Innovative “bricks and mortar” retailers are investing in building a totally integrated customer experience – one that mixes in-store with on-line purchasing to redefine the client journey. This omnichannel approach requires the seamless integration of the customer journey across all platforms, including social, mobile and physical, which in turn requires the existence of new instore IT functionality that is capable of supporting this mission.
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Retailers are moving in this direction in response to customer demand. Omnichannel customers spend 3.5 times more than other shoppers, while 84 percent of customers believe that retailers should be doing more to integrate their online and offline channels.
The key differentiator that physical retailers have in achieving this strategy is their branch network, and in-store IT capability is the foundation on which the strategy must be built. In this model, in-store IT, when integrated with on-line and mobile customer touchpoints, becomes a strategic asset.
But for many experienced retail professionals, the idea of viewing retail branch IT as a key strategic asset may seem a contradiction in terms. Historically, branch IT has been seen as a brake on the business, at best costing a disproportionate amount of time and effort to manage, and at worst restricting the ability of the company to implement innovative customer engagement strategies. But there is a growing realisation that the branch network must be better integrated into the IT estate so that it can be better used to optimise the customer journey and leverage brand equity. Investment is required to achieve this, but, given the margin pressures of this sector, it must be delivered in a cost-effective manner.
Retailers face a challenge to deliver a coherent digital strategy that encompasses omnichannel retailing. This requires a complete alignment of retail systems to serve customers across all channels in all locations, including in-store in real time.
New retail omnichannel strategies cannot be supported by old in-store IT solutions. They require a new type of in-store infrastructure that is able to support new, advanced applications running across multiple device types, with real-time analytics and secure local storage for the masses of data such applications produce . And they must be integrated with the cloud and support consolidated network functionality including firewalls, routers and WAN optimisation.
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The first and natural reaction of many retail professionals when contemplating new branch IT requirements is to wonder how on earth they are going to support such advanced functionality, distributed across multiple sites, without any local support resource. Branches already present a disproportionate IT support challenge, and the thought of moving from today’s simple branch IT to the virtualised, hyper-converged infrastructure required for advanced in-store applications is worrying indeed.
These concerns have lead many retailers to operate a cloud-first strategy, which affords many benefits, including a reduced emphasis on infrastructure and a greater focus on application and business process. However, a cloud-first strategy is not a cloud-only strategy. Many of the new and innovative applications (as well as most legacy ones) require IT infrastructure on the remote site.
The challenge is to deliver state-of-the-art, often complex and usually dynamic IT to remote sites, centrally and efficiently managed, without the need for expensive on-site expertise, or without over-taxing already stretched centralised IT resources. And this requires a redefinition of the role of the local server
Fortunately, new developments and trends in cloud managed hybrid IT have created a new opportunity for retailers and CIOs to transform retail branch IT into an asset rather than a burden. Two major and interconnected developments — hybrid cloud and hyper-convergence — are allowing us to redefine servers in a way that meets the needs of advanced in-store IT capability without the advanced local IT skills.
With cloud managed servers, capacity can be put back in-store at a low cost with a high SLA. By using cloud managed servers based on a hyper-converged software platform, organisations can obtain their own flexible cloud in-store without compromise. When combined with a cloud-first strategy, this provides an excellent base for running the business and experimenting with new applications to enhance the customer experience
Cloud managed servers control all the infrastructure of the server, including hardware, firmware, virtualisation and management. They manage compliance, security and are kept current 24/7. They take responsibility for cloud service integration, backup and disaster recovery.
Cloud managed servers deliver packaged IT functionality, which can be run in any branch, regardless of local IT support skills or the resilience of local network connectivity. They are the ideal solution to the needs of the store network, in as much as they allow a flexible IT strategy with applications being placed where they deliver the most benefit, and support resources optimised across the whole distributed organisation.
They provide the capability to quickly implement and maintain a consistent technology platform for all locations and businesses, with a single set of data, and the support best practices that arise from operating on a single repeatable technology stack. And hyper-converged cloud managed servers are resilient by design because they support scale-out architectures with automated failover in the event of hardware faults.
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In effect, cloud managed servers provide an advanced in-store infrastructure which can be integrated with the retailer’s on-line presence to deliver a multi-channel customer experience. This can be achieved without complexity and the need for in-store branch expertise, or regular and costly site visits from the central IT function
The fundamental shift in cost-effective, high-functionality, in-store IT delivered by cloud managed servers is a game-changer in the world of the omnichannel customer experience. They offer new opportunities for retail CIO’s to provide advanced branch application capability, integrated with on-line and cloud-based channels, and a less complex IT infrastructure without the need for extensive distributed IT expertise.
Zynstra will shortly be holding a breakfast event in central London dedicated to this topic, hosted by retail expert and consumer champion, Clare Rayner.