Orginally Published by Retail Touchpoints
In the ever-evolving landscape of ecommerce, retailers face the ongoing challenge of adapting their cloud infrastructure to meet the demands of unpredictable consumer behavior. With online shopping hitting record highs during the most recent Thanksgiving holiday weekend, many companies often focus on preparing for this annual period of peak demand. Yet, increasingly, there are other peak periods, such as turn-of-the-season shopping, Mother’s Day and back-to-school sales, not to mention unforeseen trends or events that could make demand far less predictable. That’s why retailers must find ways to optimize their cloud resource planning strategies ahead of a time of demand.
Here are three key components of a well-managed ecommerce cloud strategy.
1. Scalability Is Key
One key aspect of effective cloud resource planning is being able to dynamically scale infrastructure. Scalability refers to the ability to increase or decrease cloud resources as needed to meet changing demand, and it’s essential for modern ecommerce platforms.
It’s also critical to be able to scale on short notice, because unexpected events also can drive major spikes in demand and destabilize the performance of the whole infrastructure. The most visible and extreme example of this was the explosion in online spending during the first year of the COVID-19 pandemic, which saw 66% of households increase their online spending and a massive $183 billion boost in online sales between March 2020 to February 2021. The most recent Thanksgiving holiday weekend, in contrast, saw $38 billion in online spending, a level of demand that increased nearly 8% year-over-year yet still paled in comparison to the unprecedented events of 2020.
2. Strategic Cost Optimization
Cost optimization is crucial for all retailers, and strategic cloud resource planning plays a significant role in effective budget forecasting. Having the IT infrastructure equipped with essential tools to scale up the system when needed, and scale down when demand decreases, helps to optimize the cloud cost.
With a strategic approach to cloud infrastructure management and the appointment of flexible virtual resources such as CPU, memory and storage capacity, organizations can plan their IT spending in advance and avoid unnecessary overpayments for short-term and last-minute adjustments. Tailored specifically for each ecommerce project’s needs, cloud-based solutions can help save money while delivering secure, resilient and high-quality IT systems that will enhance business resilience and competitiveness.
3. Internal Communication and Collaboration Strategy
Open collaboration between IT leaders and the broader organization is paramount. As budgets are allocated, it’s on the IT team to communicate the importance of maintaining a robust cloud infrastructure and the value it brings, even when budgets are tight. It is also crucial for leadership teams in retail organizations to broaden their knowledge of cloud infrastructures and the benefits these systems bring to the business.
Business units such as logistics, customer experience and marketing should all be involved in discussions around the company’s IT infrastructure needs so that they can strategize their side of the business accordingly. For example, marketing could keep IT informed of upcoming promotions that might drive greater web traffic, or customer experience could work with IT to improve order processing times. A clear understanding of the “how” and “why” when it comes to the cloud’s impact on the retail experience can be game-changing.
So Who’s Doing It Well?
To illustrate effective cloud resource planning, let’s look at the ecommerce platform that is used by retailer M&Co. The platform has implemented a flexible cloud approach that allows it to adapt to the unpredictable nature of website traffic and budget constraints during peak retail seasons. It employs an advanced cloud infrastructure that enables it to dynamically scale resources up and down as needed. This flexibility ensures that the platform can handle sudden spikes in traffic during promotional events or seasonal sales, providing a responsive and reliable online shopping experience for customers.
In the dynamic world of ecommerce, effective cloud resource planning is a cornerstone for success during busy retail periods. The ability to scale resources dynamically, implement a flexible cloud approach, strategically optimize costs and foster collaboration between IT and stakeholders are essential components of a robust strategy.
