Understanding the Emergence of Retail-as-a-Service (RaaS)

It shouldn’t come as a surprise to retail organizations to hear that consumer purchasing habits have drastically changed. With the majority of growth happening online, traditional brick-and-mortar stores are challenged with establishing an online presence, transforming their business model, and harnessing the power of innovative technologies. We’ve seen brick-and-mortar stores struggle to adapt to the increased presence of e-commerce as they transform their businesses, all of which have led to developments in Retail-as-a-Service (RaaS).

Similar to Software-as-a-Service (SaaS), companies purchase RaaS solutions from a provider and use them to advance their infrastructure. By doing this, retailers don’t have to add on the cost of building it themselves, which can be both timely and costly.

With RaaS, solutions are now accessible to companies that weren’t previously, allowing them to successfully embrace digital ecosystems. Earlier this year, for example, Kroger and Microsoft announced their partnership to develop and market a commercial RaaS product. This will provide increased functionality for retailers to gain insights, manage inventory, and improve customer experience. Let’s take a deeper dive into the benefits and what’s to come.

3 Impactful Benefits of RaaS Solutions

RaaS provides retailers with a variety of benefits, regardless of their size and where they are in the digital transformation process. Here are three benefits organizations can gain from leveraging a RaaS solution:

• Leverage and implement innovative technologies: Today, there are a number of innovative solutions promising to do big things for retailers. From artificial intelligence to blockchain, the list of capabilities is becoming endless. However, for retailers with limited budgets or smaller IT teams, incorporating these solutions into their businesses isn’t always that simple. This is where RaaS comes in. Instead of spending weeks, or even months, to develop and test the technology, retailers can purchase it from a vendor that already has a tried-and-true solution. This allows retailers to execute quicker than ever before and remain competitive in the changing marketplace.
• Streamlines innovative marketplaces: As e-commerce continues to grow as an industry, meeting the customer where they are and offering great experiences can lead to increased engagement and long-term loyalty. RaaS streamlines innovative marketplaces by reducing the cost, time and effort to build new solutions. In turn, companies can more efficiently use RaaS services to eliminate friction points that often lead to customer dissatisfaction.
• Provides real-time inventory: RaaS can also be applied to brands looking for real-time inventory updates, which benefits both the buyer and the seller. By integrating the technology needed to keep inventory updated, the buyer is able to avoid the frustration of being waitlisted and the seller can better understand what is or isn’t selling.

2019 and Beyond

The future of RaaS is bright. Supply chain innovation will likely be the most transformative area retailers will experience, with three major developments occurring. The first development will be improved deliveries, with superior management capabilities for optimization and efficiency. The second will be better quality of service, which will be customer-facing because as the supply chain transforms, the service received will improve as well. The final development within the supply chain will be connected experiences, which integrates everything from inventory control to delivery dates.

RaaS solutions are only just heating up. At the end of the day, RaaS developments will encourage brands to step up their game and compete in ways previously unimagined.

Rob Maille is co-founder and head of strategy and customer experience at CommerceCX, a company that helps organizations transform their technology and operations.