TechBytes: Cloud computing trendspotting
Constantly feeling the pressure to innovate, more retailers are reaching for the cloud to stay on their game. As adoption accelerates, so are retailers’ expectations, making companies eager for new cloud-based innovations.
The following trends, gleaned during the recent Oracle Industry Connect conference in New York, reveal how platforms are evolving and what brands can expect from the next wave of cloud computing:
Increased growth of applications that extend the value of IoT
There are already 7 billion smart devices, and volume will grow to 50 billion devices in five years, according to Douglas Suriano, senior VP and general manager of Oracle communications global business unit.
To harness the rising amount of customer data flowing between these devices, from smartphones and tablets to wearables and appliances, retailers need solutions that can quickly process this information and apply it to customer-facing operations. While many companies already rely on the cloud to access data-driven applications, including artificial intelligence, machine learning and voice recognition, the next wave of cloud-based solutions will focus on evolving “intelligent” solutions, such as blockchain, biometrics, sentiment analysis and robotics. These applications will keep companies on the cutting edge, and improve how they engage customers.
Integration of “connected” applications within cloud platforms
As IoT experiences increasingly become a priority for retailers, they need easy access to supportive, data-rich applications. However, there are challenges to leveraging these solutions. In addition to not wanting to manage hardware and software on-premise, “these solutions are expensive,” said Luis Malave, VP of applications for Lucky Brand. “Retailers can’t spend trillions of dollars on systems, but we still need to be prepared for the changing connected landscape.”
As cloud providers begin marketing these solutions as standard components within their platforms, retailers will have immediate access to applications — especially solutions that can strengthen the customer experience, such as voice, AR and VR, and machine learning. An all-inclusive platform also eliminates the cost of software licenses or bolstering IT teams with dedicated data scientists.
Evolution of autonomous, “self-healing” platforms
The cloud is synonymous for automatically sharing application updates, upgrades and new functionality with users as soon as they are available.
To ensure these updates are secure, cloud providers will begin embedding self-diagnostic databases and machine learning tools designed to monitor and diagnose the health and security of all applications available on the platform. If an anomaly or an outage is detected, the database can run a software patch to repair the issue, a move that ensures the security and integrity of the business application for all users.
Monetized loyalty applications
Consumers expect more personalized experiences and access to information from social influencers — two factors that are taking a toll on traditional loyalty programs. As a result, retailers are reaching for the cloud in search of new, more flexible loyalty models.
Overall, retailers need to move away from mass discounts and promotions and instead adopt programs that reward specific shopping behavior. From subscription-based memberships to rewarding customers for sharing experiences on social media, loyalty programs will become more meaningful and personalized and retailers will find it easier to engage with customers.
Lucky Brand gets ‘scrappy’
Invention is the mother of necessity when it comes to Lucky Brand embracing the cloud.
The apparel retailer’s cloud strategy was not as methodical as other retailers. Indeed, it wasn’t even a choice. Rather, it became a critical option when Lucky Brand’s parent, Fifth & Pacific Companies, sold the retailer in order to focus on its core Kate Spade brand.
When owned by Fifth & Pacific, Lucky Brand operated under the Kate Spade umbrella, where it leveraged shared services for IT, finance and accounting, human resources and supply chain, and augmented its operations with legacy systems. After the sale, it had a transition services agreement that allotted it 24 months to be independent — and to operate its own systems.
With no formal IT team or transition plan in place, Lucky Brand quickly developed an IT strategy based on cloud-based systems and never looked back.
“We had a blank slate and decided to leverage cloud capabilities wherever possible,” said Luis Malave, VP of applications for Lucky Brand, at the Oracle Industry Connect conference. “We were scrappy in our approach, and had to get up to speed if we wanted to compete.”
Lucky Brand hired a CIO and put together a team that launched a cloud-based supply chain operation in late 2014, followed by corporate and retail applications in 2015. Since then, the brand has adopted a cloud-based enterprise resource planning system, financials, e-commerce and loyalty program.
Along with a rapid three-month return on investment on its initial applications, “the process taught us we can mange more with less people,” Malave said.
“People speculate that retail is dead, but it’s not,” he said. “Instead, it is evolving and changing, and this is forcing all companies to shift and learn to do things differently if they want to compete. We needed to change, and cloud solutions are helping us step up our functionality and level the playing field.”
Kroger promotes healthier eats with nutrition-based tech
The Kroger Co. is introducing interactive platforms, including an updated app, to guide customers as they make healthier purchase decisions.
Colleen Lindholz, president of the Cincinnati-based chain’s pharmacy division and The Little Clinic, said the initiative is part of an app update that will help tie a better-health-through-food program into the interactive platforms consumers are already using to navigate their shopping experiences.
“This is all in an effort to support the vision and mission that Kroger has, which is to help people live healthier lives,” Lindholz told Drug Store News at the recent National Association of Chain Drug Stores Annual Meeting. “We’re trying to meet the customer where they are and where they want to be, whether that be in the store or digitally online.”
In stores, Kroger is piloting a program that will staff each supermarket with a nutrition technician through the agency Besomebody Paths. These “techs” will be engaging, customer-focused employees who will work to raise awareness around healthy food choices and the pair of licensed healthcare professionals — the dietitian and the pharmacist — who can help tie those healthier food choices into a comprehensive disease state management program. A total of 18 dietitians will be active across Kroger’s footprint, Lindholz said, one for each of its operating divisions.
Kroger also is building healthy food guidance into its OptUp shopping app, which launched on April 30. “OptUp takes the items you buy at Kroger on your Kroger Plus card and gives you a total [shopping cart] score that shows you how healthy your basket is,” Lindholz said. Each food item and its respective health value is loaded into the app, along with suggestions for healthier choices on similar products for their next shopping trip.
Kroger is employing an algorithm validated by the University of Cincinnati to score each item on a nutrition scale of 1-to-100. The corresponding suggestions are designed to take shoppers along their health journey at a more gradual pace. “We’re trying to help our customers make better food choices, but not go from A to Z overnight,” Lindholz said. “If I’m eating [cookies] for the last five years and that’s my snack, you’re not going to take me to broccoli or even grapes if [cookies] are what I love. What’s great about this app is it suggests items that are higher in nutrients, [but] not that much higher.”
All of this will lay the groundwork for Kroger’s future plans for its dietitians, pharmacists and the food side of its business under the “Wellness Your Way” platform. “Just like our Simple Truth brand has become a $2 billion brand, we want to tie wellness overall into one platform so it becomes seamless for our customers,” Lindholz said. “We’re working on a long-term predictive analytics tool and the power behind some of the big payers.”
Kroger did a soft launch of the platform in February and plans to introduce that platform in a meaningful way in 2019.