by Zeus Kerravala

Best practices for digital transformation in retail

May 13, 20197 mins
Data CenterDigital TransformationRetail Industry

It’s time for retailers to embrace digital commerce. But are they ready for transformation? Here are some key things they must consider as they implement digital commerce strategies.

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Consumers have spoken, and there can be no doubt that digital commerce, in all its forms, is here to stay. E-commerce represented close to 15% of all retail sales in 2018, according to U.S. Commerce Department figures, and that number is increasing every year. It’s a wake-up call for traditional retailers who needed to embrace online channels “yesterday” and are rethinking their customer acquisition strategies.

The appeal of e-commerce is obvious. Consumers want instantaneous, effortless, secure, round-the-clock shopping experiences. What’s more, there is a growing demand for personalization across the entire shopping experience – personalized shopping recommendations, one-day shipping to a place of one’s choosing, easy returns, etc. – things that traditional brick-and-mortar retail outlets cannot provide.

As the old political adage goes, “If you can’t beat ’em, join ’em,” and thousands of retailers across the globe are rapidly developing digital commerce strategies to capitalize on the $4.5 trillion market opportunity it presents.

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However, with true “David and Goliath” competitive situations in just about every retail segment, businesses must not only embrace the basics of digital transformation but also ensure that they employ best practices with regards to the performance and security of their digital shopping experience. 

I recently spoke to Sonal Puri, CEO of Webscale, about digital readiness. Her company powers digital transformations for B2C, B2B, and B2E mid-market and enterprise customers in seven countries and for six of the Fortune 1,000 businesses, so she is well versed on what it takes for retailers to succeed in the digital era.

“The key to success for the modern retailer is an obsession with customer experience,” she said. “We are focused on enabling retailers to deliver fast, scalable, and secure digital storefronts, to ensure their digital commerce initiatives are successful and [to] help level the playing field for them to compete with the likes of Amazon and Walmart.”

Webscale’s recent Series B round of $14 million validates the company’s focus is aligned with market trends

For retailers, digital transformation starts with the cloud

A shift to digital commerce is not just about building a website and launching a series of new product categories. Retailers also need to think about their web hosting infrastructure.

Online storefronts hosted in legacy static data centers can be severely limited in terms of scalability, performance, security, and total cost of ownership. A move to the cloud is inevitable if retailers care about creating world-class digital shopping experiences.

“Hyperscale cloud providers like Amazon Web Services, Google Cloud Platform, and Microsoft Azure provide merchants with significant benefits – great flexibility, infinite capacity, massive scalability, and a lower cost of ownership by having a system that is always right-sized,” said Puri.

Moving to the cloud, however, is just the start. Modern retailers must also take steps to avoid some common pitfalls when beginning their digital transformation journeys.

Reducing website downtime is critical

Site downtime for a large or mid-sized retailer can result thousands or millions of dollars of lost revenue. It can also permanently damage brand reputation and customer stickiness (as shoppers will likely visit competitors’ websites if they have a bad experience). This happens more often than you realize, even to large companies that one would think can outspend smaller ones on infrastructure. Downtime happens most often when online storefronts get flooded with more traffic than their infrastructure can effectively handle, such as during peak sale events, aggressive marketing promotions, and holiday seasons.

What retailers need is auto-scaling, which forecasts changes in site traffic and adjusts capacity to prevent expensive drop-offs, as well as eliminates the challenge of overpaying for capacity during slower periods.

“The ability to scale capacity ahead of demand is critical for a digital storefront so it can cater to a growing base of shoppers,” explained Puri. “Predictive auto-scaling guarantees reliable and consistent site uptime while ensuring that your capacity is always right-sized.”

Slow page load times lead to unhappy customers

In digital commerce, slow is as good as down. There is a fair amount of research available that correlates between page load times and end-user satisfaction, loyalty, revenue, and even, traffic from organic search engines.

Retailers must adhere to several best practices and invest in technologies such as content delivery networks (CDNs), content optimization, application delivery controllers (ADCs), and image management to ensure a lightning-fast digital experience. Web pages, content, and images should be optimized for both performance and experience.

Invest in security to fight cyber threats and bot attacks

Cyber attacks are becoming increasingly malicious and frequent, and digital commerce is one of the top targets. While hackers in the past would inundate digital storefronts with DDoS attacks to bring them down or hold websites for ransom, the more sophisticated attackers today insert malicious scripts to steal identities and credit card data. Cyber criminals also have more resources available to them in the form of bots that scan for vulnerabilities and attack the sites most exposed.

Retailers must invest in a comprehensive security solution stack – one that includes a web application firewall, intrusion detection, bot management, and machine learning – to fend off advanced threats. Security vulnerabilities must always be patched in near real time, and a team well-versed in these technologies is a critical requirement.

“Modern retailers can’t afford to ignore security as they embark on digital transformation,” Puri said. “Security solutions must be implemented at the edge of the network, as well as at the origin infrastructure where the digital storefront is hosted, not one or the other alone.”

Digital skills and executive commitment also key to success

Finally, digital transformations can never be successful without executive commitment and involvement of the right people. Often, these may involve radical changes in the organizational structure.

Creating stunning digital experiences to acquire more customers and drive new revenue streams requires willingness, expertise, and experience. Modern retailers must consider hiring experts as employees, vendors, or consultants – people who know what a great digital transformation looks like and have done it before.

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