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From the smallest brick-and-mortar specialty shops to largest superstores, retailers tend to be fairly unified in their key focus areas when looking for growth opportunities.
They are always striving to maximise sales or basket size by offering the most optimal product selection, and by embedding convenience at every point in the purchase journey.
These are key factors that impact purchase decisions; a poor product selection and a poor customer experience can quickly drive customers to look elsewhere.
But retailers have other reasons as well to chase growth. The sector is in recovery mode after a challenging few years. As KPMG Australia notes, the emphasis now is on reinvention and driving greater agility into operations. “Best-practice retailers are continuing to adapt to the new normal, including upgrades in their front, middle and back offices, store rationalisation, and heavy investment in understanding their customer, digital offerings, and supply chain agility.”
An enduring challenge in all of this is that there is often a significant lack of onsite IT personnel at retail locations both to oversee and bed down technology and digital investments, and then manage them on an ongoing basis.
As retail spaces become more technology-enabled and rely more on digital technology to create compelling customer experiences, there is a greater need for ways to allow new digital platforms and experiences to be set up and managed from afar – by IT people in a head office, or by a managed services provider.
It is within this context that SD-WAN’s star is rising, resulting in its appearance in the backend infrastructure underpinning more and more Australian retail environments.
Research by Frost & Sullivan shows the retail sector is one of SD-WAN’s early adopters. In 2021, one-in-five retailers were expanding existing SD-WAN deployments, with a further 33% intended to start their own SD-WAN programs by 2023.
That correlates with separate IDC research that shows 63% of retailers intend to take up SD-WAN.
The remaining one-third, while having no current plans, may be persuaded to shift once they observe retailers around them making gains that can be tied back to investments in network infrastructure, and specifically to SD-WAN.
Outward signs of SD-WAN’s presence
It’s worth exploring some of the signs of growth, improvement and transformation at retailers that could flow from – or be indicative of – an investment in SD-WAN technology.
Retailers that have the technology will recognise some or all of these things as benefits they’ve seen firsthand; those without an SD-WAN may see fellow retailers exhibiting the following characteristics, and find they can achieve something similar by utilising the same technology.
The first sign that SD-WAN is present is simply that digital transformation is smooth and hiccup-free.
IDC has called SD-WAN the “backbone of digital transformation.” The research firm lauds SD-WAN’s ability to address key transformation blockers, including performance and latency issues, multi-cloud environments, deployment of new services, resolving legacy network infrastructure bottlenecks, and avoiding interoperability issues while maintaining and enhancing security.
Given the widely circulated figures that between 70% and 84% of transformations fail, successful programs – and the reasons they’re successful – are keenly observed. There’s a high likelihood that retailers making a strong showing with their transformation journeys are leaning on SD-WAN as one of their core enabling technologies.
The second sign a retailer has an SD-WAN is in the actual customer experience being served up.
Customer-facing activities are latency-sensitive. Quality of service is required to deliver frictionless customer-facing experiences, especially in areas with low-bandwidth connectivity.
These experiences run the gamut of traditional to emerging.
Uptime and availability is vital for mission-critical activities, including Point of Sale (PoS) systems, environmental controls, and inventory tracking; SD-WAN allows resources to be pooled to guarantee connectivity.
Increasingly, retailers want to power more advanced sales techniques in their stores. Some operators seek to enhance the customer experience by allowing virtual events, interaction with online experts, and even temporary pop-up stores. Others, according to research by Ecosystm, are setting up “interactive fitting rooms, augmented reality, and check-out free shopping” experiences. All of these digitally-enhanced in-store experiences and activities require fast scalability and network performance that is a hallmark of an SD-WAN.
The third sign a retailer is using an SD-WAN is smooth operations. The lack of onsite IT personnel at stores makes it even more critical to ensure that troubleshooting and oversight of day-to-day operations are made as easy as possible. While SD-WAN can extend to laptops and devices, it can help retailers solve network-related problems, such as latency, while reporting real-time traffic and WAN health in an easy-to-access format. It also allows for zero-touch deployment of technology to new stores, as well as centralised remote management.
The fourth sign an SD-WAN is present may be in general competitiveness. The cost efficiency of SD-WAN compared to earlier network technology may be of a quantum whereby there’s an opportunity for retailers to charge less for the products they sell, because the overhead cost of operating the network is much lower.
Oshadha Ranaweera is manager for connectivity and network services at Somerville.
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