According to Karl Haller, global leader for IBM Consulting’s Consumer Center of Competency, it is important to remember that despite the buzz around digital in retail in recent times, “the industry is still in the early stages of full digital transformation”.
Talking in January following consumer research from the IBM Institute for Business Value (IBV) and US trade body the National Retail Federation (NRF) which showed that shoppers are as demanding as ever on retailers, Haller advised the sector to speed up its evolution.
“AI [artificial intelligence] and hybrid cloud, along with intelligent workflows and other ‘next-gen’ capabilities, should move beyond the pilot stages and become deeply embedded into retailers’ operations to help obtain the agility needed to run a successful business,” he says.
“These capabilities can be essential to improving self-service options, enabling store associates to play more strategic roles, deploying hyper-localised assortments at scale, operating a multi-speed supply chain, and delivering on ESG [environmental, social and governance] commitments.”
The IBV-NRF research suggested that 58% of consumers have used self-service, half have used order online but collect in store services, and 47% have used mobile contactless payment – elements representing the future of how retailers must serve customers.
From the 19,000-plus people surveyed, 27% reported hybrid shopping as their method of choice – meaning they use both store and online for their shopping – and the Gen Z consumers surveyed were most likely to be “hybrid shoppers” compared with other age groups. Sustainability-driven purchasing and conscious consumerism are also gaining ground, according to the survey.
“Retailers can improve hybrid shopping by integrating their digital and physical operating platforms to help deliver an experience that leverages the strengths of each,” says Haller.
“Retailers should also understand which touchpoints are most important to which customers, and be prepared to make near-real-time changes as their needs shift. This requires robust customer data platforms designed to collect and analyse information from internal and external sources to help them run the business at a more localised and individualised level.”
Well, retailers are addressing the situation, with some partnerships aimed at supporting these goals announced in recent weeks, showing that the industry continues to embed additional tech and expertise to carry on its required transformation.
‘Highly automated processes’
Sports goods retailer Decathlon has started working with Aiven, a company that describes itself as combining the best open source streaming and data management technologies with cloud infrastructure.
The aim is to accelerate the retailer’s transition to the cloud and a microservices model by providing database-as-a-service (DBaaS) support.
Decathlon says it chose Aiven to turn its open source data management technologies into a highly resilient platform configured for DevOps.
Jérôme Dubreuil, Decathlon chief digital officer, says: “Standing out in an increasingly competitive retail sector requires developing an IT environment based on cutting-edge, cloud-native technology and highly automated processes.
“At Decathlon, service and technology innovation is rooted in our daily activities. It is why we form alliances with strong, multicloud partners like Aiven, providing DBaaS as the technological and operational linchpin of our cloud platform engineering global strategy.”
Aiven says it will turn open source data technologies such as Kafka, PostgreSQL, MySQL, OpenSearch, InfluxDB and Redis into what the two companies hope will be easily consumable, highly available and scalable data solutions.
Pierre Hilbert, database product owner at Decathlon, says the partnership enables the retailer to rely on third-party expertise for some applications, particularly databases, while allowing it to put more effort into the user experience (UX) for the benefit of customers.
“This work is carried out by our multidisciplinary Decathlon teams – architecture, security, performance, integration – and our developers,” he adds.
Via the Decathlon Technology branch, Decathlon has been able to accelerate its digital transformation in recent years, tackling some of the new technological challenges and consumption patterns that the IBV-NRF research highlights, and of which IBM’s Haller speaks.
Decathlon’s tech arm has more than 3,000 engineers in over 50 countries, and their work covers developing tools, systems and experiences focused on helping the business drive a better UX for customers.
And this month the retailer will have a new leader, with Barbara Martin Coppola arriving as CEO to take over from Michel Aballea, who has held the top job for seven years. Coppola comes with a strong digital and business background, having held senior roles at Ikea, Google, YouTube and Samsung, perhaps pointing the way to further tech development and investment in the months ahead.
‘Reliable, scalable, efficient’
Decathlon’s efforts in critical business system investment come hot on the heels of building and tool supply company Toolstation choosing to work with open source database software and services provider Percona.
The work specifically revolves around MySQL managed services, and comes after significant digital growth experienced by the Travis Perkins-owned retailer during the pandemic.
Total UK sales were 45% ahead of 2019 during the company’s 2021-22 financial year third quarter, according to the latest publicly available results. The range of products available online and through the Toolstation catalogue was extended by about 1,800 items in the first half of 2021, and its Netherlands arm is experiencing traction from its click & collect service that makes goods available in stores within 10 minutes of being ordered online.
The company uses MySQL as part of its critical stock management, extranet, e-commerce and web applications, with its European e-commerce environment currently hosted on-premise and the remainder hosted on Google Cloud.
Percona is managing Toolstation’s MySQL installations and monitoring database management tasks, with the aim of ensuring that the retailer’s core applications can keep up with changes in customer demand and ongoing digital transformation at the business.
Like Decathlon’s work with Aiven, Toolstation is operating alongside Percona to help it to reduce critical incidents while allowing in-house technical teams to focus on core business challenges.
Stuart Mcgrogan, head of architecture at Toolstation, says: “Our MySQL databases are crucial to our business and our reliance on them has only increased in the past year or so as our e-commerce activities have expanded.”
He adds that Percona will help keep the retailer’s core applications “reliable, scalable and efficient”, while freeing up time for Toolstation’s IT teams “to focus on how to expand our digital services and keep up with customer demand”.
Martin James, EMEA region vice-president at Percona, says: “Customers expect a consistent level of service when they engage with an e-commerce site, or companies risk losing out to competitors.
“Within the wider retail sector, specific sectors like home improvements have seen huge growth due to people spending more time at home and investing in their space. For retailers looking to ramp up their digital growth, open source software can often deliver better performance without a huge price tag.”