Retail business has always been a fast-moving, often-changing industry. Today, change isn’t being driven by new fashion styles or popular toys. Instead, the biggest changes in the retail center on the very nature of where, when and how products are purchased.
The traditional brick-and-mortar retail model has morphed into a hybrid approach that combines physical stores, e-commerce, and virtual showrooms—all in a 24/7 time frame. In today’s retail environment, the “store” is never closed. As a result, retailers must fortify their efforts to ensure that their business systems are always operational for all internal business users and all consumers—wherever, whenever and however they want to buy. Increasingly, retail functions are shaped and driven by digital technology, creating a heightened need to support the digital lives of retail buyers and workers across a wide range of devices, applications, and services. If retailers fail to align access to their systems with constituents’ digital lives, they will find themselves in an untenable situation. This post discusses why IT availability and business continuity are critical to digital life in today’s retailers, and to the digital lives of buyers around the world.
Digital transformation is changing how retailers do business, just as it has changed the way consumers buy goods and products. No longer are consumers tied to aging retail models built around physical stores, either in a downtown shopping district or a sprawling mall environment.
Digital technology has enabled such transformative trends as e-commerce, virtual showrooms, omnichannel retailing, location-aware consumer promotion and others. It also has mobile-powered virtually every step in the retail ecosystem, from the loading dock and the showroom to the checkout counter and the exit door security gates.
Even for traditional physical stores that have not been shuttered, change has been dramatic, as brick-and-mortar retailers play new roles as showrooms, fulfillment centers and service depots for purchases often made at the click of a mouse or a touch on a phone’s screen.
A major by-product of these changes—as well as a driver of transformation—is a remarkable shift in the competitive landscape of retailers. No longer can retailers’ competitors be easily categorized or fit into similar boxes. In essence, digital technology has allowed anyone—big or small—to compete with anyone else. The shifting competitive landscape is now marked by mergers and partnerships once thought to be fantasy. Consider that on the same day
retail behemoth Amazon bought trendy food supermarket Whole Foods, industry giant Walmart bought boutique menswear retailer Bonobos.
Today, retailers compete with, well, everyone. Digital life in retail centers on two major initiatives: helping retailers’
employees do their jobs more efficiently and enabling consumers to buy what they want, when they want and where they want. In all instances, success is defined by the notion of making the shopping experience a positive one for consumers and a more profitable one for retailers. Of course, that means different aspects of each group’s digital life must be addressed:
• Shoppers: E-commerce, mobile shopping, channel-agnostic price checking and merchandise availability discovery all are central to the digital life of retail consumers. It’s not only easy for them to shop for jeans in an online mall, but it’s often a more desirable approach than getting in a car and driving to the mall—especially if the buying
urge or a unique offer reaches them during hours when the physical stores are closed. It also gives customers the satisfaction of finding a specific product in just the right size or color when their local store is out of stock. In short, the digital life of a retail consumer is based on convenience, customization, and control.
• Retail store personnel: Many in-store employees have digital lives that depend heavily on reliable, uninterrupted access to data, services, and applications.
• Inventory management: Tracking the comings and goings of merchandise, from the time it arrives at the loading dock to the time it is purchased off the shelf requires real-time, hyper-accurate information. Inventory management, in both a physical and a virtual environment, is the lifeblood of most retailers.
• Loss prevention: Retail “shrink,” or lost merchandise, can come from many sources—employee theft, organized retail crime, poor inventory tracking systems or simple human error. The fact is, however, that retail loss prevention is a $100 billion-a-year problem. Loss prevention specialists’ digital lives require access to a wide range of digital services and functions, from closed-circuit TV monitoring to multi-frequency theft alarms. When those systems go down, shrink inevitably goes up.
• Merchandising and promotion: Knowing—with high certainty— which programs are driving sales and profits and which ones are costing money is vital in merchandising and promotion. Reliable access to real-time data, driven by sophisticated analytics models, is essential to the digital lives of product managers and merchandisers at both the store level and corporate offices.
• Supply chain ecosystem: Ensuring the timely, accurate and reliable delivery of goods can make or break a retailer, regardless of its merchandise mix or channel fulfillment strategy. Lack of access to merchandise location, quantity, and SKU-level product mix is essential for the retail supply chain, from manufacturing to the distribution warehouse to the store.
The cost of downtime for retailers is staggering, and the move to always on shopping has increased the importance of business continuity. Consider, for instance:
• Each minute of downtime for point-of-sale systems costs retailers an average of $4,700.
• Most midsize retailers can tolerate only less than an hour of downtime for their most mission-critical data and applications.
• 42% of retailers experience up to four hours of downtime in a typical year, and 24% of retailers experience between four and 72 hours of downtime in a typical year.1 Of course, the impact on Internet retailers is even more severe. In fact, a 30-minute service outage at Amazon.com in 2013 resulted in financial losses of more than $66,240 per minute.2
This puts tremendous pressure on IT organizations to do two things: 1) ensure that downtime occurs as infrequently as possible (ideally never), and 2) recover from the downtime immediately and fully in order to
ensure business continuity.
Meeting those demands starts with two key steps:
• Creating and adhering to a business continuity plan: Digital life in retailing cannot tolerate any downtime. The business continuity plan must protect all the critical business units across physical and virtual storefronts. It also must span the full supply chain into and out of the store, as well as online purchases. The business continuity plan
must take into account the needs and business processes of all retail functions, as well as the need to ensure an outstanding experience for the customer.
