Modern Retail

Technology Infrastructure Should Be at the Heart of Retail

technology infrastructure

With continuous change in the high street it’s clear that 2020 will be a pivotal year for the industry to strive to return to its former glory. However, the key here is not to cling onto the industry’s past ‘successes’; but rather to look ahead, evolve and lay the right foundations for growth.

At a store-level, many retailers are hindered by poor technology infrastructure that is no longer fit for purpose, let alone scalable. To keep pace with consumer demand, stores must provide consistent customer experiences – which is simply not achievable with existing legacy systems in place.

Now is the time to modernise and explore game-changing solutions which enable flexibility, more dynamic processes and network resilience. Whilst a poor technology infrastructure can’t be held solely accountable for a lack of retail growth, a better infrastructure can provide a stronger foundation for profits to increase. This can also enable firms to meet ever-changing consumer demands, delivering a much sought-after form of competitive advantage.

Transforming customer relationships with instore technology

A higher quality customer experience is fast becoming a cross-organisational priority too, with all business functions expected to positively impact a customer’s relationship. For retailers, this means it’s time to start considering the potential of the IT department to have a positive impact on customer experience. Traditionally IT has been viewed solely as a back-office function, with no significant bearing on customer relationships; but in light of the rise in digital transformation and ‘cloud’ technologies, it is crucial for IT to join the party and support the business with meeting its customer relationship requirements.

Moreover, as pressure mounts upon retailers to digitise their stores, instore technology infrastructure is emerging as a key enabler of excellent customer experiences. Strong network connectivity for instore devices and equipment is now a core driver towards a store’s performance. Without a sufficient network infrastructure in place and functioning properly, retailers are likely to be unable to confidently meet the demands of modern consumers while they’re instore. What if a customer wants to engage with your brand online while instore, via your Wi-Fi network, and can’t? This could potentially frustrate customers.

Put simply, retailers with ‘bricks and mortar’ shop fronts can’t afford to overlook the importance of an effective technology infrastructure – including network connectivity and cloud applications alike – as part of their survival or growth strategies during what are, arguably, some of the toughest times in retail.

A clean slate: letting go of legacy technology

Historically, retail stores didn’t require a huge amount of connectivity, and many retailers designed their network infrastructure based on what they needed a number of years ago. This often meant that they bought ‘cheap’ connectivity. As a result, these older networks are increasingly not fit for purpose and new solutions can’t simply be retrofitted into existing legacy technology effectively.

Consider how far-reaching the impact of a failed instore connection today would be: electronic point of sale (EPOS) devices could go down and prevent electronic payments from taking place, alienating and potentially losing shoppers who pay via their cards; stock databases would lose their accuracy and prevent store assistants from serving customers effectively – not to mention the impact on other systems including guest Wi-Fi, security and CCTV systems, as well as employee productivity.

Legacy technology, therefore, poses a huge risk to connectivity-dependent stores and threatens to push away the loyal customers that retailers worked so hard to obtain. So, transitioning towards a modern, dynamic, scalable and resilient network, therefore, needs to be a priority for the coming years.

One size doesn’t fit all: finding the right solution for your business

New technology is emerging at an astounding rate, opening up new opportunities for retailers and giving them more control of their infrastructure. This is enabling them to meet various changing business and customer expectations more effectively. However, this influx of options doesn’t mean that every solution is the silver bullet. The location of a store can, for example, change connectivity requirements: an out-of-town retail store with no fibre connectivity has different challenges to a flagship store on Oxford Street.

With the different requirements of each store in mind, retailers will need to consider a multitude of access technologies. One solution which is enabling resilient, flexible and bespoke multi-site infrastructure is software-defined wide area networks (SD-WAN). This technology is becoming increasingly popular because it can enable retailers to prioritise different forms of traffic and connectivity to the network – these intelligent networks can enable IT infrastructure to make real-time decisions about the state of the network too. For instance, if a customer instore is using a retailer’s connection to stream a video online, this could take up vital network bandwidth that is required to operate essential systems and technology instore. In this case, the benefit of a modern network, such as SD-WAN, is that it can be programmed to prioritise important applications and connectivity (e.g. payments or security systems) over non-critical traffic such as the video.

Again, SD-WAN might not necessarily be the best option for every retailer and individual circumstances need to be factored in too. But, it raises a key point that retailers have a challenging task on their hands, as they identify the right network infrastructure to support their business goals. As they do this, it will be important to collaborate with a strategic and proven technology provider that will guide them into selecting the most effective technology to mitigate the risk of technology mistakes further down the line.

In a cloud dominant world, having the right service-level agreements (SLA) in place is important too. This will minimise financial risk while retailers can take advantage of operational benefits such as in-contract term flexibility. What’s more, as consumer demands continue to change, retailers need to ensure initial SLAs allow network scalability. For an industry that peaks so dramatically in the last quarter of the year, it’s necessary for retailers to have the flexibility to scale up when needed and scale back down during off-peak seasons.

The importance of having a strong technology infrastructure cannot be overstated. With the right technology in place, retailers can respond effectively to modern digital transformation requirements and a challenging retail climate. Further, outshining the competition can be made possible for retailers, as their infrastructure will enable them to explore new services and features, such as instore virtual reality for enhanced customer experiences, Wi-Fi footfall tracking capabilities or tailored customer offers via Bluetooth.

Credit: Iain Shearman, MD, KCOM National Business.