In today’s retail environment, embracing digital transformation isn’t a choice — it’s a requirement. Future-proofing networks is the only way to stay competitive these days, and those not already optimizing the digital journey will be disrupted.
Beyond the retail apocalypse headlines — which are misleading, by the way — network inefficiencies affect today’s bottom line, too. Recent research from IDC found that IT organizations lose up to 39 percent of peak performance by neglecting to upgrade their networks, which also increases application management costs and administrative overhead.
With the lines between digital and physical retail more blurred than ever, it’s time to double down on digital transformation investments if you want to keep pace with change.
Technology That Matters
Because data fuels digital transformation, the real technology heroes are far less sexy. In-store offerings like Wi-Fi and the use of mobile point-of-sale (POS) systems have proven to be effective ways to increase sales and help illuminate real-time insights. A 2017 IHL Group study found sales increases of more than 650 percent and 90 percent, respectively, when these two technologies were implemented in stores.
Innovative, customer-facing technologies like Nike’s augmented reality (AR) shoe shopping experience or Neiman Marcus’ smart fitting rooms drive differentiated brand experiences and increased engagement in-store. However, these digital tools won’t be as impressive if they’re running on a congested legacy network design. For example, AR capabilities can diminish throughout when customers share images and videos on social media platforms. And with associates also sending high-resolution videos and photos to support clienteling efforts, the network can quickly become overloaded and impact application performance.
By 2019, nearly 80 percent of internet traffic is expected to be video-based. Retailers must ensure that user experience isn't compromised, or in-store digital investments will fall flat.
4 Steps to Real Digital Engagement
Technology isn’t to blame for creating a poor user experience; the fault rests in not architecting the right network and infrastructure to support the best of digital engagement capabilities.
Before the holiday rush hits, take a moment to check your networking strategies for four crucial elements to better prepare for the year’s biggest shopping season and beyond.
1. Align digital initiatives and infrastructure.
It’s important to ensure digital transformation initiatives are in lockstep with networking strategy decisions. Taking this dual approach doubles revenue growth, customer retention and overall profit, yet only 20 percent of organizations currently do this.
Before rolling out any new technologies, make sure your network and infrastructure can support high-performing, secure user experiences to maximize your digital transformation's return on investment.
2. Consider SD-WAN.
While it's still in an early mainstream technology wave, SD-WAN (software-defined wide area network) is the latest networking innovation designed to dynamically support growing and competing bandwidth demands faced by enterprises. Retailers are the early adopters of SD-WAN deployments. Within a store environment, retailers need to support and prioritize mission-critical software such as system applications, Wi-Fi, POS systems, AR, Internet of Things devices, digital signage, kiosks, video surveillance, clienteling, and more in real time.
Suffice it to say, you’ll need all the optimized bandwidth you can get — and enterprises are getting the message. When omnichannel industry leaders start refreshing and optimizing their WANs, it’s a signal for you to do the same.
3. Optimize connectivity to your cloud service provider.
Cloud-based network architectures provide scalable, agile IT environments to not only better facilitate and support digital transformation, but also to enable unified commerce.
During busy times, such as Black Friday and Cyber Monday, computing resources can be scaled and provisioned on-demand without retailers needing to invest in physical equipment. This benefit of modern computing can only be realized if your connection to the cloud is fast, reliable and secure. Consider deploying a hybrid network with private, pre-established connections to the leading cloud service providers. Data transfers, synchronization and other critical workloads can be seamless, efficient and painless with dedicated connections to the cloud.
4. Reduce latency — it’s your worst enemy.
Today’s on-demand, real-time unified commerce retail environments require secure, efficient and high-performing network architectures. However, the most commonly leveraged encryption technologies have serious impacts on network latency and scalability.
As retailers only continue to increase data consumption, you must consider other encryption methods that don’t compromise performance, especially during peak season. Deploying in-flight encryption at Layer 1 (wavelength transport) vs. Layer 3 (IPSec) provides robust security without compromising network performance. In today’s hypercompetitive environment, you can’t afford to have security slow you down.
Digital transformation is important for everyone to embrace, from big-box giants to local retail shops. However, if you don’t have a secure and optimized network architecture in place, it will be a quick race to the bottom.
Susan McReynolds is a retail strategy manager for Level 3 Communications, a telecommunications and internet service provider company.
In the role of retail strategy manager for CenturyLink (NYSE: CTL), Susan McReynolds works with customers, analysts, and industry leaders to keep a pulse on the IT trends and challenges facing today’s omnichannel retailers. Susan provides thought leadership on topics related to cybersecurity, digital transformation and next-generation networking strategies to help retailers keep pace with change. Prior to joining CenturyLink, Susan helped guide national and global athletic brands in developing custom visual merchandising programs. She received both her MBA and undergraduate degrees from the University of Colorado at Boulder.
CenturyLink (NYSE: CTL) is the second largest U.S. communications provider to global enterprise customers. With customers in more than 60 countries and an intense focus on the customer experience, CenturyLink strives to be the world’s best networking company by solving customers’ increased demand for reliable and secure connections. The company also serves as its customers’ trusted partner, helping them manage increased network and IT complexity and providing managed network and cyber security solutions that help protect their business.