Driven by unprecedented circumstances pushed on the global retail community via the pandemic, the retail industry has been thrown into a full scale customer experience revolution. It has shifted everything from technology, consumer habits and expectations, to strategic planning approaches by leaders within the space. And while eCommerce site performance was already a requirement, not a differentiator, its importance only increased as we all logged on to the one place we could carry on some semblance of our normal lives: The Internet. From 2019 – 2021 eCommerce sales in the United States grew a whopping 40% according to the Annual Retail Trade Survey (ARTS) published by the United States Census Bureau. With this explosion in online purchasing, where the options are endless and distractions abound, it has become clear the war for market share will largely be won or lost on the back of customer experience. And if your eCommerce site can’t perform… You. Will. Lose.

Long Live Customer Experience

With the gathering storm of recession forming the world over some business leaders are being driven by fear as they plan for 2023 and beyond, jeopardizing customer experience investments. This is a mistake that will result in heavy casualties. Global eCommerce is projected to reach $7T by 2025 with 86% of buyers willing to pay more for a great customer experience and 65% of customers finding a positive experience far more influential on purchasing decisions than advertising. Word of mouth is a powerful advertising tool that is born from high levels of brand loyalty. If my friend swears by a product or marketplace their opinion will influence my purchasing decisions heavily.

Despite the dire economic circumstances, opportunities to increase market share and grow revenue for retail outfits in 2023 and beyond are plentiful. One emerging trend to take advantage of is Phygital retail which combines elements of the physical and digital retail experience to construct a better omnichannel experience. To quote this article: “You may think your brick-and-mortar store isn’t succeeding, but a percentage of your online sales could in fact be coming from customers who first visited your store and then completed their purchase online. And by creating an omnichannel shopping experience you can continue engaging with those customers both online and offline to grow repeat sales.” Creating this type of customer experience will require ongoing investment in a retailer’s online marketplace and has begun to frame the continuing fight for retail dominance. It’s also easy to see how Augmented Reality (AR) could throw another iron in the fire as it were. Adapt or die.

However, increasing customer experience spend and overall budget tightening are not mutually exclusive. For example, the cost efficiency and elastic performance offered by operating in public cloud environments can have positive short and long-term impacts on your budget. And while technologies of the future such as AR and the metaverse are not yet mainstream, there is little chance of taking advantage of emerging markets when you’re stuck in the past managing your own hardware. Controlling costs is essential, but how to control them is just as important. Invest in customer experience and control infrastructure and operational costs. For those retailers that haven’t begun their cloud journeys, good things do not come to those who wait.

Elasticity is Critical to Cost Control

About half of all consumers expect a web page to load in two seconds or less and 40% will abandon the site entirely if it takes longer than three seconds. An often-overlooked piece of this equation is the elasticity necessary to be cost efficient. If your eCommerce infrastructure can’t contract during periods of low demand money is being thrown directly into the trash. Retail businesses that understand these realities have moved, or are in the process of moving, their mission-critical workloads to the cloud to gain elasticity and thus cost efficiency. People often forget elasticity implies scale-out and scale-in.

Another way to gain elasticity via the cloud is by taking advantage of other cutting-edge technologies and game-changing architecture solutions that were born in the cloud. These native cloud services were built with cost efficiency as a part of their DNA. Moving away from the traditional “three-tiered” architectures (consisting of web, application and data layers) and incorporating serverless, event-driven and microservices-based frameworks can eliminate performance bottlenecks, reduce operational overhead and rein in costs through instantiation, another form of elasticity. Case in point lower market demand should result in lower operating costs; if you only need an eye dropper why pay for a firehose? However, when dealing with the upfront capital expenditures required by maintaining on-premises hardware, this is impossible.

To be fair it’s not all sunshine and roses in the cloud and runaway cloud costs continue to be an issue. The difference is that in the cloud you can achieve the performance you need while also achieving cost efficiency during both high and low demand periods. For example, we know that the highest eCommerce conversion rates are when page load times are between 0-2 seconds. However, the amount it costs to achieve this page load rate with a user concurrency rate of 1,000 is vastly lower than it is for 10,000 or 100,000 users. If you’re always paying to support 100,000 concurrent users, even when you have just 10,000 or 1,000, then my friends you are losing the battle and maybe even the war.

Performance Liberation Enables Focus

Issues with performance of an eCommerce site will put enormous pressure on retail organizations and distract from building an exceptional and sustaining customer experience. However, as many retail outfits will find out moving their eCommerce sites into the cloud may pose significant problems or even be impossible due to architecture constraints and performance limitations (I’m looking at everyone with an Oracle backend). As such many will look to refactor their website to fix performance issues. An approach which is costly in time, organizational effort and dollars, offering no guarantee of success. This brings me to my shameless plug: Silk offers an elastic, cost-efficient and rapidly deployable alternative to the refactoring story being pushed on many customers by their cloud providers. The Silk DB Virtualization Platform will cut your migration timeline into the cloud by an order of magnitude, while providing a cloud agnostic rostrum upon which your customer experience can shine. Find out more by checking out our solutions for retailers. But I digress, not needing to worry about whether your eCommerce site is performing will grant your organization the opportunity to achieve clarity of vision and execute.

Future-proof Your Customer Experience with Data

The only way to maintain an elite customer experience is to generate valuable consumer data and gain accurateinsights from it. And the best way to do that is by running eCommerce sites on public cloud infrastructure and services. It’s easy to understand why taking advantage of insight generating technologies like Artificial Intelligence (AI), Machine Learning (ML) and Deep Learning (DL) can have a significant impact on retail businesses across industry. What’s not as apparent is how leveraging on demand cloud services for testing can help you make the most out of your data while saving time and effort.

Consider a new ML algorithm or service that promises to be a gamechanger. In the cloud development teams can immediately start playing with, testing and researching the service with minimal cost. If that service shows promise, it’s easy to expand these informal tests into a larger effort and Proof of Concept (POC). Otherwise, the team can simply walk away with no significant time or money wasted. This is not possible when managing hardware in your own datacenter. The cost and effort required to simply get the software deployed (which may include specialized hardware) is herculean in comparison and comes with sunk costs that can be significant. The more services you’re able to test with less impact on time and budget the better chance you have at generating valuable consumer data and gaining insights from it.

The moral of this cautionary tale is that the retail industry is in a constant state of rapid change. Those who provide and sustain an exceptional customer experience will succeed while those who don’t will fail. And the only way to meet these expectations is with agility and foresight of which the cloud offers both… to those who can execute.

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