Many of us feel the same way: We love shopping at places like Nordstrom and appreciate their impeccable collections of stylish fashion. But more and more we are buying anything and everything online, including latest fashion. Yes, we know, we are feeding ever larger companies like Amazon Marketplace, but how can you beat their assortment, convenience and the might they have built? Slice Intelligence looked at 2016 holiday sales and shows Amazon taking a whopping 36.9% share of total sales with Nordstrom taking 2.2%, down from 2.5% last year. And even Walmart lost, closing 2016 holiday sales at 2.7%, down from 3.1% in 2015. - Slice talks about "A new digital divide".
Countless articles have been written about how retail companies – especially the brick and mortars – now need to deliver “outcomes” and “positive experiences” through “real-time brand engagement” in a “digital economy.” But what does that really mean and how can a retailer with shrinking sales and the generally razor slim retail revenue margins fund and execute a digital transformation?Let's take an imaginary retailer called ShopMore and assume they have done their homework and have a comprehensive retail transformation plan outlined. Many ShopMore leaders are excited, but others point to the risk and problems experienced in past transformations:
I think most of us will agree that we have experienced each of these concerns in our own past projects before, and often not just once. - But despite these concerns by several ShopMore senior managers, the company decides they have no choice but to kick-off their digital transformation project.
Based on the business urgency and risk, ShopMore IT and business leaders agree to challenge the status quo so they can avoid the above pit falls of the traditional "Build-to-Order" IT world. As much as available, off the shelf components will be used in an "Assemble-to-Order" approach for the final ShopMore solution. This will give them the follow advantages:
The following two building blocks cover a large portion of the project scope and ShopMore plans to procure them as "assemblies" or in common IT lingo "as-a-Service":
ShopMore is also looking at Container technology and cloud orchestration, adding real-time system agility and scalability to ShopMore's big data workloads. - I will write about this in a later blog.
With multi-channel marketing solutions like SAP Hybris you can keep all your distribution channels in sync. While often focused on new media, ideally it links both the online and physical world together. Here are a few examples to explain:
Retail businesses have demanding IT system requirements driven by business seasonality, frequent introduction of new inventory, out of stock situations and most importantly the unpredictability of the online and in-store customer patterns. Imagine Black Friday or Christmas with its flood of online transactions. Having to provision on-premise infrastructure for these peaks would require a significant investment with idling capacity for the majority of the year.Leveraging elastic public cloud for this allows a retailer to always adjust with business patterns. Or imagine the ability to adjust system availability for Black Friday by provisioning a high availability cluster at the push of a button and stopping such a cluster when online and in-store traffic goes down again and the risk and cost of a system failure is significantly reduced. Public cloud, when used in a cloud native fashion, configured and automated accordingly can deliver all of this at the push of a button. But be warned, Alan R. Earls on TechTarget states, "[Cloud] redundancy, DR set up [is] no piece of cake."
Fast Forward ... Ocean9 and our valued partner Apcera, a company focusing on hybrid cloud orchestration and container technology are collaborating to deliver the solution that ShopMore is aiming to implement. It consists of a containerized SAP Hybris application running on top of a containerized SAP HANA database tier. This showcase is based on work with a mutual customer in the retail business enabling multi-channel marketing. The customer goals are:
We will be highlighting this showcase at Container World 2017 in Santa Clara this week.
Business and technology is evolving at lightning speed. Some companies are able to take full advantage of it, some others are struggling to keep up.Trying to succeed in such a competitive business environment by using the same IT tools and methods as 5 or 10 years ago may not be the right answer, especially when the leaders like Amazon have reinvented the industry and set standards for online retail and business solutions using big data and being powered by sophisticated public cloud Infrastructure-as-a-Service. Public cloud is becoming more and more powerful by the day. Both Azure and AWS now offer around 100 distinct cloud services to their customers. More are being added frequently. While I covered a lot of ground in this blog, it is only the beginning of many blogs we plan to write on this and similar topics, so stay tuned. With the first iteration, I wanted to alert you to the abilities and opportunities provided by public cloud for challenging workloads and business like retail. And while every business is different in its details, key concepts of seasonality, elasticity, on-demand consumption apply to all business and industries equally.I would love to hear your thoughts. Thanks for leaving your comments below. Please also download our whitepaper that dives deeper into the topic of transforming a retailer to compete in our digital world.
Please let me know your thoughts and comments about this blog below! - Where does your company stand in getting over the "New digital divide"?
Also, please download our easy to read whitepaper outlining the digital transformation journey of a brick and mortar retail company. While the example is retail, the ideas and thoughts in it are applicable to any company,
Download now: WHITEPAPER - Digital Transformation in Retail