Authored by: Gene Tang, Head of Professional Services and Onboarding Delivery, APJ, Rackspace
The rise of the digital economy is transforming Malaysian society, and the retail sector is poised to benefit from the technologies emerging to support new online channels and customer behaviors. For retailers, the future lies in omnichannel strategies that integrate the brand's approach to customers across physical stores, online and mobile for an improved customer experience. Research has found that Malaysia has been a leading force in ecommerce and is one of the most attractive and matured markets in the region, valued at USD1.3billion. However, these strategies will not be successful without cloud-based applications and infrastructure.
The cloud offers several fantastic advantages, and also carries a number of hefty technology challenges that incumbent retail brands must overcome if they are to succeed. For these businesses, identifying where to add or change channels and applications is a constant challenge. A fine balance must be struck between maintaining revenues for today and having an eye on the future. For this reason, when retailers consider an ecommerce platform addition or upgrade it is vital to determine the services that make sense to migrate to the cloud. There is no clear-cut answer here, but several important motivators to consider. While a strong customer interface is crucial, true success also extends to the streamlined management of logistics, stock, staff, and management processes. The cloud may be for everyone, but it is not for everything. Retailers must understand where the cloud can really add value to the organisation before making any change.
The Shake Up of the Retail Market
Technology has redefined the service industry giving birth to a new generation of brands that use it as a weapon to expand quickly and cheaply. The cloud has transformed how businesses grow and change with its ability to morph with the business dynamically, rather than serving a fixed need for a set amount of time like many legacy systems. Retailers of all sizes with a brick and mortar heritage have seen operations become more complex with this rise of “born in the cloud” retail organisations over the last decade. Surviving has quickly become a game of sink or swim. Without the advantage of technology in their DNA, many of these traditional retailers have seen growth shrink or their businesses fold under the pressure.
There are two types of businesses that can thrive in the current environment. The first are the large, quick service companies that can turn around stock from concept to storefront in a matter of weeks. These businesses have a global footprint in every major shopping centre. They operate and grow swiftly, thanks to their well-established supply chain network and global contracts. The second type includes agile aggregators that exist purely in the online space. They can limit their physical margins and invest more into improving customer experiences. As facilitators, these retailers can streamline orders and keep stock moving, all while providing easy, fast and reliable service to consumers.
Both business types have achieved economies of scale because they have embraced agility in underlying infrastructure and systems through the cloud early on. They also look to where cloud can provide real value by deploying smart IT strategies that extend beyond the website to optimisation of logistics, stock management, point-of-sale, and customer interactions. Regardless of your organisation's attitude towards cloud technology, there will come a time in the near future to decide how important it is to keep up with the industry’s movers and shakers.
What is the Goal of Cloud Migration?
Before making any decision to migrate to the cloud or expand cloud capabilities, businesses must establish clear objectives. Then begin testing with safe workloads and grow from there. It is not necessary to go “all-in” on cloud or replace all legacy systems immediately. Organisations should also keep these six factors in mind during the process.
1. Business Agility and flexibility: While cost is an important factor, it should not be the only driver because it is not guaranteed. Achieving the agility and flexibility to grow and innovate must be at the heart of the business' thinking.
2. Team efficiency: Innovative ideas may help retailers reach new audiences, but IT teams need the time and tools to help bring that vision to life. Too often these teams are weighed down with keeping sites and systems running and managing administrative tasks, rather than coming up with solutions to improve supply flows or better engage customers. IT teams need to have time to think creatively and explore new ideas.
3. Logistical insights: Consumer expectations have changed. We now exist in a society where information is available at our fingertips, and as a result, we expect products to be as well. A cloud strategy that supports retailers' logistical operations may help the organisation be more flexible and transparent in meeting consumer demands.
4. Smarter planning: Cloud gives organisations the ability to automatically and cost-effectively scale operation for peak seasons, promotions and shopping events. Retailers also gain the ability to digest and analyse significant amounts of customer data quickly, which may open up new growth channels for the business.
5. Real-time insights: Cloud allows even the most complex organisations to operate in real time, so there is never a question about the location of a shipment on the delivery journey.
6. Improved security: Early concerns about the security of the cloud have dissipated so that today a strong security offering goes hand-in-hand with a reputable cloud provider. This is critical in guaranteeing that customer data will be protected.
Retailers in Malaysia considering the first steps in migrating to the cloud should consult with an agnostic, unbiased partner to ensure there is no pressure to fit their business needs into a particular cloud platform as well as overcome technological and cultural hurdles. Remember, the point of investing in new technology is to enable internal teams to be more agile, innovative and reliable to create better customer experiences.