According to IDC estimates, the global market for public cloud services has been growing by about 21% annually over the past three years.
It’s expected that by the end of 2020, its volume will be more than $200 billion. Gartner predicts that 90% of companies will be using cloud services by 2022.
The retail sector is one of the three most promising cloud consumers. In this article, we’ll discuss how retail and e-commerce can leverage cloud technology to work more efficiently.
According to the Digital Commerce 360 study, online sales of retail chains are growing from year to year. From 2016 to 2019, the average growth in the online retail segment was more than 20%, and by the end of 2020 (taking the coronavirus into account) even more significant figures can be expected.
Online stores’ websites must be prepared for the constant growth of traffic and peak loads during various events and promotions (such as Black Fridays, New Year’s Eve, or releases of new models of popular goods). All this significantly increases the requirements for the IT infrastructure and leads to a regular increase in costs for the acquisition and maintenance of new server capacities.
Moving to the cloud allows businesses to effectively solve these problems, and it’s also recommended to connect to a CDN for fast loading of an online store with an assortment of tens or even hundreds of thousands of items.
Zalora, a company that owns one of the largest online stores in Asia, was for a long time developing only its own infrastructure. After the launch of a number of its own product brands, however, the company’s website could no longer cope with the load. As a result, Zalora moved its entire infrastructure to the cloud. Now, during sales, site traffic can increase by 300–400% without affecting performance in any way.
Lamoda is the most popular retail platform for fashion merchandise in Eastern Europe and the CIS, and is among the top 20 most visited lifestyle resources in the world. The retailer offers over 6 million items from over 3,000 international and local brands of clothing, shoes, accessories, cosmetics, perfumery, and home decoration.
Lamoda is visited by over 14 million people monthly. Around holidays and sales, the number of customers increases multi-fold and the framework should be ready for billions of user inquires.
“Cooperation with G-Core Labs let us fully disregard supporting and investing resources in the framework for delivering static digital content and instead focus on developing the online platform”
Companies with a large retail network may also have problems with centralized data storage. For example, MAP, a major retailer in Southeast Asia, tried to implement backup and recovery systems for its 2,600 stores. However, calculations showed that this required significant capital investments. As a result, МАР decided to move its data warehouse and accessibility services to a public cloud. The company notes that this has become the optimal solution in terms of productivity and financial efficiency.
G-Core Labs provides a convenient, highly scalable and secure cloud infrastructure to host e-commerce platforms and makes possible seamless migration from any infrastructure.
Besides, the G-Core Labs Cloud is integrated with the company’s own CDN, which makes it possible to accelerate the loading of online stores in any country in the world, even during periods of sales and promotions.
Continuous development of new services and products is one of the main conditions for survival in e-commerce.
Retailers regularly improve UI, personal accounts, mobile apps, and loyalty programs and experiment with designs. Test databases can be hundreds of terabytes in size, and deploying and shutting down dozens or hundreds of virtual machines has to be done in a matter of hours. Therefore, powerful resources are required.
All these tasks can be perfectly solved in a public cloud. Besides, it’s easy to select isolated test environments there for third-party access and for various pilot projects (for example, testing new applications and information security tools or upgrading system software).
Russian online retailer Ozon was one of the first to transfer all development and testing infrastructure to the cloud.
UK-based platform Nisa Retail, a provider of automated services to small retailers, has chosen a cloud-based platform to build its software products.
Doing so allowed company developers to easily manage dozens of independent debugging environments and test different approaches to data storage. As a result, the release times were reduced by 3–4 months.
With the help of the G-Core Labs public cloud, retailers can also reduce costs and time needed to introduce new services severalfold. The required capacities can be deployed in a few minutes, and just as quickly turned off at the end of testing. The pay-as-you-go model allows you to pay for the actual cloud usage time only.
With a variety of consumer information, large retailers use artificial intelligence systems to attract and retain customers. Information about purchases and product views is analyzed, after which customers are presented with customized offers, personalized discounts, and recommendations.
Big Data can be also used for:
In any case, the amount of data processed is usually huge. The number of customers and transactions reaches millions. Information is collected from hundreds and thousands of outlets, and therefore requires serious capacities to quickly work with incoming data.
Classic IT infrastructure doesn’t always provide such capacities. The required processing speed can be reached by placing databases and analytical platforms in the cloud.
The Amazon online retailer uses the cloud to make price changes in minutes and immediately update them on the site. Offline chains, on the other hand, usually need several days to do that.
Macy’s is a US chain with 800 stores, selling more than 70 million items. The company uses Big Data to form an assortment and price list in each individual outlet, and it does so in real time. On top of that, Macy’s uses analytics to create personalized offers. For example, the number of variations of one advertising mailing campaign can reach 500,000.
The Australian youth clothing brand Ally Fashion has also moved its demand-tracking analytics platform to the cloud when their classic infrastructure could no longer cope with massive amounts of data. Currently, in each Ally Fashion store, there are up to 5,000 products used to create about 300 looks. 50 of them are updated every week based on real-time analysis of demand and customer behavior in specific locations.
Services offered by cloud providers on the PaaS model can be the basis for the development of such analytical systems.
The G-Core Labs AI platform makes possible full-cycle machine learning and collaboration on models. Access to a catalog of ready-made templates is provided, which allows you to speed up and reduce the cost of the machine learning process.
The platform integrates the best data acquisition and processing tools, such as Kafka, Storm, Spark, PySpark, PostgreSQL, MS SQL, Oracle, MongoDB, as well as machine learning tools (TensorFlow, TensorRT, OpenVINO, Keras, fast.ai, PyТorch, BigDL).
According to one industry study, more than half of online retailers saw an increase in the frequency and power of DDoS attacks in 2020.
Many companies faced ransom demands to stop the attacks. To enhance the effect, violators attack at critical times—for example, on Black Fridays. In addition to loading channels with junk traffic, bot attacks are becoming a serious threat to online retailer sites. With their help, attackers steal content, hack accounts, and make “scalper” purchases that distort analytics and slow down the website.
Any infrastructure can be attacked, both classic and cloud. To repel DDoS attacks aimed at your own equipment, however, you need to invest a lot of money. As an example, the price of a specialized software and hardware complex can reach tens of millions of rubles (not including technical support, maintenance, and employee salaries).
To save substantial sums of money, it’s better to protect comprehensively using a specialized service.
eVitamins, an online health and beauty retailer, used to experience significant challenges from attacks of all kinds, from hacking attempts to DDoS attacks. The company used intrusion prevention systems, blocked suspicious IP addresses, and analyzed logs, but still failed to cope with the problem. The way out of this situation was to transfer the infrastructure to a public cloud and enable the DDoS protection.
Internal services are no less important in supporting retailer business than client services. They include:
Moving these services to the cloud has also become popular. Retailers have realized that there’s no need to host many local servers in branches or stores—it’s enough to provide access to the cloud, ensuring that applications are launched and data stored in it.
Brooks Brothers, one of the largest US clothing retailers, has deployed its ERP system based on the Hana SAP, which is very demanding on resources, in the cloud. This allowed the retailer to instantly provide internal services for its employees, as well as organize data backups. When it was necessary to enable information security tools (such as two-factor authentication), it was simple to do so in the cloud.
G-Core Labs offers tools for cloud migration of internal services deployed on a traditional architecture.
System performance doesn’t degrade during migration. The migration of data and applications is seamless for users. Before migrating, you can conduct an unlimited number of tests based on individual migration plans.
Learn more about all the features of the G-Core Labs Cloud, or get started in our cloud now.