• Focusing the business continuity plan on Availability: Availability of data and applications must be the cornerstone of the business continuity plan. Retailers cannot afford any downtime because it translates into lost sales, missed profits and a diminished customer experience. If and when downtime does occur, data, applications, and services must be immediately restored to their most recent known state to ensure a quick and reliable resumption of consumer buying without the frustration of lost order sessions.
When retail IT organizations—typically understaffed and underfunded for escalating business demands—look for solutions to support the digital lives of their business users and consumers, they have had to confront a stark reality: A typical retailer now must plan, build and implement systems supporting “The Always-On Enterprise.™” And just as IT leaders in enterprise environments are facing an “Availability Gap,” so too are IT leaders supporting the “Always-On Store.”
An Availability Gap occurs when an organization cannot meet the recovery requirements expected by its business units. Approximately 80% of IT decision-makers say their organization has an Availability Gap, and 75% say they also have a “Data Protection Gap,” meaning they are unable to protect their data frequently enough to ensure that their business units’ expectations against data loss are being met.3 These gaps are expensive in both real dollars and opportunity costs. On average, enterprise organizations experience direct financial costs of about $21.8 million a year due to Availability and Protection Gaps. In addition, 66% of organizations say their digital transformation initiatives are being hindered by unplanned downtime or insufficient Availability.
An Availability Gap is particularly destructive to digital life in retail for a simple, compelling reason: It chokes retailers’ ability to generate sales and profits, and it prevents shoppers from purchasing the products they need and want. It affects the ability of retailers’ business stakeholders and shoppers to enjoy a mutually beneficial, satisfying experience. And those limitations not only impact the relationship between retailers and their customers today but also negatively shape the long-term relationship by undermining customer confidence and trust.
There are, however, steps IT decision-makers can take to close their Availability Gaps. First, as previously mentioned, is to create and follow a viable business continuity plan. Second, IT leaders can invest in Availability solutions designed to address the business continuity challenges of today’s highly virtualized and cloud-enabled retail computing environments.
Availability software is critical to maintaining and preserving digital life in retail. But not all Availability solutions deliver the same level of functionality, reliability, and performance. In evaluating potential Availability solutions for retail, IT decision-makers should focus on three critical areas. These are:
1. Ensuring continuity and Availability-Retail Business
• Optimized backup and recovery strategy: Every retailer should follow the 3-2-1 best practices guideline for data protection, which is:
• Maintain at least three copies of your data
• Store data on at least two different types of storage media
• Keep one copy of the backups in an off-site location
• Ensure data loss avoidance: Your Availability solution should enable you to achieve major improvements in recovery time and recovery point objectives (RTPO™) of less than 15 minutes for all applications and data.
• Off-site backup and recovery: You need the flexibility to leverage cloud backup and replication as part of your 3-2-1 data protection strategy.
• Fast recovery of the entire machine or application-level recovery:
Verifiable recovery of every file, application and virtual server every time is key.
2. Compliance and visibility-Retail Business
• Visibility and real-time monitoring and reporting for your virtual environments: This will help you not only meet compliance requirements, but also anticipate and address potential problems before they affect operations.
• End-to-end visibility for both physical and virtual machines: This will help you prevent possible failures of any type of application or system.
• Creation of incidents based on events that happen in your environment: Retail environments are subject to strict regulations for data protection, such as the Payment Card Industry Data Security Standard (PCI-DSS), as well as other sensitive areas. Thus, having a clear picture of events can save a lot of time and money in meeting compliance requirements.
3. Workload mobility and cloud data management – Retail Business
• Testing applications and application upgrades before they go into production: One of the challenges in meeting the digital life demands in retail is addressing “IT consumerization.” The concept is that all users are consumers of technology in their personal lives and they bring those same expectations with them to both their workplaces, including in retail store environments, and wherever—and whenever—they shop. This means applications must be delivered quickly and bug-free. By using a solution that features an on-demand sandbox to test applications, IT teams can cost-effectively accelerate development and improve quality assurance.
• Cloud-based workload mobility: Public cloud is an increasingly valuable aspect of digital life in retail because it can be a cost-effective way to scale IT resources without big capital expenditures or additional hiring. By leveraging public cloud services such as Microsoft Azure, IT teams can support DevOps teams and other lines of business with the infrastructure they need without having to go through lengthy procurement and deployment processes.
• Flexible, simple and cost-efficient deployment options: With the right Availability solution, you should be able to manage, migrate and restore your data across a physical, virtual and cloud-based IT infrastructure without complex configurations or additional hardware investments, thus minimizing operational costs.
In today’s retail environment, IT decision-makers have an important obligation to meet the digital life requirements of all their internal functions, such as inventory management, the point of sale, merchandising, loss prevention and back-office finance, as well as the diverse shopping and purchasing needs of consumers. To meet these obligations, IT leaders must focus on business continuity and close any Availability Gaps. With the right solutions in place, IT teams can ensure continuity and Availability, meet compliance requirements, extend visibility and leverage workload mobility and cloud data management.- An article by Veeam
For more information on how your retail enterprise can support digital life with modern business continuity and Availability solutions, contact Musato Technologies today.