Retailers turn to public cloud to gain competitive advantage in digital age
London, UK – 30 November 2021 – Retailers are turning to public cloud to drive improvements in customer service and agility, according to new research commissioned by Telehouse International Corporation of Europe.
The study, which polled the views of 250 UK enterprise IT decision-makers, in financial services, retail, logistics, manufacturing and private healthcare, found that retail is the only sector to prefer public cloud over private cloud with a quarter (26%) using public cloud as their dominant cloud approach, significantly higher than the 19% average across all sectors.
Over half of retailers (56%) have implemented a strategy for public cloud, compared to just 46% for private cloud. Currently, retailers are outsourcing just under half (44%) of IT infrastructure in the cloud, but this is anticipated to rise to 55% by 2026 – the biggest increase across all sectors.
Top drivers behind investment in the cloud include the need to digitally transform (36%), the rapid rise in e-commerce (34%) and an imperative for greater agility (34%). Retailers are also looking to the cloud to help deliver a better and more intelligent service, with customer experience improvements (38%) and analytics/business intelligence (38%) the top two use cases.
Despite a strong appetite for cloud, retailers still have obstacles to overcome to advance IT maturity, with top challenges including ensuring resilience, upgrading or managing legacy IT and achieving security and compliance. Fast forward five years to 2026, and retailers expect their challenges to change with managing connectivity and the cost of scaling IT rising to the fore.
Security concerns are likely to also be a reason why many retailers still opt to keep some data out of the cloud, most notably customer data (40%), financial data (44%) and personally identifiable information (40%). Furthermore, 62% say that pressure from customers to increase cyber security is the top driver for delivering a more mature infrastructure.
Mark Pestridge, Senior Director Customer Experience at Telehouse Europe, says: “Retailers have a high volume of consumer-facing technologies and a need to react quickly to peaks in demand, like Black Friday, which makes public cloud an attractive option for connectivity and scalability. But with increasing pressure to improve security, retailers cannot risk moving all infrastructure to public cloud. By connecting with cloud providers via a secure data centre, retailers can take advantage of scalability and flexibility benefits of cloud without compromising security or compliance.”
Growth in data volumes is also a headache for retailers with almost a third (30%) stating the problem is either ‘serious’ or ‘very serious’ to their organisation. The biggest data volume challenge was ‘handling and integrating disparate data types from different sources’ referenced by 48% of IT decision-makers in retail.