How do clouds help retailers?
Analytics
Competitive pricing is one of the keys to a retailer’s success. This requires the business to analyse demand, the offers of its competitors, the sales history and the profit margin. This set of data helps a company adapt to the current conditions on the market and find opportunities to increase revenue. Time is a vital aspect for analytics: by the time you finish processing data manually, the situation will likely change many times over.
Fortunately, this tasked is solved by corporate Price Intelligence software: retailers who use this tool get real-time analytics and build their competitive pricing strategy based on data received today rather than last month. Some vendors also offer automatic repricing tools, which help react to current conditions even quicker.
The cloud is an efficient environment for these tools thanks to its technological features. It’s easy to set up interaction between analytical software and data sources like the CRM system and the company’s website within one cloud. Besides, the volume of data that needs to processed is never stable; cloud platforms are easy to scale up so that the computing power matches the load.
Resource management
Retail is a demanding industry in terms of resource management. A company has to keep track of its stock in the warehouses, analyse the efficiency of deliveries and logistics as a whole, monitor customer relations, manage finances and personnel. All of these vital tasks depend on the company’s computing platform.
Considering the huge volume of data retailers have to work with, automation using ERP and CRM systems is an inevitability. Meanwhile, traditional server infrastructure for this kind of software is easy to outgrow. Our client, the D.S. pharmacy chain, was forced to switch providers several times before reaching out to SIM-Networks: most hosting solutions couldn’t handle the company’s vast catalogue. We succeeded in creating a server infrastructure that covered the client’s needs at the time; however, as the company grew, their next step was to migrate to our cloud.
A company’s growth is a vital factor along with the volume of resource-related data that needs to be processed at a given time. In the case of traditional server infrastructure, you need to buy or rent new servers as your business develops. This takes time and the investment isn’t always justified. On the contrary, scaling in the cloud practically has no upper limit, and creating a new instance with any configuration takes no more than a couple of minutes.
Seasonal loads
Winter jackets, bathing suits, pens and notebooks, Christmas decorations: retailers often have to deal with seasonal demand. This factor is important for retailers who sell a wide range of goods; however, if you exclusively sell school supplies, seasonal loads are even more integral to your business.
Working with seasonal items puts an additional strain on the company’s IT systems. The retailer has to prepare logistics and make sure the stock can cover the demand: this requires additional resources for your ERP. In addition, an influx of traffic in your online store could overload the server and prevent customers from accessing your store when demand is highest.
With server infrastructure, you are often forced to overpay for machines that aren’t being used outside of peak load periods. Here’s an even more inconvenient way to handle this issue: rent additional servers before the season starts, integrate them into your exisiting infrastructure, and give them up in a month once the season is over. The solution offered by clouds is much simpler: add more resources within a couple of minutes and turn them off when you don’t need them. The price will be adjusted accordingly, and the whole process takes just a couple of clicks in the control panel.
Data protection
Working in online retail means working with your customer’s confidential data. Names, home addresses and payment data may end up in the wrong hands if the IT infrastructure is not protected by a range of physical and software-based measures. You won’t have a hard time finding an example of such an incident: it always hurts the clients and damages the company’s reputation.
Cloud solutions, including public clouds, offer a high level of corporate data protection. This comes from measures such as distributed data storage, hardware-based encryption, user access levels, and the conditions of the data center itself. For example, SIM-Networks' data centers are certified according to the ISO/IEC 27001 international data security standard (read more about ISO 27001). Any company that wants to meet the requirements of this standard in their own local data center will have to make huge investments: for most businesses, this is unreasonable.
Private clouds are popular way to improve data protection. Unlike the public cloud, this kind of infrastructure is only used by one client. This way, the equipment is physically isolated from other users’ data. Additionally, the exclusive right to use the platform give you more freedom in implementing personalized security measures. Private clouds are often used by medical establishments and banks: these industries are even more demanding in terms of data protection.
Stability and fault tolerance
Hardware failures are one of the most significant financial risks that come from IT infrastructure. For a retailer, this means lost profits due to customers not being able to access the store’s website. Moreover, we have already listed the range of data this kind of business needs to work efficiently. Its loss will do considerable damage to the company, and dealing with the consequences will drain time and resources.
The cloud is a system made up of many servers, where the data is spread between multiple machines. If 1 or more servers fail, the tasks they were running won’t be affected: the instance will be automatically recreated using alternate resources. In the case of the SIM-Networks cloud, a server can only fail if 3 separate components (i.e. the main SSD, the parallel SSD and the backup SSD) happen to fail at the same time. Clouds often come with automatic reserve copying services as well.
If fault tolerance is a key factor for a retailer, they can use multiple availability zones, meaning physically isolated segments of a single cloud. Fault tolerance can also be significantly increased by using hybrid infrastructure, a system of multiple clouds. This solution should only be chosen based on a set of factors: consider whether you need to separate stable and dynamic loads, or store confidential data separately from less sensitive information.
