I just bought this pair of Steve Madden loafers on Amazon. God bless that nifty, little one-click ordering button.
Unsurprisingly, the news last week, if you haven’t heard, was that Trinidadians spent more than US$500 million shopping online in 2013. Figures for 2014 aren’t easy to come by, but I’d bet this year’s ham and grog that there will be no precipitous drop from the 2013 figure. If anything, Trinis spent more. (Update: It looks like I was right)
Five. Hundred. Million. US. Dollars. Let that sink in. And while it’s sinking in, let’s talk about what this means for you and your business, and why you need to take a harder look at your IT department.
In a few years, cloud computing has grown up from feisty upstart to serious contender for technology dollars. Cloud computing is basically where companies pay third-party providers on the Web to host their entire IT systems or some part of it.
No need for a room full of servers and equipment that’s expensive to maintain. Without compromising security, you “rent” the hardware and software your company needs online.
That’s cloud in a nutshell. And it’s gained significant traction in retail, led by the likes of Amazon, Forever 21 and eBay.
The money is going out. The boxes are coming in and piling up. Just look at the number of skybox companies offering you a free address in Miami or London.
You’re thinking, well, that is retail — I work in manufacturing.
Still, if you’re managing a company, if you lead an IT department, this is not a trend that you want to ignore. Here’s why this massive e-commerce spending should matter to your business and what you could learn from it:
Lesson 1: Consumers Have Embraced Digital Technology, So Should You
If you do business in this tiny country, can you really afford to ignore consumer behaviour when they spend US$500 million in a single year? No, you can’t. Well, you can. But you’d be losing money. And companies like Amazon, eBay, Gap and Zappos are not in the business of leaving money on the table. To make sure it never happens, they rely on cloud technology.
It’s how they deliver a seamless customer experience, whether you shop via your laptop or your iPhone. It’s how they scale.
Asos, an etailer I have bought from, has relied on the cloud to fuel its international growth, launching sites in China and Australia according to its Chief Information Officer Peter Marsden. This is useful for local manufacturers and exporters who plan to expand to new markets.
With its built-in economies of scale where you pay as you go, and pay only for what you use, cloud technology enables business expansion and lets you scale up and down as required.
The retail industry is telling us that customers want to do business the new way. Local retailers have been slow to react. But you can’t afford to ignore this any longer. It starts with your company’s IT systems. It’s just a matter of time before the convenience of shopping online for personal items shifts to demands on local and Caribbean businesses regardless of your industry.
Lesson 2: Cloud Technology Leads To Business Innovation
Technology trends are contagious. I am not the only one at my house shopping online. My wife prefers to buy her shoes via the Zappos iPhone app.
She swears the app lets her do everything but walk around in the shoes; she's able to use her Amazon credentials to sign-in at Zappos and she can get the item for the same price on both sites.
And she’s right. A lot of great things happened since Amazon acquired Zappos in 2009. The customer experience on both sites has just gotten better and better.
Amazon’s — and Zappos’ — promise to its customers is this: order from anywhere, we’ll ship from anywhere. How might this kind of cloud innovation apply to a local conglomerate like, say, the Massy Group?
With cloud technology like Microsoft Azure, Massy could put powerful applications in their employees’ hands, allowing them to work anywhere, anytime. Visit a Massy showroom to test-drive the new X-Trail and someone at Massy United Insurance might be prompted via their smartphone to offer you a quote — even on a day they’re not at the office. Seamless customer experience? Yes.
The Group could leverage the agility of software as a service to deepen engagement with customers, whether they shop at Massy Motors or Massy Stores. They could use the cloud as the backbone of their recently-touted loyalty programme, sharing the data across the Group and using it to drive business decisions.
Companies with legacy IT systems cannot make this leap. A recent survey shows businesses which adopt full or partial cloud IT see greater innovation and improve their competitive advantage.
Employees aren’t waiting. First thing tomorrow morning, do a snap poll and find out how many of them have used products like Google Apps, Dropbox or Evernote to do company work, sometimes on their own devices — the consumerisation of IT.
Massy and leading Caribbean businesses need only consider the falling total cost of ownership (TCO) of cloud infrastructure and how technology is transforming the way we buy to understand what’s driving global demand for software as a service.
Make no mistake about it — this is not your mother’s shopping. And what’s happening in the retail sector is not isolated to retail. E-commerce, mobile, social media and cloud are the real game-changers for everybody.