As an industry that is always under profit margin pressure, retail has been particularly challenged and disrupted by the rise of digitalisation.
The Internet has led to the growth of digital natives, upstarts who have built their businesses using a browser as a storefront and negotiated drop-ship arrangements with manufacturers, significantly reducing traditional opex models. The Internet has opened up market competition to global competitors, who even a decade ago could not operate, let alone compete, in a given market. It has launched hugely successful marketplaces, such as eBay, which have facilitated the introduction of micro retailers. This has given every consumer the ability to research every product available globally, view competitive price offers, and browse feedback from users who have already purchased the product.
Of course, traditional retailers have responded by leveraging their investments in physical stores as a competitive edge.
Enter the omni-channel and multi-channel retail business models. Both of these models propose that the customer be able to purchase through any available channel, whether at the store, from their desktop or on their mobile device. The omni-channel model proposes a seamless shopping experience as customers move between virtual and physical store environments, making purchases via e-commerce or in person, taking delivery of goods at home, or picking them up from a store.
The popularity of these business models has spawned a slew of solutions and projects to improve the shopping experience for customers, regardless of their entry point into the retailer’s ecosystem. Virtual assistants, CRM, automated marketing systems, digital cataloguing, mobile optimised web presence, and many other modern approaches have been essential to achieve this digital transition. That being said, there have also been significant changes within the physical stores. Technology solutions to improve the in-store experience have been prevalent. Digital signage and kiosks, upgraded demonstration facilities, self-checkout, customer information systems, loyalty plans, store WiFi networks, and pop-up stores are just a few of the solutions that are pressuring retailers’ IT teams to develop more efficient methods of managing and communicating with stores.
Traditionally, retailers would build a wide area network (WAN), connecting each store to a production and disaster recovery datacentre via a telco-provided network (usually a service called MPLS). Internet access for a store is provided by a single point of access and security from the data centre.
The high cost of these network links has meant that IT teams on constrained budgets are pressured to purchase the smallest link possible to service each store. In addition to the cost, MPLS connections or upgrades can take months to implement.
The traditional approach to building a wide area network has neither the agility nor the cost-effective capacity to keep up with the data demanded by the multi- and omni-channel models.
Augmenting or replacing this traditional retail network design using the Internet to carry data would cut up to 60% of the costs retailers pay to telcos every month for these networks. It would deliver greater agility, allowing new stores or pop-up stores to be added to the network in mere minutes (connecting via 4G services), rather than months, providing that data security, link quality and management concerns could be addressed.
A solution that addresses these problems is the Software Defined Wide Area Network (SD-WAN). SD-WAN is an overlay technology that allows retailers to flexibly and securely connect customers and employees to applications via the most cost-efficient source of connectivity available. Deployed at each store, office data centre or cloud service (AWS, Azure etc.) as software or an appliance, SD-WAN delivers:
SD-WAN secures broadband WANs edge-to-edge by ensuring that all WAN traffic is secured by 256-bit AES encryption while in flight across the SD-WAN overlay fabric.
Path conditioning ensures private line performance over the Internet by repairing dropped and out-of-order packets in real time for greater WAN efficiency. Many cloud-based application providers, such as Office 365 and Saleforce.com, have implemented SD-WAN solutions to optimise performance.
Retailers can rapidly and non-disruptively augment or replace their MPLS networks with any form of the Internet for ubiquitous, instant-on connectivity.
Visibility and Control
SD-WAN provides full visibility into both legacy and cloud applications, and supports business intent policies to secure and control all WAN traffic. Path control allows IT groups to define, by policy, which path is used for specific application traffic, as well as selecting paths based on the quality of the connection.
ICT Networks will be exhibiting and presenting the SD-WAN solution at the RetailTECH Expo on the 11th & 12th of May at the Melbourne Convention Centre.
Drop by our booth to see how an SD-WAN solution can improve your business or ASK US HOW.