Turning to the Cloud

Jay Yanko, managing principal, Verizon Retail & Distribution, New York City, jay.yanko@ verizonbusiness.com

While 2011 may be half-over, there is still plenty of time to incorporate the right technologies to streamline retail operations by yearend. Chain Store Age spoke with Jay Yanko, managing principal of Verizon Retail & Distribution, about some top technologies for lowering costs and upping efficiencies.

How can a retailer decide which technologies will lower costs, maximize efficiency and create value?
It’s not an easy question. I can tell you that we’re seeing many retailers turning to the cloud. Even with ambiguity around an exact definition, the cloud is a key way for retailers to streamline their IT operations. Previously, the cloud was a symbol on a diagram, a way of representing the communication infrastructure between two systems that were not on the same local network. Today, it is a universal term used to describe billions upon billions of dollars of infrastructure — computers, routers, switches, copper, fiber — operating systems and applications that make up and operate the Internet.

How does the cloud help retailers?
Cloud allows for the centralization of operational systems and aggregation of metrics from disparate business processes. This creates a more efficient and costeffective deployment of systems and people, as physical and logical functions can be pushed up the technology stack. The cloud also allows instrumentation, such as sensors and other business intelligence tools, to gather information about and monitor lower-level operations and then make their outputs more visible to decision-makers. New technologies, centralization and services enabled by cloud allow for new business processes to be conceived, implemented, managed and monitored.

How else does the cloud help centralize the management?
First, the cloud means lower levels of integration with store-level systems because integration is intrinsic in the development and deployment of centralized systems. This reduces the effort required to connect to and gather store-level metrics and aggregate functions and provide better, timelier reporting. Centralized systems delivered as services also lend themselves to op-ex models. That becomes important as many retailers look for ways to shift their balance sheets. And lastly, centralization reduces the complexity of integration for systems and data as it is much easier to integrate a few systems based on services, rather than thousands of distributed systems.

Are there some key functional areas where retailers can take advantage of the cloud to centralize operations?
Absolutely. There are four main areas where retailers can centralize the management of IT operations: point of sale; task and workforce management; digital media management; and customer analytics.

To elaborate on digital media management, it is important to note that central management of content in the cloud minimizes work at the region or in-store. It also creates a consistent brand feel and awareness across stores.

For instance, retailers can tailor media experiences that are customized for the brand, season, time, weather, location and customer demographics. The issue, of course, is that this calls for high bandwidth. High-quality digital media is comprised of large files that need to be distributed to many locations for display. While bandwidth and timing of content delivery are concerns, they can be managed by scheduling delivery at low-network usage times and by only delivering updates and not complete refreshes.

Customer analytics allows for click stream in the real world. It provides the brick-and-mortar equivalent of click-stream data. When combined with click stream and central POS, this offers a complete view of consumers across all channels. Once again, video means high bandwidth, which can be overcome with systems that perform the analysis in the store and only aggregate the analytics information centrally. This increases the store footprint a bit but also provides on-site repository of video that can be repurposed for loss prevention.

Any final thoughts or recommendations for retailers?
All retail technologies out there certainly create challenges for retail IT professionals. The technologies we talked about today help cut through the noise. One thing to note is that all of these solutions are either consumer facing or a way to understand the consumer better, or a combination of both. Because at the end of the day, it’s all about the customer


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