Nike gets its footing — in the cloud
With its epic product launches, Nike’s digital channels can get unprecedented levels of interest and demand. And crashes are unacceptable.
The athletic goods giant is on pace to hit $50 billion in revenue by 2020, a goal that Nike expects to hit with the support of its digital strategy, according to Mike Wittig, VP infrastructure, Nike.
Key to its strategy is Snkrs, an app that gives Nike fans mobile access to the brand’s most premium sneaker lines and enables users to set notifications to stay ahead of the game when it comes to upcoming releases, as well as tracking order statuses.
For those not in the know, Nike has become synonymous with high-demand sneaker releases, from Air Max to coveted Air Jordans. These limited-edition kicks generate such demand that they tend to sell out instantly — making it imperative for Nike to have digital channels that can scale to support spiking customer volume.
“A healthy launch is about 300,000 requests per minute, and this could climb to 1 million requests,” Wittig said at the recent Manhattan Associates Momentum conference.
Historically, the company relied on the support of multiple data centers. Nike would add between two and three hours of additional capacity into data centers to keep up with launches, however “bandwidth would sit dormant until we needed it,” Wittig explained. “We also selected locations based on project funding. It just wasn't efficient.”
Nike needed an elastic operating platform that could scale when needed it, and shrink when they didn’t. Based on this pre-requisite, the company began re-platforming its data centers to support its ongoing digital strategy — a move that is also better supporting critical product launches. With the help of Manhattan Associates, Nike began transitioning online operations to a cloud-based platform from Amazon Web Services.
Nike has been live with AWS for two months and is already seeing results. Besides enabling products to launch faster, the cloud platform automatically increases bandwidth during product launches to support volume growth, improves the order capture experience and streamlines order processing.
These kinds of improvements will continue to move Nike’s digital strategy forward, especially as it looks for new ways to engage shoppers on-the-go.
“We need to be a technology-based company if we want to survive, especially since shoppers don't go to the mall like they used to,” Wittig added.
Study: Automation puts millions of U.S. retail jobs at risk
Automation may be mission-critical to operational longevity in the retail industry, but it could be creating a significant pool of “stranded workers.”
Six million to 7.5 million retail jobs likely will be automated out of existence in the coming years, leaving a large portion of the retail workforce at risk of becoming “stranded workers.” Retail cashiers are at highest risk for automation technologies, and women hold 73% of these positions.
That’s according to a new report, “Retail Automation: Stranded Workers? Opportunities and Risks for Labor and Automation,” conducted by Cornerstone Capital Group and commissioned by the Investor Responsibility Research Center Institute. The report identifies the structural factors catalyzing change in the retail industry.
The report details the technologies retailers are deploying, looks at the drivers of automation, and provides a framework to analyze the automation strategies of 30 large retail companies. In some cases, technology is complementing labor by freeing workers from mundane tasks and facilitating a more personalized customer experience. In others, technology has the potential to automate a significant part of the sales process and render a range of jobs redundant. Taken together, store closures and technology have the potential to dramatically alter the employment landscape in America.
When it comes to adopting in-store technology, most of the surveyed companies are considering solutions such as mobile devices, self-checkout, digital kiosks and proximity beacons. In addition, sensor-based checkouts and smart shelves are a growing technology, as found in Amazon Go stores.
What many people don’t realize is that 36% of retail workers currently receive some form of public assistance, and the average retail worker is 38 years old. Contrary to perceptions, 71% of retail workers are full-time employees.
The study also indicates that Walmart and other large retailers have greater market share in communities with less than 500,000 people. If employment trends correlate to market share location, retail automation by retailers could disproportionately impact these smaller communities.
“The retail landscape is changing rapidly and investors need to understand the social and governance issues impacting valuations for public companies in this sector,” said Erica Karp, Cornerstone founder and CEO. “Retailers are facing a perfect storm: they need to balance demand for wage increases with the negative optics of future job losses. The winners in retail will be companies that provide recruitment, retention and training for workers and innovate with forward-thinking future store strategies.”
Study: Innovation will drive the unified shopping experience
E-commerce and brick-and-mortar retail environments continue to merge, and retailers are in the hot seat to optimize the customer experience.
As a result, the need to adopt innovative technologies to engage shoppers has never been stronger. This was according to the “2017 Customer Experience/Unified Commerce Benchmark Survey” from Boston Retail Partners.
The priority for 55% of retailers is to increase customer loyalty. They are doing so by improving mobile shopping and creating a unified experience across all channels, the study revealed.
“The customer experience in a unified commerce world is much more complex than it is in a pure play e-commerce or brick-and-mortar retail environment. We are seeing retailers map out the entire customer journey to design the optimal customer experience,” said Perry Kramer, VP and practice lead at BRP. “This complexity expands exponentially as the proliferation of social media, the Internet of Things, artificial intelligence and machine learning influence the retail world and more specifically, the customer journey.”
That said, stores must now blend the best of both retail worlds. This includes meshing the sensory experience generally available in the physical world, such as touching and feeling merchandise and personally interacting with a knowledgeable associate — whether simply with an individual or a combination of AI and human characteristics – alongside the unique and personalized shopping experience that is commonplace in the digital world. As the physical and digital worlds merge, they will be forever intertwined as the industry moves into the future, the study said.
To reach this goal however, retailers must adopt the following customer experience capabilities:
Educate. One of the areas of greatest improvement is the offering of social media as a research option for customers to learn more about the brand and products. Overall utilization is up from 73% of retailers utilizing it last year to 92% this year. However, many retailers indicate that their current social media offerings need improvement.
Engage. Most retailers have plans to implement new technologies to identify customers via their smartphones, mobile applications and other emerging technologies. Within three years, 59% of retailers plan to use Wi-Fi and 63% plan to use mobile apps to identify customers in their stores.
Execute. A majority (67%) of retailers are offering a consistent product assortment across channels; however, many retailers are still struggling with manual processes as 43% indicate the processes need improvement.
Enhance. Retailers realize the importance of utilizing customer insights gathered from social media as 89% of retailers are now using social comments as a critical customer satisfaction measurement, up from 59% last year.
Enablers. Enhanced networks are a critical requirement for a unified commerce environment, and 76% of retailers plan to enhance or replace their network within the next three years.