Accelerating Business Growth by Digitally Transforming the Retail Industry
With limited face-to-face interactions due to the COVID-19 pandemic and an increasingly competitive landscape, retail companies are working to digitally transform to maintain a viable business and keep customers happy.
You may have heard the term “Digital Transformation” being thrown around as the new buzzword, but what does it mean? When we reference digital transformation, it is about using digital technologies to create new or modify existing business processes to reimagine how a business operates.
During the fifth session of the Digital Transformation Storytelling session, Arawan Gajajiva, Principal Architect at Matillion, and Steve Woods, Sales Director at HVR, joined us to discuss how retail organizations are leveraging the power of real-time data and cloud technologies to reduce costs, save time, and satisfy customers. Here are a few highlights from the session.
Common Data Challenges in the Retail Industry
From national and local chains to e-commerce, retailers of different sizes and scopes share a common issue—data silos. The type of data silos may differ depending on the type of business. Still, retailers have to manage data coming from the supply chain, warehouse and inventory management, and order fulfillment, in addition to data from SaaS sources such as Shopify, Magento, Google Analytics, social media, and email marketing. The goal is to get this data into a centralized data warehouse, leverage it as an asset, and build a 360-degree view of the customer.
For example, an online retailer based in the United Kingdom started with many disparate systems. They found it impossible to get a true 360-degree of their entire business, including the customers, supply chain, and inventory. The retailer attempted to get a complete view with an on-premise data warehouse but was unsuccessful. Then they decided to look at more cost-effective cloud-based solutions like a data lake. For that to be successful, they needed an efficient way to get the data from the disparate systems into the cloud and the data lake. With HVR, they could replicate the data in real-time and retire their legacy operational reporting services.
Since retailers are operating 24/7 online, the requirement to get data out in real-time has grown exponentially. Unfortunately, many of the systems that retailers currently use are way too critical for them to perform reporting and analytics directly.
A large global online retailer had a core system that held data about its retail partners and transactions. They needed a solution that would allow them to access this data without putting a heavy load on the system and affecting other business operations. It was an extremely high-volume system, so it presented additional challenges. HVR provided them with the ability to get a real-time copy of that data into AWS and S3 for efficient analysis and reporting.
Key Considerations in the Retail Industry
In every industry, there are specific considerations when it comes to data. In healthcare, data privacy is a huge consideration. In retail, an important consideration is the size of the system. Can the current system scale up to handle annual peaks or high product demand and scale down during slower periods? Now, with the elasticity that is offered with the cloud, retailers have greater agility to scale. Plus, they have the added benefit that the cloud brings of being able to get results faster as well as cheaper.
As a result of the global pandemic, there has been a sharper focus on the supply chain. In particular, there’s a greater desire to get visibility into what inventory is available and what’s due to come into the physical warehouses. With real-time insight, organizations can better manage their supply chain, maximize sales, and improve efficiencies.
For many retailers with e-commerce, the website is the customer-facing system. There are a lot of metrics and KPIs that should be considered. Like, how long does it take page take to load? How long did it take for a customer to check out? These things translate into conversion rates and customer satisfaction.
It’s important to consider that many retailers are in different phases of their analytical maturity. A lot of big national retailers are still performing analysis and reporting with Excel. Unfortunately, Excel isn’t going to scale or handle the quantity of data accumulated day over day and year over year.
On the other end, there are retailers a little further into their analytical maturity that currently use an on-premise data warehouse. And then there are the retailers that have fully moved the cloud and are looking for cloud-native tools like HVR and Matillion that can help them reap the benefits of the cloud and facilitate and grow real-time analytics.
For the online retailer based in the UK, the key driver was to get a 360-degree view, pull all the data together, and then use it to drive operational efficiencies. There was a secondary benefit because they also had a significant investment in Oracle database licenses. As they moved to the cloud, they could leverage AWS and services that AWS offer, like RDS, that significantly reduced their data center footprint and costs.
Another critical outcome is the amount of time it takes retailers to get the information and results they need to make real-time decisions. It’s easy to centralize your data sources in a cloud data warehouse and start receiving meaningful information quickly. Even if you decide the cloud isn’t the best option for your business, it’s easy to deconstruct and only pay for what you use. You no longer have to worry about multi-year licensing commitments.
Once your cloud data warehouse or data lake is up and running, it opens the door to a unique set of possibilities that will allow you to add more to analytics. Retailers are starting to use a machine learning algorithm, integrated into an ETL workload to score customer profiles and provide a personalized shopping experience.
Developing and executing a digital transformation strategy is a journey, and it doesn’t happen overnight. For those who still need internal support, consider starting with an option that will provide real and immediate meaningful results. For example, show the benefits of moving analytics to the cloud. Be sure to start with digestible chucks that will easily resonate with your colleagues.
In general, stay mindful of your current business requirement and short- and long-term goals. Take the time to think about your cloud data platform and the tools to grow your business. If you need any support, HVR and Matillion have partnered to provide customers with real-time, fully transformed data ready for consumption.
To learn more about how organizations are accelerating their digital transformation strategies by leveraging real-time data and cloud technologies, listen or watch all of the episodes in the Digital Transformation Storytelling series.