How the Cloud Has Supported Retail Business’ Accelerated Shift to eCommerce

Nearly every business has been impacted by the coronavirus pandemic in one way or another, and the retail sector has undoubtedly been one of the hardest hit. According to GlobalData, at least 61% of brick-and-mortar retailers — totaling nearly 260,000 locations around the United States — were closed in April due to the crisis. For an industry that was already facing strong competition from online shopping giants, retail’s virtually overnight and unexpected acceleration toward digital-first represented a seismic shift.

However, thanks to the flexibility of the cloud from providers like Microsoft Azure, Amazon Web Services (AWS), and Google Cloud, many retailers were able to pivot from in-store to online, transforming their strategies and adapting to a new normal of eCommerce-focused retail models in record time.

Synchronizing Cross- Company Shifts

For retailers, all facets of the business — from warehousing to marketing to merchandising —  needed to pivot to support the escalation of eCommerce initiatives. Synchronizing these shifts is critical to stay in alignment during a period of swift change — and with agile systems already in place, companies that prioritized digital strategies were already ahead of the game. One global fashion retailer’s migration to Azure (just before the pandemic) further highlights these benefits.

With its supply chain management, inventory, and website capabilities all hosted on Azure by the arrival of COVID-19, the retailer was not only prepared to handle the spikes in online traffic, but also to predict customer demands in the early days of lockdown. As working from home and quarantine became the norm, Azure’s Machine Learning capabilities helped this retailer be among the first brands to quickly pivot — providing customers personalized eCommerce experiences that reflected their current wants and needs.

Primed to Adapt Swiftly

The capabilities of the cloud even allowed retailers that had been slower to incorporate digital technologies to quickly transform their models when it mattered most. While it typically takes an organization a minimum of six to nine months to build and implement a complete eCommerce solution, McKinsey reported on one European retailer that was able to do so in just 13 weeks. With the power of the cloud, the retailer (which operates about 1,000 brick-and-mortar stores worldwide) created an online solution that integrated every aspect of the business, from tech and design and operations to product assortment and marketing. The newly digitized business saw basket size grow 3x from physical stores, with revenue up 3% in its first month.

Equipped for Rapid Scaling

As online shopping rates exploded, organizations, particularly essential retailers like grocery stores and mass merchandisers, were forced to adapt — and fast. According to Philip Moyer, VP of Industries for Google Cloud, one Canadian grocery retailer, saw online orders increase 20x since the start of the pandemic. QuantumMetrics reports online conversion rates were up an average of 9% year-over-year in February — demonstrating levels of buying urgency usually reserved for Cyber Monday.

To meet this unprecedented, widespread demand, Google Cloud implemented its Black Friday/Cyber Monday protocols for all customers. This capability ensured businesses with eCommerce systems that depended on the cloud could support the surges in traffic and stay reliable during this period of accelerated growth.

Prior to the pandemic, retailers were increasingly considering the benefits of going digital — but never before had such urgency been placed on the industry. Cloud technology made it possible for retailers to transform their businesses in a matter of weeks in response to the extreme changes brought on by COVID-19. While the initial months of the crisis gave retailers around the world little choice but to rethink and rebuild their business models to reflect a digital-first world, the online shopping and eCommerce trends that were spurred by coronavirus are here to stay.

Every day, Centrilogic works to support businesses in all sectors, no matter what stage of digital and IT transformation, to ensure every organization is prepared for whatever “normal” comes next. To learn more about how we can help your businesses navigate the digital transformation, call or message us today.