As the leaves on the trees turn brown and prepare to fall, the retail industry enters its Golden Quarter – three months of increased spending that culminates with Christmas and the Boxing Day sales and has huge impact on retailers’ profitability for the year.
In recent years, the Golden Quarter has included a transatlantic import in the form of the post-Thanksgiving sales of Black Friday and its online-only follow-up, Cyber Monday.
These sales days generate huge demand from UK shoppers. Last year, UK consumers spent more than £3.3 billion over that weekend alone and this year it is predicted it could top £5 billion online.
Needless to say, the Golden Quarter is a time of key sales opportunities for retail businesses and many of them have been planning how to capitalise on it for months.
With so much retail business conducted online, companies have to be prepared and ready to meet the massive surges in demand and it could be considered the biggest technology challenge of the retailer’s year.
Retail opportunity, technology challenges
In 2014, disaster struck for a number of retailers whose online systems could not cope with the extra traffic.
On Black Friday 2014, the websites of UK retailers including Argos, Tesco, Littlewoods struggled under the load and Currys had to implement an online queuing system forcing customers to wait to place orders.
Revenue and profit was undoubtedly lost because loads were not predicted or provisioned for.
A sudden surge of interest on Black Friday, consumers jumping on a product in short supply on Cyber Monday or a great offer going viral can lead to a surge in demand, which, if not provided for within IT planning, can take a site offline at the most profitable time of the year.
>See also: Internet of Things: a retail perspective
However, it is evident that this does not need to be the case.
Amazon, which is generally credited for bringing the Black Friday sales to the UK, suffered no such outages and continued its sales with aplomb.
Indeed, the only problem befalling Amazon was a lack of enough delivery vans on the roads with which to deliver all the purchases.
It is no coincidence that Amazon is the company behind AWS, Amazon Web Services. Cloud services designed for just this type of surge in demand.
Power of collaboration
Times of high demand can also serve to exacerbate and accentuate the traditional lack of communication and understanding between the IT department and the business.
>See also: The desperate need for speed in retail today
The downside of this can be particularly damaging. Communication is key – the historical disconnect between IT and the rest of the business can be a recipe for disaster at this time of year.
IT and marketing teams must collaborate closely to ensure campaigns which have been months in planning, are not jeopardised by flailing IT support
Make the most of your retail cloud strategy
One of the biggest technology changes in recent years has been the growing adoption of cloud across the retail space.
It has brought significant benefits in terms of providing the scale, flexibility and agility to respond to variations in demand such as Black Friday much more easily than with traditional legacy infrastructure.
An effective cloud strategy provides retailers with the capability to match IT resources to demand as and when it occurs.
But it also ensures they are not saddled with the cost of infrastructure that they only need to use for three months of the year.
In addition, if sales during the Golden Quarter are lower than anticipated, they do not end up wasting IT resources they don’t need.
Adopting cloud is also a way to help shift internal IT resources from concentrating on routine maintenance (‘keeping the lights on’) to supporting the business to innovate and increase revenue.
Putting a cloud strategy in place that works with the retailer’s business does not occur in a vacuum.
If retailers want to exploit cloud’s scalability, they need to ensure their cloud strategy has very clear demand planning.
In addition, their cloud service providers need to be capable of providing scalability on demand as and when it is needed.
The responsibility is on IT departments to ensure their providers demonstrate preparation for peak periods, meet stress tests and demonstrate their contingency planning is robust.
Stay on the right side of the line
The Golden Quarter represents a tremendous opportunity for retailers.
In many cases, it may well dwarf the rest of the year in terms of its importance to their revenue.
But there’s no doubt that it can also be a huge challenge.
There is a fine line between success and failure in online trading and the velocity of trading can sometimes serve to accelerate the speed with which it can be felt.
An effective cloud strategy can make it easier to stay on the right side of that line and react more quickly, if the organisation is to navigate away from failure.
Sourced by Kevin Linsell, director of strategy and architecture at Adapt