Consumers, businesses, and technology are all moving faster than ever. Retailers have been trying to keep pace by creating always-on, personalized experiences that blend the physical and virtual worlds. But many have found themselves unable to flex and evolve quickly enough. And now the pandemic has accelerated digital adoption by three to five years, adding to the urgency.
The result? Retailers need speed and flexibility in their IT more than ever. But to break free of their legacy constraints, they’re going to need a new ‘cloud first’ mindset.
We’ve seen during this pandemic how those retailers that were more digital, who had integrated channels, who offered curbside pickup and home delivery, who repurposed stores to double up as fulfillment centers, were—and still are—at an advantage.
But this need to innovate cost-effectively, continually and sustainably applies just as much to the IT environment. And that necessitates an adaptable business built with cloud at its core—it’s what Accenture calls living systems.
Creating Living Systems for Retail
With living systems, retailers can use the cloud to integrate the end-to-end business as a new retail platform. That enables them to not only rearchitect the business to get closer to consumers but also substantially reduce their impact on the environment.
The key to living systems is data. It is all about setting data free from legacy systems, generating deep insights from it, and using it to make better business decisions. With the right operating models and machine learning in the cloud, the business can plan, test and simulate the most impactful scenarios and understand the benefits and trade-offs of each.
One global jeweler’s experience amply illustrates the value of cloud. As its presence grew around the world, the business needed to be significantly nimbler in an industry where speed and responsiveness are critical. That meant leveraging the capability of the cloud to build a technology environment capable of meeting its digital aspiration of delivering a truly seamless customer experience. With support from Accenture, it successfully transitioned approximately 70% of its applications and infrastructure to the cloud within 18 months. The money and resources gained will be redirected to new digital initiatives including enhanced online shopping experiences.
Powering the shift to sustainability
Cloud-based living systems can also bring significant sustainability benefits. We think of this as the ‘green behind the cloud’ and it starts from the earliest design phases of a cloud journey. When planning a migration and choosing a cloud vendor, retailers should now be thinking about the potential sustainability benefits just as much as financial and operational efficiencies.
Once in the cloud, retailers can continue to enhance sustainability by adopting green software engineering and deployment techniques. They can also look at optimizing operations through circular business models, traceability and optimized supply chains, and a sustainable customer experience.
For example, one major fashion retailer was already running its own data centers and sourcing only green energy. Now it’s transitioning to use wind power on Microsoft Azure cloud, and thanks to cloud transformation features such as autoscaling it will use even less energy in the future.
Navigating the barriers to retail innovation
Creating living systems via the cloud is first and foremost a technology play. But, in reality, the technology part can be relatively easy. The hard part is realigning mindsets to fully leverage the cloud and all that it offers. This is a step-change in how a retailer thinks about its business and how it uses new technologies to unlock trapped value. There are three key levers that influence success:
- Reimagine the business with technology. By using integrated technologies with embedded security, artificial intelligence and machine learning principles, consumer buying patterns can be detected, demand can be truly spotted and then plans can be adjusted. This is central to continuous innovation.
- Adopt an agile mindset throughout the organization. Retailers should look to create an agile organization in which application owners become transformation agents supporting the business – focusing more on user adoption and change rather than maintenance and release management.
- Empower talent. Pulled in the right way, the preceding levers will lead to greater empowerment, agility and flexibility—and drive a cultural shift across the business. That entails IT professionals getting out of the data center and into customer experience, working closely with their business and product owners.
The key point is that building living systems in the cloud isn’t just about migrating more existing systems and applications to cloud platforms. It’s about using cloud flexibility to become a true digital retailer, able to adapt, innovate and respond quickly—and keep pace with what customers want in a fast-changing and unpredictable world.
Jill Standish is senior managing director and global retail industry lead at Accenture.