EXCLUSIVE: The top reason retailers need the cloud is…
A new survey released exclusively to Chain Store Age reveals the leading ways retailers utilize cloud technology.
Slightly more than half (52%) retail executives surveyed as part of a fall 2024 survey of 1,420 IT decision-makers across industries sponsored by Rackspace Technology said they need cloud strategies for artificial intelligence.
This led other retail cloud needs such as acquiring the scalability and flexibility required to keep up with changing markets (47%), IT cost reduction and effective spending (45%), and security and compliance (37%).
When asked why they are integrating AI with the cloud, slightly more than half (51%) of respondents said to improve efficiency (51%), followed by advance security and threat detection (49%), enhance data analytics/insights (41%) and optimize cost (34%).
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The leading challenge with aligning AI strategy with revenue goals for retailers is the resistance to change in revenue-generating units (42%). Other challenges cited by respondents included inadequate data or tech infrastructure, lack of cross-functional collaboration and insufficient budget or resources.
Private cloud trends
Two-in-three (66%) respondents have considered repatriating or have repatriated workloads from the public cloud back to private or on-premise clouds to improve performance in:
- Data security/compliance (51%)
- Integration (49%)
- Cost (45%)
- Infrastructure (41%)
Respondents that have repatriated from the public cloud back to private or on-premise clouds report success with performance/latency/data sovereignty (86%), data security/compliance (84%), cost/budget (78%), unexpected cloud service downtime/reliability (71%) and vendor lock-in/skills gap (62%).
Technologies that will be important near-term
When asked what tools, platforms or methodologies are most critical to retail IT operations in the next year or two, respondents cited:
- Data security/compliance platforms (55%)
- Database as a service (45%)
- Hybrid cloud for multi-environment deployment (45%)
- Edge computing for distributed apps (31%)
Data security/privacy/compliance scored high among retailers throughout the survey in terms of:
- Cost reduction (62%)
- Anticipated challenge in aligning with cloud strategy (52%)
- Adopting edge computing (46%)
- Mitigating lack of skilled personnel (41%)
- Mitigating significant resource gap in managing cloud (40%)
"Retailers are increasingly recognizing the strategic importance of cloud adoption, particularly in integrating AI to enhance operational efficiency, security, and data analytic," said Nirmal Ranganathan, VP/distinguished architect, Rackspace Technology, in exclusive commentary to Chain Store Age. "However, resistance to change within revenue-generating units poses a significant challenge. To successfully align AI strategies with revenue goals, retail organizations must foster a culture of collaboration and adaptability. By addressing these concerns, retailers can unlock the full potential of cloud technologies to drive growth and innovation in a rapidly evolving market."
The survey was commissioned by Rackspace Technology and conducted by Coleman Parkes Research in October and November 2024. Findings are based on the responses of 1,420 IT decision-makers across manufacturing/logistics, retail, hospitality/travel, energy, healthcare/pharma/biomedical, government, media/entertainment, and financial service sectors in the Americas, Europe, Asia, and the Middle East.