Cloud is 2013’s Doorbuster: Smooth Your Holiday Cost Spikes With Technology
By Alex Brown, CEO, 10th Magnitude
I certainly don’t have to tell you that the 2013 holiday retail season is upon us, since you’ve probably had to plan your technology all year to handle the imminent spikes in in-store and online traffic. And, in just a couple of weeks, you’ll start planning your technology budget for 2014’s holiday season.
But what if I said that you don’t have to start your 2014 holiday season planning with a functional website assessment, a capacity needs forecast and a customer service review? Instead you could have an innovative envisioning session to brainstorm new technology strategies and mobile applications that would make costs smoother, customers happier and sales associates more effective next year from Thanksgiving to New Year’s? Sounds more appealing, right?
And you can make “nice to have” improvements that smooth holiday customer spikes without increasing your IT costs. Moving your data, storage, website, systems and other technology used to run your business and your stores into the cloud is the trick. The move to the cloud creates three critical dynamics:
1. Your IT costs come down because you only pay for the capacity you use. You no longer have to provision capacity and maintain staff and systems for your greatest use levels.
2. The savings you have now harvested from capacity going into the cloud can be reinvested into applications that mobilize your workforce to better serve your customers.
3. Your cost base shifts from a capex model geared towards hardware and datacenter provisioning to an opex model that keeps costs of IT in line with revenue.
All of a sudden, you have dollars coming back into your budget — how often does that happen? Let me describe a couple of the many interesting scenarios I see from that opportunity.
One area that seems ripe for improvement is the cost structure associated with hiring, training and outfitting seasonal workers. The challenge is to outfit these additional staffers quickly and easily with the selling tools they need. Once you have cloud-enabled your back end, customer and product information, you can provide all your workers real-time access to that data via a mobile application specifically designed to best address your customers’ unique shopping needs. Sales associates can use familiar, easy to understand, inexpensive mobile devices (such as phones and tablets) to scan products for information about stock, pricing, color availability, backorder status etc.
The increased network usage from additional sales associates only two months a year is no problem — cloud capacity scales up and down with your needs. Your sales force would no longer be tied to a dumb terminal and make customers wait through laborious stock checks. Depending on your particular business model, there are numerous other functions that you can program your application to handle.
Another exciting opportunity is in the social media space. Imagine a geo-aware application that offers customers close to your store promotional incentives. For example: I’m a customer who has given you my mobile number or email. As I’m driving through Anytown, where your flagship store is located, I get a text message offering me a limited time, targeted incentive. Additionally, you could do micro targeted promotions via social media.
These projects would have been unthinkable in the past because of the cost—particularly for a smaller retail chain. You would have needed proprietary technology and devices, and creating an application that harnesses data from multiple back-end systems and connects over mobile and Internet would have been next to impossible to do inside of your firewall. Now, cloud allows you to bridge information across multiple systems, seamlessly.
If you’re a major retail chain, you’ve no doubt heard of, understand and probably even use elements of cloud’s on-demand capacity and vast, flexible data storage. You may have even put your dev/test environments in the cloud and, if you’re on the leading edge of the curve, you’ve moved other workloads to the cloud as well. If so you should see the benefits in your P&L this holiday season.
If you’re a smaller chain, cloud may be a relatively unknown quantity. Think of it this way: If your website usually has 2,000 customers each week but in November and December the number goes to 25,000, why should you pay all year to have enough capacity for that huge spike that you only need for 30 days out of the year? With cloud the capacity is flexible and you only pay for what you use at any given time.
Whether you are managing a big cloud-savvy chain or small cloud-newbie chain, you are probably only seeing the tip of the iceberg of possibilities. In addition to the scenarios I talked about before, there are untold ways using the cloud can not only lower costs but also open the floodgates on innovation that can improve sales.
As retailers move more back end systems into the cloud, the data they aggregate will create exponentially greater opportunities for improving customer satisfaction. I would urge you to use 2013 as a jumping off point for ideas.
