How retailers are adopting cloud computing

If you’re like most people, you buy more from e-commerce sites than you did ten years ago. And if brick-and-mortar stores haven’t yet bit the dust, they’ve probably felt the pinch. In this post, we’ll examine how retailers are leveraging cloud computing technology to regain a competitive edge – and what that means for enterprise businesses.

Retail Lags in Technology Spending

The retail industry only allocates about 1.7% of revenue to IT. The banking industry, on the other hand, spends about 6%. Brick-and-mortar retailers have been more apt to make investments in advertising and design over back-office IT. But with e-commerce competitors using technology to win the price and selection battle, traditional retailers are beginning to invest more heavily in technology — specifically, cloud computing.

Enhancing Web-to-Store

According to survey data, a large amount of consumers are dissatisfied with the growing web-to-store trend. Too often, consumers are finding that when they shop online and purchase in-store, the product isn’t available for pickup.

With cloud computing, inventory records are more visible and reliable. Brands with accurate inventory management can cater to consumers looking to combine the convenience of online shopping with the same-day fulfillment advantage of traditional retail.

Walgreens has recently made major inroads on the cloud computing front with rapid adoption of its mobile app. Customers can use the app to reorder prescriptions by simply scanning the bottle, which also reduces processing errors. The app helps customers stay on top of their needs with features like renewal alerts, prescription histories, and the ability to check in-store availability per location.

Battling “Showrooming” with Cloud Computing

Shoppers with a mobile web browser in hand have been exercising their leverage for years.  These mobile shoppers use store aisles as their showroom, and then either browse online retailers for a better price or use specific apps designed to do comparison shopping for them. In most cases, the consumer and the e-commerce site win, and the retailer with large overhead costs loses.

Some retailers are more vulnerable to online comparison shopping than others. Grocers might not be afraid of losing candy bar or gum pack sales, but large technology retailers are extremely vulnerable – and have only recently learned how to combat it.

Cloud computing offers a way for traditional retailers to fight back with some of e-commerce’s biggest assets. Big data has helped brick-and-mortar retailers determine which items are most susceptible to comparison shopping, while also providing continuous insight into competitive pricing practices.

Large retailers like Best Buy, once harshly affected by showrooming, can now leverage economies of scale and a large marketing budget to offer price matching on all competitive offers. But for other mid-tier and one-location retailers, the use of cloud computing technology to create an advantage often requires a bit more creativity.

Location, Location, Location

Location technology has proven to be a crucial tool for traditional retailers. Merchants can now push relevant offers out to a consumer when they are near a store using GPS, near-field communication, and other location-based technologies. Popular geo-location app Shopkick, for example, rewards users with virtual currency just for checking in at selected retailers.

In addition to location-based advantages, customer loyalty programs now leverage cloud computing and big data to pull information from enterprise software and social data streams.  The result is personalized messaging and offers that decrease the likelihood of showrooming, and increase the customer’s lifetime value to the retailer.

The brand value of today’s retailer is largely determined by how they can satisfy tech-savvy shoppers, and those who use cloud computing to pass on value to the consumer have a decided advantage over those who don’t.

Have you used any mobile cloud-based applications? Let us know in the comments!

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Dennis Smith

Dennis Smith

Dell Contributor at Tech Page One
Dennis is the networking and storage evangelist for DellTechCenter.com. He also manages the Dell TechCenter social accounts; click on the tabs above to be connected to them. Dennis has also been recognized as aVMware vExpert.
Dennis Smith
Dennis Smith
Dennis Smith
Dennis Smith
Tags: Cloud Computing,Technology