Retail’s Store of the Future Will Run on Cloud

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While e-commerce has attracted customers with a broader selection of products, lower prices and convenience, the importance of stores and store associates cannot be undervalued – especially when 85 percent of consumers still prefer to shop at physical stores.

In-store innovations—such as technology enabled associates, location based services including display specific offers, digital content such as augment reality and 3D in-store maps—will be the competitive differentiator in the next battle to keep and gain new consumers. A key component of these in digital store innovations will be insights gained from Internet of Things (IoT) connected devices run on the cloud.

In the next four years, Gartner projects there will be 21 billion IoT connected devices. These devices, with smartphones and tablets as the hubs for real-time interaction with consumers, will guide new online and offline brand experiences. Retailers can leverage cloud computing to securely connect devices with existing systems, develop digital capabilities and quickly access new sources of data from IoT beacons, social media analytics and cognitive intelligence.

Cloud solutions help retailers incorporate all pertinent information and develop new capabilities more quickly. In particular, hybrid cloud models are designed to combine new web-based IoT and digital data with on-premises and legacy systems into one cohesive environment. The hybrid cloud ensures the most relevant information is gathered and integrated – from both inside and outside of the business. It is critical for retailers of all sizes to develop a culture of continuous experimentation and innovation get ahead of the competition with speed and flexibility.

For example, the GameStop Technology Institute (GTI) is using IBM Cloud to research and develop the next generation of mobile applications to improve its in-store and online shopping experience at its 6,000 retail stores.

The GTI Data Hub is built on a Bluemix hybrid cloud platform so the cloud services and on-premise systems are in one place. This ensures GamesStop’s enterprise and research partners can collaborate on the same data sets in real-time. As a result of GTI’s work, GameStop is piloting new ways to utilize in store beacons. While retailers have traditionally leveraged geolocation-based beacons in the store by pushing notifications or promotions straight to customers’ smart phones, GameStop took another approach. It embedded beacons in dedicated zones of the store separated by product categories.

When customers approach the beacons and hold up their smartphones, they can receive real-time, digital content that’s specifically tailored to their areas of interest. For instance, customers wanting to see the latest Xbox One sales can place their smartphones near a beacon in the Xbox One section to see what’s new. All of this communications is delivered via push notifications through the retailer’s app built on the cloud.

As retailers use data from connected devices to develop and deliver personalized promotions, cloud technologies enable developers to build the next generation of mobile apps—including mobile wallets integrated with loyalty programs. By integrating these two systems, consumers can easily manage their own rewards and custom offers from a single platform.

For example, Kohl’s has a loyalty program featuring a mobile wallet built into the mobile app. Instead of shoppers proactively taking the time to print out a coupon or offer email then physically bring it into the store, they can open the Kohl’s app once in the store, click the offer they received and have it scanned at checkout. Kohl’s has found loyalty customers using the app, 60 percent of whom almost don’t have a Kohl’s credit card, made two extra trips to the store and spent an incremental $80 per year.

A big piece of the puzzle for creating fresh, interactive in-store shopping experiences is leveraging IoT devices to collect and disseminate data, quickly testing new ideas and regularly implementing new capabilities to meet consumers needs, wants and aspirations. This is only possible with connected devices and hybrid cloud services.

In the industry’s current disruptive environment, retailers are in a race to connect data from any and all channels to innovate quickly and best serve the customer. The winner will clearly emerge as a hybrid cloud-based business.