Retail Success Requires Boosting Operational Efficiency

By: Nick East, CEO, Zynstra

Nick East, CEO, Zynstra

The world of retail is changing, driven by a significant shift in consumer demands. Just look at the likes of Amazon Go, a revolutionary retail space that delivers the kind of effective, frictionless experience that shoppers are now craving.

From an insider perspective, these developments have led to increased pressure on Chief Digital Officers, Chief Information Officers, Store Operations and other senior decision makers to shape this in-store revolution—totally redefining what the physical retail space is capable of—while simultaneously driving cost savings and operational efficiency.

This is not the only problem weighing heavy on the shoulders of retail decision-makers. On top of this lies the need to determine how these stores can be leveraged to further instil and support brand values, and to build a platform for innovation that will entice shoppers of all ages back into these bricks-and-mortar stores.

With all these challenges ahead of them, it is the physical store that still remains the environment in which there are the most significant savings and improvements to make. When one considers that physical retail sales will still account for 80 percent of all sales globally by 2025, it is no surprise that the battleground has moved to the retail edge—in the store where retailers meet customers face to face.

"To deploy at scale, management and operational processes need to be automated to reduce cost and risk"

The first step towards redefining and optimizing the in-store environment is to adopt an IT infrastructure that accommodates these needs, and this requires the consolidation of existing in-store compute resources. By enabling large-scale consolidation and reducing the physical IT footprint, retailers can benefit from a more efficient infrastructure that naturally drives efficiencies within the store.

This also enables centralized management and control of the IT infrastructure. To deploy at scale, management and operational processes need to be automated to reduce cost and risk. This Intelligent Automation is an essential requirement for a cost effective in-store infrastructure. Centralized control and management of infrastructure mitigates the expense of sending IT teams out to solve IT issues while also enabling the retailer to roll out new stores much more quickly. Intelligent Automation enables all patches, updates and upgrades of your IT Infrastructure across all stores to be automated, ensuring you have a more secure and consistent system.

Taking a look at this from a higher-level perspective, the consolidation of in-store compute can also bring about huge security improvements—this is due to the increased levels of currency and control afforded to retailers through centralised management, and the dramatic reduction in potential pathways for hackers to gain access to systems.

At the core of effective consolidation is virtualization—something that does not only have an impact on the back-office systems, but also important front-of-store technologies, including point of sale (POS) and self-checkout terminals. This allows retailers to virtualize their existing POS application onto a centrally managed store server while maintaining exactly the same appearance and functionality as before. This can help to massively improve POS terminal performance, with less downtime and reduced maintenance costs, and to regularly update and apply patches to individual terminals from a central point. It also helps to significantly extend the life of existing POS terminals, maximising the retailer’s original POS investment.

Another emerging trend within the world of retail that can increase efficiency and drive staff productivity is the use of portable POS tablets, which staff can use to take payments from anywhere within a store, thereby reducing and perhaps even eliminating lines. These virtualized and fully functional tablets are the ideal solution for those looking to introduce innovative tools into their bricks-and-mortar stores, and the operational advantages are obvious.

The potential of portable POS tablets can also have a major impact on the in-store customer experience. If staffs are empowered to be more productive and get out from behind the counter, this can often result in customers feeling more valued and satisfied with the interactions they’ve had with a sales advisor.

Finally, businesses cannot underestimate the importance of ensuring any technologies they adopt to improve efficiency are compliant. PCI-DSS is a key regulation for the retail industry—and makes compliance at the retail edge all the more important.

Conclusion

Retailers can no longer afford to have in-store IT systems be a drag on store costs and customer experience, especially when there are now simple solutions to this problem. Instead, they need to be leveraging their IT infrastructures at the edge, which can help to deliver a seamless customer experience while ensuring all technology in place is both efficient and cost-effective.