape is continually open to revision. Technology has too often constrained experimentation, but now it can be an enabler instead.

The instant access to unlimited computing resources offered by the cloud model enables retailers to respond to peak periods without investing in long-term capacity. Retailers no longer have to scale their processing requirements to the expected transaction volumes of the busiest seasons, thereby reducing their costs without compromising their ability to trade.

Once switched to the cloud model, the retailers are free to expand the business, contract or reconfigure it at will. Entering a new geography requires no new planning, procurement or installation of IT. The cloud also offers possibilities for experimenting with store formats and sites, allowing the retailers to open short-life outlets around important events.

There is no plain sailing for retailers exploring the cloud model, and they need to understand which parts of the business can bring the most benefit from a move into the cloud, and what new risks and constraints that to prepare for.

The challenge from online ecommerce, in the form of external competition and internal cannibalization, has sharpened the perception that IT could also be a disruptive force on retail industry. IT is poised to transform the high street by refashioning the economics of physical retail to compete with and complement other channels, upgrading store staff to professional knowledge worker status, inventing new in-store experiences, and dissolving the constraints on experimentation.

No doubt that if managed right, technology can help kick-start a new era for retail.