How the cloud is supporting retailers in the age of Black Friday
Enabling the industry to meet new challenges head-on
Anyone who’s worked in retail will tell you that it’s often far from easy. That doesn’t just apply to those on the shop floor, though – running a retail business can present a range of challenges for those working behind the scenes, too. It’s an incredibly fast-moving industry, with myriad shifting patterns that can see customers ebb and flow on an almost daily basis.
In such a fluid sector, the demands on IT departments are high. For ecommerce businesses, infrastructure has to be stable, performant and available at all times, and user experience is of the utmost importance. This can be a tough balancing act, particularly for organisations that only have a limited technical workforce, and these pressures have driven many companies into the cloud.
Over the last decade, the world has been increasingly shifting towards online shopping. In fact, according to figures from Statista, global ecommerce sales have grown by more than 200% since 2014 and are projected to surpass $600 trillion by 2024. That growth in demand has driven a vast proliferation of channels, moving from desktop websites to mobile sites, dedicated apps and even social media storefronts – all of which require time, talent and resources to maintain.
Online shopping has also sharpened the effects of seasonal peaks and troughs. Alongside traditionally busy periods like Christmas, Summer and Easter, increasing globalisation has added new entries to the retail calendar, including Black Friday and Cyber Monday. As shoppers eagerly flock to their favourite store pages in search of bargains, the infrastructure behind them has to cope with a sudden influx of traffic which can be orders of magnitude higher than the normal average.
As if that wasn’t enough, the pandemic threw further complications into the path of retailers with national lockdowns and stay-at-home orders. Almost overnight, businesses were forced to transition to a fully digital business model, and the legions of people easing the boredom of being stuck at home by shopping online caused problems even for digitally native organisations.
The consequence of all of this is that ecommerce businesses have had to undergo a rapid transformation in order to make sure their infrastructure is flexible, scalable and responsive enough to support these trends. Cloud technologies have been instrumental in this; when traffic to an online storefront spikes, more infrastructure capacity is needed to ensure that visitors aren’t put off by poor performance and long load times. However, in an on-premises environment, adding more capacity means installing and spinning up more physical appliances.
A cloud-based model, on the other hand, allows extra capacity to be quickly and easily added as it becomes necessary, and because it’s charged on a consumption basis, you can turn it off again once the spike passes. Content delivery networks (CDNs) such as G-Core Labs’ can be particularly helpful here, automatically performing load-balancing duties to ensure that traffic is spread out over as many servers as necessary in order to ensure stable performance. This scalability and elasticity makes cloud infrastructure like G-Core Labs Cloud significantly more cost-effective for dealing with unexpected surges than traditional servers.
For instance, major Asian online retailer Zalora found that its infrastructure was no longer able to cope with the traffic demands placed on it. Zalora moved its entire infrastructure to the cloud and can now handle site traffic increasing by 300-400% during sales without experiencing any dip in performance.
The growth of online shopping has also opened up new markets for retailers, who can reach customers all over the world. The same is also true for their rivals, though, and a global digital economy means more competition for sales. Retailers need to be smarter about winning and retaining customers, and must rely on more than discounts to entice people to their page.
Appropriately, digital marketing technology has exploded in order to fill this need. Brands can now engage with their customers across a huge range of channels, including email, social media and instant messaging platforms, with cloud-based tools not just to efficiently automate these communications, but to track the interactions with customers across all an organisation’s channels. This helps retailers form deeper and more meaningful connections with customers, increasing brand loyalty and boosting the relationship.
Customer-facing technology like online storefronts and digital marketing aren’t the only tools that have drawn retailers to the cloud, however. There are many back-office and line of business roles within retail that have benefitted from the recent growth of SaaS applications, including areas like stock control, logistics management, payroll and more. It’s even helped modernise physical stores, and cloud-based AI systems can now be used to perform complex operations like measuring footfall numbers or stock levels from CCTV footage.
Arguably the most significant change that the cloud has introduced, however, is a focus on data-driven decision-making. All of the tools and techniques we’ve spoken about so far generate information about who shoppers are, what products and services they’re most interested in, when they make purchases, what device they make purchases with, and much more. All of that data can be collected, harnessed and analysed in order to increase your store’s effectiveness.
This can be something as simple as changing what time your email newsletter goes out in order to match your customers’ activity patterns, to a more in-depth change like analysing bounce rates to make your store easier to navigate. The shrewdest retailers are taking all of their available customer and sales data and combining into what’s known as a “single customer view”, representing a near-complete picture of that brand’s customer base. Rather than investing in large data centre deployments in order to support this, however, many organisations have turned to cloud platforms like G-Core Labs in order to facilitate these efforts. The G-Core Labs infrastructure is based on Intel solutions, including the latest 3rd Gen Intel Xeon Scalable (Ice Lake) processors, ensuring enterprise-grade performance for AI and data workloads.
For example, US department store Macy’s uses big data to create price lists for each of its 800 outlets – and is able to do so in real time using the cloud. It also uses analytics to create personalised offers for its customers, and the number of variations for a single mailing campaign can reach an impressive 500,000.
Of course, all of that data also makes an attractive target for hackers, and retailers in particular need to ensure that their cyber security practices are up to standard. Cloud-based endpoint protection systems can help safeguard back-office staff, while robust monitoring and alerting tools can flag suspicious activity on any public-facing sites. Intel SGX sensitive data protection technology is also integrated into the G-Core Labs cloud.
Distributed denial of service (DDoS) attacks are one common tactic that cyber criminals often use against e-commerce businesses, flooding sites with traffic until they crash, then offering to shut the traffic off in exchange for a payment. The perpetrators of these kinds of attacks deliberately time them around peak shopping times like Black Friday or Christmas, making them potentially one of the most financially damaging situations an e-commerce business can face. Thankfully, modern DDoS mitigation services like G-Core Labs’ DDoS protection have evolved to cope with these kinds of attacks, putting a layer in front of the site that can detect and intercept malicious traffic before the target’s infrastructure can be overwhelmed.
Online health and beauty retailer eVitamins tried multiple solutions to reduce the impact of DDoS attacks – including adopting intrusion prevention systems, blocking suspicious IP addresses and analysing logs – but failed to sufficiently reduce the disruption and cost they caused the business. It finally achieved effective DDoS protection by transferring its infrastructure to a public cloud environment.
The world of retail has changed enormously over the past decade, and it’s not going to stop any time soon. Both high street and ecommerce businesses are in a period of rapid evolution, and cloud services are essential for staying ahead of the curve and on top of your competition. Whether you want to increase customer retention, maximise transactions or simply make life easier for the technical teams keeping your business moving, G-Core Labs’ cloud technology is an essential tool in your arsenal.
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