In March 2015, a technology company put out a set of slides titled ‘What’s Keeping CEOs of Retail Companies Awake at Night’, stating that CEOs are startled by the rising expectations of a digital customer. In my experience, some surely are, but not all.Read More
When the cure is worse than the disease
In March 2015, a technology company put out a set of slides titled ‘What’s Keeping CEOs of Retail Companies Awake at Night’, stating that CEOs are startled by the rising expectations of a digital customer. In my experience, some surely are, but not all. What customers actually want is quite simple: omni-channel right now.
Customers expect everything to be seamlessly connected, so they can be treated as the same person whether they interact with a retailer online or over the counter. They also want flexibility in how their purchase is fulfilled. A big ask for many retailers, usually impaired by their retail management systems.
Leaving aside retailers that already operate smooth omni-channel businesses, the author of the slides suggests that all other retailers move their systems into the ‘Cloud’, promising that this will solve all their technology problems.
Usually, it pays to get a second opinion
Imagine a retailer operating 1,000 shops with 300 users at Head Office, currently connected to their main server using a 1 Gbit/s Local Area Network. The author suggests that all these users should instead connect to their server over the internet, running at 0.01 Gbit/s, via a public network that is unsecured and susceptible to variations in speed and availability. How much efficiency would your business lose due to 100 times slower data flows for head office users?
Let’s hypothesise further that the same retailer runs at least ten batch streams, processing incoming sales, calculating stock allocations, optimising warehouse pick runs, creating financial journals – all currently connected to the main server via the ultra-fast LAN. Again, the author proposes that these high volume processes are run through a 100 times slower connection (over the internet). In my experience, such high volume transactions could not be processed efficiently.
Finally let’s look at the retailer’s 1,000 stores, which the author would also like to run over the internet. But, what if Point-of-Sale (POS) experiences slow response times or fails because of network issues or the cloud server malfunctions? The customers won’t be affected, they will simply go to the nearest competitor to make their purchase.
Bottom line, the slides provide a good diagnosis of the challenges retailers face, but they advocate a cure worse than the disease.
The Retail Directions prescription
Instead of making your business solely reliant on the ‘Cloud’, retailers need ThunderCloud™ system architecture. The ThunderCloud™ means a requisite combination of technologies that optimise retail IT for speed and resilience: LAN for the Head Office team, LAN for batch processing, Cloud for ecommerce, and message queuing to service POS. Any other architecture will have fault lines and will be a source of continuing annoyances, customer dissatisfaction and massive unnecessary costs.