Three Reasons Cloud-Hosting Providers are Targeting Retail
Retail is becoming an increasingly hot market for hosted cloud computing providers. Some of those providers, such as Amazon Web Services (AWS) and the Aliyun cloud division of Alibaba, are operated by retailers.
Also Google, which has an online retail marketplace, recently launched a partnership that will base the next generation of JDA Software Group of cloud-based omnichannel and supply chain solutions on the Google Cloud Platform. And representing traditional IT vendors, Oracle has released a slew of more than 24 new retail-centric additions to the Oracle Cloud Platform.
Why the growing interest in providing hosted cloud services to retailers? Here are three important reasons.
‘Retail’ is a platform
The fact that retailers have taken leading positions in hosting retail cloud services illustrates a larger shift in the retail industry. Increasingly, being a retailer simply means providing an online platform that brings consumers and goods together.
conline storefronts operated by companies seeking to reach Chinese consumers. Amazon, Google, Wal-Mart and eBay are among the e-commerce organizations hosting online marketplaces that expose third-party sellers to their user bases.
Hosted cloud services support this platform model by letting almost any company quickly become a direct-to-consumer retail business, with virtually no physical infrastructure required. Third-party cloud services can manage front- and back-end functions such as site maintenance, payment acceptance, order fulfillment and inventory management.
Inventory itself can be stored and shipped remotely via third-party services delivered through hosted cloud providers. The “retailer” can essentially be reduced to a platform promoting a brand, with all the heavy lifting offloaded to hosted cloud providers.
Demand is spiky
Spikes in consumer demand can be hard to predict, particularly with the new wild card of social media-driven consumer fads. Even “predictable” demand spikes like back to school or the end-of-year holidays can throw unexpected curveballs. Recent headlines demonstrate that special promotions or limited-edition products can prove more popular than expected.
The elastic nature of cloud computing offers retailers an ideal safeguard against being caught short in the face of unexpected consumer demand. Networks that might ordinarily crash due to overwhelming traffic can immediately have capacity added at an affordable premium, with bandwidth and cost returned to normal when the spike ends.
Also, holiday planning becomes easier when a retailer can simply reach an agreement with a hosted cloud services provider to automatically boost bandwidth between Black Friday and the end of the year, with a standby order to add even more capacity as needed.
Small is big
The elastic, scalable nature of cloud computing also opens up the power of large enterprise systems to smaller retailers who formerly could not afford or internally handle them. One byproduct of the previously mentioned evolution of retail to a platform model is that more small players than ever are at least partially operating as direct-to-consumer businesses.
Hosted cloud services give these smaller retailers a fighting chance to succeed in an industry dominated by large chains. The flexible nature of cloud computing means providers can host numerous retailers on the same public platform and parse out capacity as needed from the same source, making it cost-effective on their end, as well.