Published June 9, 2020
The past few months of the coronavirus pandemic have merely accelerated what we already know: Rising labor costs, coupled with day-to-day infrastructure, support and maintenance costs, continue to eat into the bottom line as operational efficiency erodes. Already changing consumer buying habits are changing even more due to social distancing, whether picking up at the curb, looking for full-service fueling, opting for click and collect, home delivery or grab and go.
All of this puts enormous pressure on grocery and convenience fuel retailers.
Trying to balance the number of staff you need to keep the business running while keeping employees and customers safe and secure is no simple task. Social distancing regulations and cleaning procedures are changing how you communicate with customers. But that’s just the tip of the iceberg.
Everyday, retail IT departments are challenged by operations and marketing departments to deploy new technology at speed due to the impact of coronavirus. Their customers have to experiment with new ways to shop and buy, and these habits will last into the future. Unless retailers can keep up, they will get left behind.
At times like this, brand loyalty is a tenuous proposition as customers are prioritizing the fastest, most frictionless and touchless purchase option that they can find. The longer this goes on the more likely they will stick with their new tried-and-tested method. And for retailers hoping to keep up, there’s only one word that matters: flexibility.
This new normal is fundamentally changing retail, with the drive for automation and frictionless shopping accelerating at warp speed. As a retailer, you’ll need to deploy more technologies, manage higher workloads and process and analyze more data in real time while squeezing better performance from IT resources with lower latency and higher efficiency.
If that weren’t enough, you also have to figure out how to do it all on a lower cost curve – and faster than ever before. Although the surge in contact-free pickup and delivery is tied to the current pandemic, it’s likely they'll remain popular well after the crisis subsides. So you’ll need to maintain these services while keeping a tight rein on labor, operational and systems integration costs.
Achieving this is no simple task if you, like many retailers, face an underlying problem: legacy store infrastructure that can’t keep up with the pace of the market, particularly during a time of unprecedented change. IT infrastructure for many retailers is not only outdated—it’s too complex, too patched, too expensive to maintain. This is because the majority of retail store technology is device-based, or “thick” deployed, meaning that there is a software application and operating system installed on every individual terminal or touchpoint throughout the store.
Any time you need to change or update something, or add a new store, you need an entirely new installation of both the application and OS...on every single device. This means you likely have an unwieldly proliferation of in-store IT hardware and software, skyrocketing your maintenance costs and creating a support nightmare.
Say you want to roll out an upgrade or new application across hundreds or thousands of stores. The time and cost needed to install, maintain, integrate and manage the deployment—with dedicated IT staff that have to visit every site—could be so expensive and complex that you, like many retailers, might abandon the deployment entirely. This cripples your ability to innovate and compete, especially at such a disruptive time when speed to market is critical and travel is restricted.
And speed of deployment is just one issue. Take, for example, mobile POS tablets. Many convenience and fuel retailers are adding mobile POS so associates can provide frictionless checkout outside the store—providing a memorable, differentiating experience. But the cost of these new devices, delivery and staff training can become significant. Plus, the process of integrating the mobile POS tablets with legacy POS systems and peripherals—and ensuring they meet PCI-DSS compliance standards and security protocols—isn't simple. Couple that with the increased cost of technician site visits for device maintenance or replacement due to over-zealous cleaning and you start to get the picture.
Online orders coupled with home delivery are another example of today’s must-have fulfillment options. And, again, the inflexibility of legacy infrastructure can stand in the way. Third-party integration with the likes of UberEats, DoorDash, Go Puff and others all come with dedicated tablet devices, leaving associates to juggle multiple devices on the counter just to fulfill orders...and they’re all on disparate systems. This can lead to inefficiency, lost or delayed orders and general confusion for your front and back of house operations, not to mention additional hardware maintenance and cleaning requirements.
With rising costs and shrinking margins, it’s likely that all new IT projects will be scrutinized even more than in the past. Smart retailers will focus on how each project can enable their business strategy and equip the business to manage escalating rates of change, particularly in customer engagement models and operational execution.
Most retailers simply don’t have the time, resources or funds to invest in a complete IT overhaul—but doing nothing is not an option. The ideal solution is one that enables you to deliver modern shopping experiences and add new capabilities quickly...using your existing IT investments.
A software defined store strategy is that solution. Software defined stores use virtualization technology specifically built for the retail edge, enabling them to optimize their existing store IT stack and still migrate to a more open, agile and scalable infrastructure.
A typical store has software and operating systems installed on hundreds of devices, such as POS terminals, mobile POS tablets, kitchen production, servers and more, scattered across the store. In a software defined store, the software and operating systems are decoupled from each touchpoint and moved to a virtualized edge server inside the store.
By virtualizing all these store touchpoints, you're free to upgrade your hardware and software independently, add new technologies faster and easier—and do it all with less cost and risk. And, since you can access various applications from a single device (such as toggling from the point of sale to a back-office function, like inventory, on the same device, without having to leave the sales floor), your existing hardware is now multi-purpose.
You manage your in-store virtualized servers using a centralized control console that runs in the cloud. Now, entire stores can be remotely monitored and maintained as a single touchpoint and you can deploy new stores faster than ever before.
The main benefit of this flexibility is that you can move fast. If you're using third party delivery services, for example, the third-party app can be deployed to existing store hardware devices so your associates only manage a single device, and no additional hardware is required. Running the POS application on a virtualized edge server means it can run over the wireless network from multiple devices, such as a mobile POS tablet with full PCI compliance.
This less-is-more approach is true for any store system—a virtualized store IT ecosystem helps you reduce cost and improve efficiency, security and overall operations while minimizing your store IT footprint. Best of all, you can use your existing technology investments while creating an agile infrastructure that allows you to pivot as disruptions hit and modernize at your own pace.
The software defined store approach also simplifies what would otherwise be complex IT tasks. For example, thanks to the pandemic, retail automation is high on the retail transformation agenda. Whether it’s everyday support and maintenance of store technology, supply chain logistics, order fulfilment or real time data analytics, automation maximizes labor investments, drives down costs, improves efficiencies and enhances business continuity.
But achieving this level of automation takes more application workloads that need to run locally inside the store. This is where virtualizing front and back office store systems can be a game changer. With a software defined infrastructure, you can automate all software patches, updates and upgrades, ensuring a more secure and reliable system. And since you’ll have remote centralized control and management, you’ll reduce costly technician site visits while identifying and fixing store IT issues earlier.
Ultimately, the new normal of retail will be about flexibility—it's the only way to quickly adapt to an unpredictable future (contactless everything, anyone?). And this is where software defined stores will leapfrog the competition. Whether automating store operations, launching curbside pickup or adding new ways to shop in-store, having a flexible store IT infrastructure that’s ready for anything is the only way to survive—and win.