After the holiday season, ask yourself these questions:
• What technology levels do you feel you have to buy for next year?
• Where were the problems or limitations in your system this year?
• What convenience or service do you want to offer customers next year?
• What would make sales associates more efficient?
• What data do you wish your employees had immediate access to?
There are infinite opportunities that exist to not only smooth out costs but also improve sales and customer service by transitioning to the cloud. What can you imagine?
Alex Brown is CEO Of 10th Magnitude, a cloud software and services firm that exists at the critical crossroads of cutting-edge technology and exceptional user experience. They develop custom software applications, provide application management and enable Microsoft Azure migration to help businesses of all sizes innovate and compete more effectively.
Pep Boys continues expanding new format
The Pep Boys is converting 18 recently acquired Service & Tire Centers in Southern California to its new Road Ahead format and preparing for the grand reopening of six supercenters and five Service & Tire Centers in Tampa, Fla.
The company already converted nine Service & Tire Centers to the Road Ahead format this year, and reported that performance at those stores has been ahead of original projections. The company also plans to convert three additional smaller markets (20 supercenters) in the first half of 2014.
News of its expansion plans comes immediately following the company’s third-quarter results for the period ended Nov. 2, which saw sales decrease by $2.6 million, or 0.5%, to $507.0 million from $509.6 million for the prior-year quarter.
Comparable sales decreased 2.8%, consisting of a 0.5% comparable service revenue increase and a 3.6% comparable merchandise sales decrease.
Net earnings for the third quarter of fiscal 2013 were $1 million, or $0.02 per share, as compared to a net loss of $6.8 million, or $0.13 per share, for the prior-year quarter.
“Our strategically important maintenance and repair service business grew in sales for the sixth consecutive quarter,” said president and CEO, Mike Odell. "As the weather has turned colder, tire sales have started to improve, with mid-level price points and branded tires leading the way. Competitive pressures, however, continue to challenge sales of lower price point tires."
Walgreens takes preventive health care services to Maryland
Walgreens is further expanding the scope of preventative health care services provided by its pharmacists and now offering daily testing for cholesterol, blood glucose and body composition at more than 60 stores in Maryland.
Each test also includes a free blood pressure reading and personal consultation with a Walgreens pharmacist.
“Providing convenient, affordable access to health testing services is an important part of our commitment to disease prevention and chronic care management,” stated Jon Reitz, market pharmacy director, Walgreens. “As the most accessible health care providers, our pharmacists are spending more time with patients through consultations, immunizations, medication questions or concerns, health testing and other important services to help our customers get, stay and live well.”
Tests are available to those ages 18 and over at most stores during pharmacy hours daily with no appointment necessary.
Walgreens offers health testing daily at more than 4,100 stores in 41 states.
Walgreens pharmacists administer tests by fingerstick. Cost for testing is:
- Total Cholesterol – $35;
- Blood Glucose – $20;
- Body Composition – $15;
- Wellness Pack: Cholesterol, Blood Glucose and Body Composition – $65; and
- Blood pressure – free with every health test.
Test results are not for diagnostic or treatment purposes and are not conclusive as to the absence or presence of any health condition. Customers are encouraged to share test results with their primary care physician.
The National Heart, Lung and Blood Institute recommends that all adults have their cholesterol levels checked at least every five years. However, adults over age 45 or with other risk factors for heart disease or stroke should talk with their primary care physician about whether more frequent testing is necessary. Walgreens total cholesterol tests include a review of triglycerides, HDL and LDL.
According to the U.S. Centers for Disease Control and Prevention, one-third of U.S. adults have high cholesterol, which can significantly increase the risk of heart disease or stroke.
The American Diabetes Association recommends blood glucose testing every three years for people with normal levels or in good health with no risk factors. Those who are overweight and/or over age 45 should talk with their doctor about whether more frequent testing is recommended.
The American Heart Association recommends body composition tests to detect various health problems including high blood pressure and diabetes which can increase risk for heart disease and stroke.