In Depth

Ahead in the Cloud: How cloud computing is revolutionising retail

More than just a way to share files, businesses across the UK are waking up to the retail opportunities cloud computing can offer

Cloud computing is the cutting-edge technology that lets you save information seemingly into thin air and share it seamlessly across all of your devices.

But The Cloud isn't just some remote hard drive. Yes, a big part of the idea is non-local storage, meaning if your computer or mobile phone dies you won't lose your files, but there is a great deal more potential in such linked-up, decentralised information management.

Businesses across the UK and the world, especially in areas like retail which serve an increasingly demanding and tech-savvy customer base, are just starting to wake up to the possibilities of what cloud computing can offer.

Most obviously, using remote computer systems that are maintained by expert third parties saves companies from buying all the expensive hardware and bearing the associated costs – repairs, staff, obsolescence – enabling them to concentrate on what they do best.

Take Dixons Carphone, Europe's largest specialist electrical and telecommunications retailer. Following the £3.7bn merger between Dixons Retail and Carphone Warehouse in 2014, the newly-formed group faced a challenge of truly mammoth proportions: consolidating its two existing IT infrastructures, each of which was gigantic in its own right.

Legacy IT systems are becoming an increasing burden on large companies (high street banks are another perfect example of this). As they age they become more expensive to maintain, but are also incredibly costly and labour-intensive to replace. The Cloud offers the solution.

In this case Dixons Carphone chose IBM to provide a "hybrid" cloud solution, combining a private remotely maintained network for back-office systems with a public system for more customer-facing applications.

"We know we can trust IBM Cloud to seamlessly integrate infrastructures of both companies into one hybrid cloud that will enable us to continue focusing on other parts of the business," said David Hennessey, IT director at Dixons Carphone.

But Cloud computing can offer benefits beyond simply upgrading computer systems. By enabling businesses to operate in a much more co-ordinated fashion, and offering the potential to access and analyse the "big data" available online to give an insight into consumer tastes, it is transforming how retailers interact with shoppers.

An example of this is Boots UK. Through a partnership with IBM and Apple, the retail pharmacy chain unveiled a next-generation cloud service that allows workers in any store to use an iPad to instantly check if a product is in stock.

If it isn’t, customers will be pointed to another nearby branch or can order it online for collection the next day. Effectively, the company said in a statement, the tool "will help even our smallest stores feel like a flagship shop".

Boots has rolled out an IBM-powered app for iOS called Sales Assist – and it does more. Boots workers can access everything from information about what is in stock, to recommended alternative buys based on what other shoppers are purchasing, all at the tap of an iPad screen.

Perhaps the best current example of the potential of cloud computing to change how retailers serve customers was the partnership between IBM and the Westfield shopping centre in San Francisco.

For Christmas 2015, the shopping hub used IBM's Watson cognitive computing technology to give shoppers a more efficient, streamlined, and downright intelligent gift-buying experience.

Watson is a system that "learns" how to respond to complex queries in any field, based on a cumulative analysis of huge reams of data. In this case, by inputting vast volumes of sales information and social media "dark data" into shopping tastes and habits, it was able to act as a personalised sales adviser.

Shoppers entered a few details on the person they were looking to buy for, with sliding scales relating to characteristics like how outgoing, analytical, or confident they are. Alternatively, they could type in a Twitter handle, allowing Watson to analyse the content of the person's tweets to pull out their traits.

Once the personality had been entered into the system, Watson would pull out gift suggestions based on patterns observed in similar people. And it was learning and honing its recommendations all the time.

This highlights another potential benefit of using The Cloud: it's not just a remote hard drive for backing up files. It can function as a sort of living, breathing, thinking database to analyse huge volumes of information and bring you the most relevant answer to any query.

This kind of analytical recall is being used by businesses all over the world even beyond retail, from shopping centres like Westfield to Australian oil services giant Woodside Energy.

Besides relieving the risk of on-site digital storage, cloud computing can help businesses reduce costs, find efficiencies, manage information and adapt their business to meet ever-changing customer demands.

It's a revolution in business – and it's just getting started.

Understand your retail customers and deliver the right experience at just the right moment to create unbreakable bonds with IBM Commerce for retail

Learn how the IBM Cloud is designed to transform data into new insights and opportunities

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