Community Blog How Retailers Are Overcoming Challenges and Executing Digital Transformation with the Cloud

How Retailers Are Overcoming Challenges and Executing Digital Transformation with the Cloud

This article describes how retail businesses are using Alibaba Cloud to unleash the benefits of digital transformation.


The $15 trillion-plus global retail sector continues to grow with e-commerce in particular surging due to the pandemic – some industry observers point out that e-commerce as a proportion of total retail sales grew several times faster than before the crisis.

For businesses in the retail sector – including bricks and mortar retailers, bricks and mortar retailers with an e-commerce presence and e-commerce retailers, selling products ranging from groceries to electronics and services such as food, drink and accommodation – change is constant. This dynamism also extends to the companies that manufacture and supply products to retailers.

Retail businesses must address an array of challenges, ranging from evolving customer expectations to retaining employees in a competitive market and addressing supply chains impacted by conflicts and other disruptions.

To thrive in this environment, retail businesses need to control costs; gain the flexibility, reliability and speed to adapt quickly to changing circumstances and seize opportunities; and enable team members to focus on core activities, innovation and execution rather than infrastructure management.

Cloud can help retail businesses overcome these challenges and realize their potential. Alibaba Cloud is a proven provider of expertise, technologies and products that has helped a range of retail businesses – and organizations in related and other industries – succeed today.

Building Resilient Technology Foundations and Leveraging Powerful Networks

Cloud infrastructure provides a resilient, dynamic foundation for retail businesses to implement digital transformation, delivering agility, cost-effectiveness and speed-to-market. Speedwork – a business that connects vehicle owners looking for auto care services with trusted workshops – aims to provide a seamless online-to-offline (O2O) omnichannel buying experience, with a robust online presence key to improving the experience of its customers.

The business required a partner expert in cloud computing to help it build a solid technology environment for its digital commerce platform, and a reliable, easy-to-use and seamlessly scalable cloud platform that could support rapid development, deployment, and operations and maintenance.

With Alibaba Cloud, Speedwork could reduce the time and personnel needed to manage its IT infrastructure while taking advantage of availability of 99.95% uptime backed with service-level agreements (SLA), as well as elastic scaling capabilities that enabled the business to dynamically provision and de-provision cloud resources based on workload demands.

Furthermore, Alibaba Cloud's success in enabling the digital transformation of numerous local companies made it an ideal choice for Speedwork, which trusts the cloud provider to run its entire operations, including its critical production workloads, so its team can focus more on expanding its business and improving the experience for its customers.

Speedwork relies on Alibaba Cloud's infrastructure-as-a-service (IaaS) offerings, including Elastic Compute Service (ECS), to handle its critical and growing production workloads. Speedwork also uses various Alibaba Cloud data storage and management products to manage a growing number of users and transactions, such as ApsaraDB RDS for MySQL for relational databases, ApsaraDB for Redis for caching, and Block Storage for local storage. All these products help Speedwork provide highly available and reliable services for its merchants, influencers, creators, and public users.

Another dynamic business to turn to Alibaba Cloud for infrastructure and networking is LunchBox, which provides a smart Point of Sale solution that gives restaurateurs centralized visibility into customer relationships, staff management, scheduling, table seating, inventory management, and payments processing. This in turn helps them drive more revenue, turn customers into lifelong patrons, reduce ticket times, and minimize paperwork and administration tasks.

With ECS, LunchBox was able to use secure virtual servers to scale its global operations and provide better quality services to its customers, while the business was also able to enhance the availability and performance of its databases using Alibaba Cloud's fully hosted online database services.

In addition, LunchBox utilized Alibaba Cloud’s extensive global node network to build fast and stable network connections worldwide.

In Hong Kong, Chow Tai Fook Jewellery Group Limited turned to Alibaba Cloud to help realize its vision and execute O2O, retail expansion and smart retail strategies.

Chow Tai Fook needed a strong and scalable IT infrastructure to scale rapidly and an agile system development life cycle and efficient software development process to remain adaptable during its growth. Furthermore, the Group needed stable and secure cloud services to support the back end of its O2O tools and process management operations.

Alibaba Cloud provided robust and reliable IT infrastructure to support Chow Tai Fook's digital journey and to safeguard its online and offline sales transactions, especially during peak periods such as the Double 11 Shopping Festival.


Complementing Infrastructure with Specialist Products and Expertise

Beyond cloud infrastructure, retail businesses need specialist solutions and expertise to assist with the development and launch of new solutions. For example, Senheng, the biggest consumer electronics retailer in Malaysia by revenue, was aiming to boost the local economy and help local small and mid-size enterprises (SMEs) by allowing them to tap into a three million-strong 'PlusOne' member database with the B2B2C S-Rewards Centre. At the same time, the company wanted to reward Senheng PlusOne members with S-Coin cashback.

Senheng needed a reliable cloud platform partner to synergize its S-Rewards Centre operations under a B2B2C business model, and the business chose Alibaba Cloud’s Terminus B2B2C as the base platform to develop the center. Together with the Terminus team, Alibaba Cloud offered dedicated consulting and shared best practices to help identify business requirements and define the ideal operating model for the new S-Rewards Centre B2B2C Platform.

