Consumers are now accustomed to multichannel shopping experiences. But this doesn’t mean stores are going away any time soon. Amazon acquired Whole Foods for $13 billion, for example, underlining the fact that the leading online retailer recognizes a need for a strong presence on the high street.
The power of mobile and omnichannel
What is happening, however, is that stores are embracing digital touchpoints. According to the latest Worldpay Global Payment Trends report, mobile commerce (m-commerce) sales are set to grow 19 percent annually for the next three years, up to $2.3 trillion by 2022. Brands are looking to interact with consumers when they’re browsing their tablets or mobiles at home or in-store. Nike, for example, has debuted a new function on its app that recognizes you as you walk in the store and provides you with a tailored product selection. You can also reserve products to try on.
According to JP Morgan, omnichannel shoppers spend 3.4 times more with a brand than single-channel shoppers. It is little surprise, therefore, that stores have evolved to offer a differentiated experience to consumers with sales assistants trained to offer proactive advice. At the same time, they’re acting as fulfillment centers to reduce the cost of home deliveries, which are often provided for free, impacting margins.
Online sellers must also become adept at product segmentation, holding only their most popular stock keeping units (SKUs) in distribution centers nearer customers. These strategic delivery centers can provide same or next-day delivery and lower market costs.
Learn more: 5 ways to transform retail logistics
SD-WAN – connecting retail
Finding a network that can support diverse store, warehouse and delivery hub locations across the globe for use by both staff and consumers can be a major challenge. We’re seeing a trend towards free in-store Wi-Fi, which is not only there for consumer convenience, but also supports customer engagement through brand and in-store apps. The adoption of cloud applications for point-of-sale transactions and stock management is also ramping up network demand for retailers. Retailers need a networking solution that is robust, fast, secure and scalable.
Software-defined wide area networking (SD-WAN) can tackle these critical needs head on. Agility, in addition to performance, can be achieved by the use of Internet connectivity to support any kind of business workflow - managed by SD-WAN technology. This way, Internet connectivity could be an addition or an alternative to the MPLS IP-VPN connectivity that retailers have been using for years. At the same time, by using Internet-only connectivity, retailers don’t need to risk Internet outages, which can cause costly disruptions – potentially preventing them from taking payments at the tills.
Simplifying and securing retail networking
SD-WAN applies software-defined networking (SDN) to WAN connections. It comes into its own in its ability to easily and effectively connect dispersed offices over multiple geographical locations. By using the best network route available (Internet or MPLS depending on site configuration) and enabling different types of traffic to be prioritized, the quality of service is assured. This ensures that a seamless user experience is maintained throughout the shopping journey.
A combination of fast delivery of Internet connectivity and agile deployment of SD-WAN equipment allows retailers to get new sites up and running in days rather than months. This means that retailers can easily adopt a flexible and dynamic store location strategy. For example, it becomes much easier and faster to open up pop-up stores to coincide with events or try out new locations.
In addition, if network devices need swapping out, it is even easier because SD-WAN works with a centralized portal that allows changes to be deployed on the network simultaneously. The network can be monitored 24/7 to predict if there are emerging network issues and take action to mitigate the problem. At the same time, SD-WAN reduces the footprint of on-premises hardware, which decreases maintenance costs and downtime.
SD-WAN also potentially (depending on the equipment/vendor) addresses critical security issues associated with retail, which by its very nature deals with large amounts of personal and financial data and traffic. Some SD-WAN solutions come with advanced security features such as encryption and tunneling which can work alongside a retailer’s current network defenses.
For these same reasons, SD-WAN is an ideal solution for setting up fulfillment centers and warehousing facilities. By prioritizing bandwidth-intensive retail workloads, such as retail analytics and video surveillance, SD-WAN can improve bandwidth efficiency and optimize operations and productivity, for example.
Dubai-based Majid Al Futtaim Retail, which holds the exclusive franchise rights to operate Carrefour in 38 markets across the Middle East, Africa and Asia, is deploying Flexible SD-WAN from Orange Business Services. It was quick to see the potential of SD-WAN as part of its business expansion plans, while helping it overcome many of the issues cited above. SD-WAN is now central to supporting its e-commerce and omnichannel strategies, while providing rapid scalability to support its smart retail applications, such as SAP for its e-commerce platform.
Building smart stores for the future
Retailers are on a transformative journey to integrate online and physical stores. The goal is delivering an unmatched customer experience. SD-WAN brings the responsiveness, agility and security that retailers need from their networks and that makes a compelling case for its adoption as part of this shift in retail thinking.