In January 2017, Accenture reported that retailers’ investments in cloud technologies topped $15 billion, up more than threefold over 2011 levels. Retailers, Accenture noted, were “recognizing the transformative role cloud computing plays in today’s digital world.”
For retailers of any size, choosing the right cloud model is as essential as choosing to move to the cloud itself. Those who can’t innovate, scale and serve their customers fast enough risk being left behind – and fast. Once a retailer decides to embrace cloud technologies to innovate and drive their business, the question then becomes – which type of cloud?
Before diving into the different types of cloud models, here’s a quick primer on just three of the key business drivers for deploying cloud technologies:
Growth. Is there anything more important? Growth is the primary goal for brands, and growth is simply not possible without a technology infrastructure that can handle high traffic, spikes in traffic, product assortments and large product catalogues.
Brand Innovation. Competing on price is a losing proposition, so retailer must leverage flexible technologies to exploit their most powerful differentiator – their brand. Cloud enables the retailers to quickly build unique online shopping experiences.
Speed to Market. Simply put, cloud technologies help retailers launch new sites and brands, and expand into new geographies faster, accelerating time to value across all unified, global commerce channels.
Of course, choosing the right cloud model is not a technology decision but a business decision. It can be complex and confusing, and retailers need to understand the difference between the different types, to ensure that the technology supports broader strategic business objectives. After all, cloud is quickly becoming a key differentiator in all aspects of retail from operations, merchandising and marketing to supply chain, sales, service and support.
The primary types of cloud models are: single-tenant licenced cloud, where an application is deployed across a number of customers on a subscription basis; managed service provider, where retailers have their own instance of an application managed by an MSP; homegrown or DIY cloud, which is typically an amalgamation of different, highly-customized cloud solutions; and finally, the multi-tenant cloud model, where all users share a centrally maintained infrastructure with a single code base.
Salesforce Commerce Cloud is built on the latter, designed specifically for growth, scale is at the heart of this model. And because each customer is on the same version of the software, everyone benefits from a more stable infrastructure, with fewer bug fixes and less operational disruption. At the same time, the model enables continuous innovation in the form of new features delivered seamlessly and predictably throughout the year. That means that retailers can always take advantage of the latest enhancements and trends in digital commerce
How scalable is Commerce Cloud? The answer to that question was never more evident than holiday 2017, when retailers on our platform saw a 40% YoY increase in traffic on Black Friday, a 50% increase in orders, and a 60% increase in requests. Some leading merchants served up 4,000 page views per second and executed 580,000 orders per day!
It’s this type of scalability and stability that is driving the digital business at Kendra Scott, the billion-dollar jewelry and lifestyle brand who replatformed on Commerce Cloud, and in 2017 said they “sleep at night without worrying about the site” knowing they “have the bandwidth to cultivate their rapidly growing business.” Further, Kendra Scott is planning to leverage the architecture to quickly expand its business internationally.
In a just-released report on IT spending trends in retail, Retail Systems Research found that 51% of respondents rated cloud applications as a high IT spending priority. More impactful, though, is the finding that 70% of retail “winners” (those growing faster than the market) strongly agree with the statement that cloud technologies will help them be more competitive, while only 49% of laggards (those growing at or below market rates) viewed cloud as a strategic advantage to their business.
There’s no question that, regardless of industry, cloud technologies are becoming pervasive and creating new opportunities to drive growth. There’s also no question that not all clouds are created equal. Which one is right for you? Download Your Guide to Commerce in the Cloud for the whole scoop.