“Showroom” businesses are turning to Cloud Computing in order to remain competitive

A look at some of the benefits of cloud adoption from the point-of-view of retailers

When internet shopping first began to take hold, retailers were understandably nervous.  After all, they didn’t whether or not this would bring about the end of traditional brick-and-mortar sales or merely impede them slightly.  Sure, some retailers were hurt, but a great deal of them survived, and those that did began shifting their business models to include such things as online sales departments.  Naturally, this also meant that some of these companies would need to beef up their IT elements or build entirely new departments altogether.  All of this was done of course, in an effort to stem the tide of lost and leaking sales figures which were spilling over into the sea of internet e-retailers.

However, things didn’t exactly go as planned.  In many retail sectors customers merely started to use large stores with “showrooms” as little more than viewing galleries where they could learn more about products, physically inspect them and perhaps even test them out a bit.  Once these consumers learn what they need to know, they then simply go online to look for the company offering the best price.   So, where does this leave the retailer then, what can they do to combat this trend and boost sales?

Right now some retailers are tapping into the power of cloud computing in ways that many might not expect.  For instance, the cloud, when used in tandem with a standard big data solution is able to process a large amount of data related to the activities of specific customers.  The idea is to learn more about what these people want (aside from low prices).   In this way, these businesses can further adapt to capture a greater percentage of sales from “showroom” buyers.  Learning more about your customers is never a bad idea, after all.  Furthermore, once you know what unifies certain groups of consumers you can begin to make physical changes to your store(s), business model, or anything else that might provide additional benefit.  Additionally, having access to such useful information also means that traditional retailers can execute better event scheduling procedures, which usually translates directly into increased sales.  

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There is another element here though; if retailers can use the cloud and big data to essentially data mine their customers, they are also capable of creating better online sales programs.  In other words, while an organization might have physical stores which capture a certain percentage of sales, they might also want to construct highly developed online e-retailing assets which are designed to compete with others in this area.  The idea is to really identify what these customers are really looking for (maybe even who they are) so that your business can land the e-sales in lieu of someone else.

But this isn’t the only way that cloud computing is contributing to boosting the retail sector; there’s also the notion of IT budget trimming.  The drop in annual expenditures which most companies experience after moving to the cloud is significant, with many reporting something in the neighborhood of around a whopping 50%.  However, it’s important to remember that we’re also not talking about a loss of capabilities here; just on-site maintenance and labor costs, mostly.  The point is, cloud computing is very efficient and delivers quality service at more affordable prices (and yes, it’s ironic that physical retailers who are combating e-retailers are turning to largely web-based services.)

Moreover, the idea of using a cloud-based system which allows for mobile point-of-sale-based purchases is also catching on.  It works like this, basically:  you find something you like in-store and an attendant simply scans it and bags it right there on the spot, wherever you are in the store.  Other methods include customers using their mobile phones as debit devices, etc…  The fringe benefit of using such methods once again goes back to cloud computing; where the data is collected and can even contribute to inventory management (think: automatic reordering once a specific item drops below a certain level, for example).

Regardless of how the cloud might be used to handle the technical side of running a retail business; arguably, it’s most important application is in boosting physical and online sales.  In all honesty, those companies which neglect to focus on the importance online sales sites quickly find themselves being pushed out of one or more markets.  What’s even more discouraging is the fact that these same institutions also often have the IT resources needed to build online retail portals.  Just imagine how beneficial it might be for showroom retailers to include such things as QR codes or links to online sales sites right there in their stores.  Such an approach would remove the “internet search” step for many consumers and perhaps even coerce them into simply making a purchase then and there.  At any rate, cloud computing shouldn’t be seen as something which is contributing to the downfall of traditional retail stores.  It’s an equal opportunity technology which retailers are increasingly latching onto and putting to good use.

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