Furthermore, tailored workshop and training sessions enabled local partners to deliver, customize and support the Terminus B2B2C Platform. Alibaba Cloud’s Terminus solution comes with advanced B2C, B2B2C and O2O capabilities, allowing Senheng customers to migrate their operations online and manage orders and deliveries efficiently on a single online platform. The solution also enables Senheng to manage its loyalty programs – in terms of acquisition, retention and engagement – more effectively.

With the launch of the new S-Rewards Centre, PlusOne members can now shop and earn S-Coin cashback rebates across a wide variety of products. In addition, the successful implementation of the platform has improved the customer return rate for Senheng retail stores.

Senheng now aims to streamline its business operations across online and offline commerce channels by integrating them all into a single online platform, creating an omni-channel approach for a distinctive customer experience.

The business also looks forward to building an ecosystem that benefits Senheng’s PlusOne members, partners and suppliers and, more broadly, leverage Alibaba Cloud’s services and technology to transform itself from a consumer electronics retailer into a 'super app' ecosystem.

In the United Arab Emirates, WEMART – one of the largest Asian supermarket chains in the Middle East – turned to Alibaba Cloud to help manage increased online business volume and the growing complexity of online operations such as management of payment gateways, transaction processing, and customer membership became more complex.

WEMART wanted to consolidate its online and offline resources and accelerate its digital transformation.

To power its next phase of growth during the COVID crisis, WEMART chose Alibaba Cloud as its technology partner. Alibaba Cloud offered a comprehensive set of online-to-offline shopping solutions to digitally transform operations, making it even more convenient for consumers to shop and pay. Intelligent features based on AI and machine learning further enhanced the seamless shopping experience by narrowing down the communication gap between retailers and buyers.

WEMART adopted Alibaba Cloud's easy-to-use, reliable, cost-effective, and fully-managed services to ensure seamless operations and superior customer experience. The O2O solution from Alibaba Cloud helped WEMART facilitate easy online order placement for customers and provide convenient delivery options, including self-pickup from the nearby stores, direct delivery by stores, or deliver by warehouses.

This solution enhanced the shopping experience, as well as streamlined and improved offline store and warehouse order fulfillment efficiency. Alibaba Cloud also supported easy integrations with existing ERP, CRM, WMS, POS, and third party payment gateways to maximize product placement strategies, prioritize tasks, implement fair productivity standards, and increase logistics efficiency.

Strong integration further simplified unified commodity management, transaction management, membership management, and promotion management. WEMART also leveraged Alibaba Cloud PolarDB for MySQL to handle high concurrency requests by increasing response capability during peak time.

Furthermore, Alibaba Cloud's AI-based virtual assistant, AliMe Chatbot, and workbench helped automate customer service tasks by handling 60-70% of consumer queries and after-sales service requests on a 24 hours a day, seven days a week basis. Additionally, WEMART leveraged Alibaba Cloud's translation service to overcome language barriers and allowed consumers to switch to different languages as needed. This helped WEMART target new consumer groups and increase revenue.

Keeping Customer and Corporate Data Secure

Securing critical customer and business data is a key priority for retail businesses – failure to adequately do so can cause severe reputational and financial damage. According to the Ponemon Institute, the average cost of a data breach is close to $4 million, while retailers face threats ranging from ransomware that locks down critical files until a ransom is paid and malware that captures customer data to denial of service attacks that aim to disrupt the availability of critical services.

Alibaba Cloud’s security products and solutions enable retail businesses to protect themselves against cyber-attacks and breaches – for example, these solutions enabled LunchBox to meet its requirement of hosting its payment platform in a secure environment, with a database solution that provided encryption for data in transit and at rest a must-have.

Extracting Value from Customer Data for Retail Success

Analysis and reporting on customer data is key to retail success and prominent watch brand Casio is among the businesses to turn to Alibaba Cloud to realize the potential of its data assets. The speed of change of customer behavior and social trends made it important for Casio to implement a data-driven marketing strategy. The business turned to Alibaba Cloud because of its solid foundation in cloud and AI.

Casio worked with Alibaba Cloud to build an omnichannel data mid-end that enabled the business to analyze its customers from multiple perspectives. Casio could categorize customers and understand how their behavior and preferences varied in different circumstances and business scenarios. The Alibaba Cloud data mid-end is ersatile, dynamic, and real-time, enabling Casio to operate its membership assets in a more agile manner.

With the help of Dataphin, one of the core products of Alibaba Cloud data mid-end, Casio has constructed its own online consumer assets, digitally transformed all business scenarios, and integrated and unified its system of data indicators, including transactions and after-sales. Moreover, to manage inventory turnover, a crucial index of channel sales, Dataphin has integrated bar codes, characteristic attributes, warehouse and other product data into a data foundation and completed data system construction and standard unification of commercial assets.

During the Double 11 festival, Dataphin helped Casio to predict sales based on the AIPL population, improve the efficiency of inventory turnover, and reduce inventory pressure. The business recorded 1.7 million views during the Double 11 Cloud Conference live broadcast, 3.17 million store visits and 2.97 million transactions.

With Alibaba Cloud, retail businesses can – and are – executing strategies to maximize the benefits of digital transformation and expand into new markets.

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Iain Ferguson

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