Should retail still be nervous about the cloud?
A survey of from IHL Group shows that retailers plan to spend 34 percent of their software budgets on the cloud in 2017, up from 26 percent in 2016.
Speaking at a breakfast panel at the 2017 National Retail Federation Big Show, Jeff Roster, VP of strategy at IHL, asserted retailers need to leverage the cloud’s speed, scalability and flexibility to catch up to Amazon.com. According to BizTech, he said, “You are either at the table of unified commerce or you’re on the menu.”
Connecting e-commerce, point-of-sale (POS), order management, fulfillment and inventory management at a single source, the cloud is expected to help retailers deliver a seamless and personalized experience for shoppers on mobile devices. Fast access to real-time data can also help in areas such as product development and inventory management.
Yet retailers have been hesitant to capitalize on the cloud. A primary reason is it appears to work best as a software as a service (SaaS) model and IT departments are reluctant to abandon their earth-bound infrastructure.
In 2014, Accenture noted in a report that established brick-and-mortar retailers had been slow to embrace the cloud over fears that they may disrupt their core systems — particularly POS. Moreover, with core systems seen as differentiators, cloud software was often being written in-house, which was leading to significant expenses tied up in technology maintenance and upgrades.
Accenture still felt at the time that increasing demands from consumers would lead retailers to make a leap to an “era of cloud computing in which applications are distributed across the local data center, a cloud provider and the datacenters and cloud providers of a retailer’s trading partners.”
While cloud computing has received more attention over the last two years, costs, security and agility are some concerns when working with a remote partner. SPS Commerce’s new report, “Retail Insight: Moving Beyond Omnichannel,” also still finds legacy systems are the top factor hindering omnichannel execution. Of the retailers surveyed as part of the report, 29 percent named legacy systems as their top obstacle.
- NRF’s BIG Show 2017: Retailers Must Invest in Tech to Effectively Compete – BizTech
- A New Era for Retail Cloud Computing Changes the Game – Accenture
- Retail Moving Beyond Omnichannel as Consumers Demand Personalized Shopping Experiences across Channels – SPS Commerce
- Retail Insight: Moving Beyond Omnichannel. – SPS Commerce
- Join the cloud crowd: Three key reasons why retailers should adopt cloud computing – Internet Retailing
- 3 Ways Cloud Computing Is Revolutionizing the Retail Industry – CIO.com
- Amazon Web Services vs. Google Cloud Platform vs. Microsoft Azure – Clutch
DISCUSSION QUESTIONS: Should retailers still have concerns about switching from legacy IT systems to a SaaS-supported cloud operating platform? What obvious and less obvious challenges have you seen encountered by retailers making the shift?