Cloud computing revs up retail

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Over the years, consumers have adopted new modes of shopping. An increasing number tend to leverage the power of mobile, social and e-commerce solutions to realize their needs. This means that traditional brick-and-mortar businesses must understand and harness the benefits of new and emerging technologies to ensure that they continuously deliver an uninterrupted and best-in-class services experience regardless of how customers prefer to shop—in store, on a phone or on the web. Globally, businesses are known to rely on cloud computing to be a step ahead of customers when it comes to leveraging technology to deliver services.

Cloud computing opens up a new paradigm when it comes to the use of data and how companies can take advantage of their hardware. In a cloud, a single server can host many virtual servers, reducing hardware costs. Depending on the need for computer capacity, virtual servers can scale as needed. For retailers whose businesses are seasonal, this can be extremely useful. They can expand capacity to ensure they have the bandwidth to support holiday shopping and quickly scale back for lighter shopping days. Growth in cloud services is driven by new IT computing scenarios being deployed using cloud models, as well as the migration of traditional IT services to cloud service alternatives, as noted by Gartner in a press release.

(Related: Infographic: Embracing SaaS in retail & merchandising)

A recent IBM announcement pointed out that organizations gaining competitive advantage through high cloud adoption are reporting almost double the revenue growth and nearly 2.5 times higher gross profit growth than peer companies that are more cautious about cloud computing. IBM conducted a survey with more than 800 business decision makers and users worldwide. IBM’s survey also revealed that the cloud’s strategic importance to decision-makers, such as CEOs, CMOs, finance, HR and procurement executives, is poised to double from 34 percent to 72 percent—vaulting over their IT counterparts at 58 percent.

In order to compete with online retailers, traditional retailers are taking advantage of social networking tools to learn what customers are saying about them and about their competitors. Other data like weather conditions are being used to influence product purchasing decisions; merchandise promotions are organized around social events. Brick-and-mortar retailers are even unearthing sources of data. Some companies are tracking movement of customers within stores and analyzing how many stop at end-cap displays to improve the effectiveness of merchandising. Clouds offer retailers a way to explore the potential of big data analytics to understand their customers better.

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