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HPE says hybrid IT crucial for survival in retail – and how to implement it

By Ashton Young
Fri 1 Dec 2017
FYI, this story is more than a year old

​Digital disruption is happening across industries around the world – and HPE asserts none more so than retail.

According to HPE, retail stores are seeing roughly half of the foot traffic than just six years ago. This has left those in retail with an ultimatum where they need to rethink not just the role of the store but operations, merchandising and even the supply chain.

More data is available now than ever before and it continues to grow. HPE says the ability to access, analyse, and manage vast volumes of data is critical to success, and even survival.

“Around 9,000 stores in America are closing every year - at the same time a similar number are opening. The smart ones survive while the others are left behind,” says director of Global Infrastructure Services at HP, Ewald Comhaire.

“From a business model, a lot of retailers are moving away from a brand-centric model to a model that is more consumer experience-centric. That doesn't mean the brands go away. It is now more about brands creating a continuous experience between online and offline stores regardless of where you are, and that in turn is what makes customers decide in favour of one store over another.”

Comhaire says today’s stores are often operating like many legacy organisations, focusing on point solutions and working within channel silos. He assures this time is over, and the future is now hybrid IT.

“There is a lot of technology and innovation going on in retail, and we do believe that as the supply chain becomes more digital, companies should not give away the control of their infrastructure away to public clouds or other solutions, but if they're really looking to optimise their supply chain then at least keep control of the optimisation level - hybrid IT is the way to do that.”

“Omnichannel integration is a phenomenal user-experience but you can't get there without rethinking the platform and some of the architecture and technologies within the platform. We help customers build this unified commerce platform and maintain their store of the future.”

One thing is for certain and that is the retail store of the future is going to produce and utilise substantial amounts of data resulting in the continued and relentless need for storage and security.

Comhaire summarises digital transformation in retail with a few main points:

  • Technology innovation and convergence are major drivers of retail transformation
  • In a digital enterprise, the supply chain becomes more digital where IT grows faster than OT before the two converge
  • Keep control of optimisation of supply chain via hybrid IT
  • Omni-channel integration requires rethinking of architecture & platform
  • Secure mobility in the store is THE foundation for retail innovation

Digital innovation director at HPE, Mark Tritton shares these sentiments and says this is an exciting time, with the connection between people and things evolving to facilitate retail experiences.

“The retail industry is transforming into a learning, interactive space. We’re seeing a huge connectivity opportunity to do something interesting through that change,” says Tritton.

“We get this word that is beginning to emerge - Phygital, combining both physical and digital. The point is how do you start bringing that digital experience into the physical space?”

Tritton presented the ideas behind the ‘store of the future’ (that are actually beginning to roll out already with HPE’s solutions) with some of the main aspects including:

  • In-store analytics & AI
  • Store infrastructure consolidation/modernisation
  • In-store secure mobility/networking – foundation for the personalised, consistent retail experience and cloud computing
  • Deliver personalised shopping experience, supported by location aware services
  • Improve employee productivity: anytime anywhere connectivity & rich, multi-media collaboration

Co-founder and CEO of Zynstra, Nick East says the retail battleground has moved to the edge. Despite this, the bulk of the market are still looking at retail edge computing the wrong way.

“It’s not about stretching generic data center technology to fit the edge or patching up legacy edge compute assets,” says East.

“The real game requires a new infrastructure with intelligent automation to transform the economics and speed of your retail edge and enable your digital strategy.”

East says what retailers need is:

  • A solution that’s purpose-built for the edge 

  • Continuous delivery of new, innovative services and consumer experiences 

  • Fully automated to enable economies of scale: new store set up, managing 1000s of distributed sites 

  • Keep systems current at all times: security, upgrades and backups 

  • Economical at the edge: achieve highest operational efficiency 


USE CASE

Otto Group has a growing number of global businesses (approx. 84 brands) that span online, catalog and retail stores with the intent to drive innovation in digital shopping experiences.

To speed the creation of new services, Otto Group IT engaged HPE experts to design and implement a hybrid IT operating model based upon HPE’s transformation methodology. Now, new infrastructure services are provisioned 90 percent faster, accelerating innovation and also reducing operating costs by 40 percent.

“Had we not been able to work with Hewlett Packard Enterprise to implement this

process of total transformation, we would be far behind the competition,” says Alexander Hauser, vice president of Otto Group IT.

HPE says its hybrid IT transformation journey is kept simple with three main services:

  • Advisory services to build the strategic transformation roadmap and define the future hybrid IT operation model
  • Professional services to modernise and migrate workloads using automation, and migration to the new operating model
  • Operational services to support the customer’s environment
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