How Traditional Retailers are Evolving For the Digital Era

By: Gareth Bridges, Director, Digital Business, Equinix Asia-Pacific

Gareth Bridges, Director, Digital Business, Equinix Asia-Pacific

Technology has had an enormous impact on the retail sector – not only supporting the rise of online stores, but also in enhancing the operations of traditional bricks and mortar retailers. In today’s ever-changing retail world, many stores are realizing that the best way to keep pace with evolving consumer demands is to deliver a customer experience built for the digital age.

"From supply chain logistics and delivery handling, through to point-of-sale (POS) systems and loyalty programs, technology is becoming increasingly embedded in every stage of the retail journey"

The Retail Landscape is Shifting

Technology has changed the face of retail, particularly traditional stores, enabling them to provide more tailored and convenient in-person experiences that can match the growing expectations of customers. Many shoppers still value the attention and service available only to those visiting stores in-person, and expect to seamlessly move between online and in-store interactions.

The findings of the Global Interconnection Index, published by Equinix, highlight the increased digitization of the retail sector in Asia-Pacific, with Interconnection Bandwidth amongst wholesale and retail trade predicted to grow at a Compound Annual Growth Rate (CAGR) of 59 percent until 2020. This suggests that, in addition to e-commerce companies, traditional retailers are embracing digital business channels for improved customer encounters.

How Traditional Stores are Transforming

To elevate shopper experiences, traditional retailers have to revisit their technology infrastructure to design a future-proof architecture offering direct interconnection to their existing and prospective technology service providers. This not only simplifies the maintenance of existing infrastructure but, more importantly, enables the ability to rapidly develop and test new and innovative services, such as insights on customer preferences.

Many retailers have already begun adapting their IT infrastructure to enhance the shopping experience, embracing innovative technology strategies and integrating online with in-person interactions to improve customer service. From supply chain logistics and delivery handling, through to point-of-sale (POS) systems and loyalty programs, technology is becoming increasingly embedded in every stage of the retail journey.

Retail Transformation in Action

One of Hong Kong’s oldest department stores, Wing On, is a great example of an innovative retailer. In 2015, it formulated a strategy to modernize and keep pace in a competitive market, part of which involved revamping its customer loyalty program and upgrading internal systems to improve customer experience. In order to achieve this, Wing On needed to update its technology capabilities and this resulted in a three-year program to help transform both the in-store and the mobile experiences of its customers.

To execute that strategy, Wing On needed a long-term partner who could provide the underlying infrastructure required to support its customer experience and business modernization objectives. This warranted a full technology refresh of Wing On’s core systems - from networking and servers through to ERP and point of sale (POS) systems, to lay the foundations for a digitally-enabled business. Initially, the plan was to place these applications in the public cloud. However, this resulted in connectivity and long-term cost concerns as the transaction volumes increased, therefore they decided on a hybrid strategy.

Wing On is now using Equinix to host its business-critical data and applications, and gain access to a rich ecosystem of partners and providers to help accelerate its digital journey. Using Equinix Cloud Exchange Fabric™ (ECX Fabric™), Wing On now integrates its cloud-based loyalty program and on-premise POS application, resulting in reliable, high-performance connectivity between systems, ensuring customers now enjoy smooth, uninterrupted transactions.

Wing On is now on the road to digital transformation and is able to modernize its key internal and customer facing solutions. By re-architecting its IT infrastructure and adopting a hybrid cloud approach, it has boosted its competitive advantage thanks to an improved customer experience - and realized significant cost savings of over 60 percent in the process.

Enhancing Retail Experiences with Interconnection

Today’s retailers need to embrace a modernized strategy supported by infrastructure designed for the digital edge. In this way they can have direct access to the partners they need to connect with, and can guarantee the fast, secure, low-latency exchange of information needed to be competitive in an expanded marketplace and deliver great service both digitally and physically.

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