Sydney, Australia [October 31, 2018] – As retailers race to deliver more unique and personalised customer experiences, the use of Cloud, IoT and Big Data will accelerate in stores, online channels and distribution centres. However, one quarter of retailers still lag in the process of adopting new technologies and integrating them across operations to present a more integrated customer experience, according to a new report from Vertiv.
For the report, participants included executives from 50 of the world’s largest retailers, with a combined annual revenue of $953 billion USD in 2017. The study,“Into Uncharted Territory: Retail Transformation and its Impact on Digital Infrastructure”, co-sponsored by Vertiv and DatacentreDynamics, revealed a heightened focus on online retail, as businesses transform their digital resources and capabilities to address changes in customer behaviour. Over the next two years, the amount of data centre space dedicated to online retail – both on-premise and colocation – is expected to increase by 20 per cent, while cloud hosting would increase by 33 per cent to support store applications.
An important part of the retail digital evolution includes a massive transformation of distribution centres. The research suggests the number of distribution centres and warehouses will increase by about 26 per cent over the next two years as retail companies increasingly realign operations to meet consumer demand for online purchasing. The amount of data centre space dedicated to distribution/logistics is expected to increase by 10 per cent and the use of cloud hosting to support distribution will increase by 87 per cent.
“It's no secret that online retail is driving significant IT investment for retailers. However, as this study makes clear, digital transformation in the retail space is about more than e-commerce,” said Lucas Beran, analyst, data centre infrastructure at IHS Markit. "Today’s retailers are striving to improve the IT systems in their stores and distribution centres as they pursue impactful customer experiences across all interactions with their brand. More business-critical online, distribution and in-store environments require new approaches to physical infrastructure to increase IT reliability, speed time to market, hold down costs and reduce management complexity,” Beran added.
The survey confirms that more computing power is being moved into stores to support edge computing types of applications providing greater customer immediacy and influencing them at the point of use.
“Retailers are going to move more IT footprint into the stores, to communicate with customers and to influence them closer to the point of decision,” said Martin Olsen, vice president, global edge and integrated solutions at Vertiv. “Our forecast for the next couple of years shows about two dollars going into stores and distribution for every dollar spent in the core data centre. And much of that data centre investment is being made to support online and stores.”
To support their transformation, retailers are adopting new physical infrastructure options that provide higher reliability and are easy and fast to deploy. These technologies are based on standardised, modular designs that are scalable with capacity demand and future-proofed for next-generation technological advances.
“In Australia and New Zealand, we’re seeing huge innovation in retail logistics, such as robotic warehouses and automated stock management systems, with a key focus on getting the product to the customer as quickly as possible,” said Robert Linsdell, Managing Director Australia and New Zealand, Vertiv.
“This is helping to meet the on-demand, ‘same-day delivery’ expectations which have become the norm in the US. Meeting these expectations in Australia poses a further challenge due to our dispersed population and vast distances between remote areas. But consumers are now starting to expect bricks and mortar retailers to adopt more comprehensive digital experiences in-store such as augmented reality and interactive displays.
“While there are some trials underway, Australian retailers should consider investing more in customer experience to remain competitive, particularly as online shopping continues to expand. The IT component needed to make this happen is hybrid cloud that includes on-site smart infrastructure, which will help retailers both deploy these kinds of services and keep up with the ‘real-time’ nature many have.”
To view the report, and for more information on Vertiv and retail digital infrastructure, visit http://go.datacentredynamics.com/WhitePaper18Vertiv-Ebook_Vertiv---White-Paper.html
Vertiv brings together hardware, software, analytics and ongoing services to ensure its customers’ vital applications run continuously, perform optimally and grow with their business needs. Vertiv solves the most important challenges facing today’s data centres, communication networks and commercial and industrial facilities with a portfolio of power, cooling and IT infrastructure solutions and services that extends from the cloud to the edge of the network. Headquartered in Columbus, Ohio, USA, Vertiv employs around 20,000 people and does business in more than 130 countries. For more information, and for the latest news and content from Vertiv, visit VertivCo.com.