The retail sector has undergone a period of transformation, digitalising to meet changing customer buying behaviour and demand for digital experiences. But, as the grid strains under increased pressure, the retail sector has a part to play in balancing this through smart infrastructure solutions. Henk IJspeerd, Director Key Accounts Retail EMEA, Vertiv, tells us more about the infrastructure requirements of retail organisations today, and why they should be planning long-term.
What is driving the digitalisation of the retail sector?
The retail sector is a market segment which is changing rapidly. Not only does the industry deal with data centres, it must also deal with IT, communications, head offices and thousands of warehouses and stores in country or across Europe.
Driving these changes is consumer buying behaviour, which is now very much online. When COVID hit, for example, organisations had to move to an online-only model, quickly mobilising processes and logistics to be able to deal with this. Any snags in the process will quickly deter customers – so a seamless buying journey is crucial.
Alongside this is the requirement to comply with local or international regulations regarding environmental factors. For example, in the Netherlands and Spain, there is not enough power available, so companies need to compromise and provide grid support. This impacts the approach to UPS and IT infrastructure so businesses have to assess how best to design their infrastructure to deal with these demands.
These businesses also need to think long-term when planning their infrastructure – what will the requirements be in 10 or 15 years, for example. Planning ahead requires a cross-organisational strategy, incorporating the IT department and building management teams, as well as other stakeholders.
What pressures does this demand for digital place on retail infrastructure?
There are multiple pressures on retail infrastructure. Take CCTV, for example, which requires storage of hundreds of images – all of which must be kept in a secure, regulated environment, so stored in a separate cabinet.
Then there is the high quantity of data which is stored, which helps to provide personalised experiences for customers based on their preferences and any special offers that align with those.
To be able to provide these services and optimise infrastructure, there needs to be standardisation across individual countries or regions. Solutions also need to be flexible and scalable – a challenge given that there is no crystal ball to see what the requirements will be in five or 10 years’ time.
We do know that organisations will need to install more IT equipment and that they will need to ensure the grid is stable.
At this time, we are seeing many retailers are opting to purchase bigger UPS’ which are scalable, which start with an autonomy time of 10 minutes and can increase to whatever they want. These items are becoming more and more critical for retailers.
How can retailers ensure consistency both online and offline to ensure positive customer experiences?
When choosing to buy online, customers will look at the price and availability, but will always choose based on what will arrive tomorrow.
If retailers want to survive in this market, they need to have optimised systems, the right stock levels and well-organised transportation systems. Customer experience is crucial – if you go to a shop for instance and can’t find what you’re looking for on the shelf, you will go somewhere else and, if it’s a good experience there, from that moment on you will probably buy more in that store.
These days, people will go online to find the perfect jacket and it’s important that the product is available in-store too – if they cannot find it, they will go elsewhere.
What are the key requirements for retail organisations when it comes to ensuring they have robust infrastructure in place?
While data centres are clean environments, retailers have warehouses where they need to reduce the amount of square metres because of the annual costs. IT is often placed in a corner of the warehouse where it’s dusty, where the temperature and humidity is variable. We are building solutions specifically for these kinds of environments, as well as providing maintenance and support for them. Again, it’s important to standardise.
For the stores, it’s even worse. Imagine a store in Cyprus versus one in the UK. Cyprus is 40 degrees Celsius plus in the summer. As trucks arrive, the doors will open to unload the truck and then that raises the temperature in the warehouse of the store itself, and you may get dust come in. Therefore, we build special solutions such as integrated cooling with dust resistance and monitoring solutions.
We talk to the customer to find out what they expect for the coming five, 10 and 15 years. Then we design and build a solution which is upgradable and extendable for them.
How can organisations guarantee business critical continuity, while also being able to scale for changing size and complexity?
Business Continuity is extremely important because businesses cannot afford any disruption. However, the grid is failing more and more, and we are increasingly installing solar panels and windmills as renewable energy sources.
We are also living in a time where electric cars are becoming more popular. When people come home from work between 5pm and 8pm, they are charging their cars. If there are 100 cars, that’s not a problem but when we are talking thousands, the grid in Europe is not ready for this.
Grid suppliers will ask retailers to provide support, whether via scalable UPS, installing solar panels or windmills, like we do in Spain for some of our customers, and then store the energy in the batteries of the UPS.
Should the grid go down, leaving no power in a store, they would have to throw away everything – costing hundreds of thousands of euros. That’s a critical situation and it will become more and more critical because of the increasing pressure on the grid.
I think retailers will play a crucial role in solving some of these grid challenges.
What advice would you offer retail organisations that are currently evaluating infrastructure investment opportunities to ensure that they are future proof?
I would reiterate that organisations should be thinking ahead. Try to standardise and not only consider price – but also delivery, installation, communication, monitoring and maintenance. Then we can try to make everything scalable to reduce CAPEX and OPEX.
If you can make this happen, the total cost of ownership for the whole environment will go down and that’s what everybody wants to achieve.
Think ahead – consider the increasing instability of the grid, and consider Edge Computing and whether that’s an area you want to invest in.
The conversations taking place in this sector are extremely interesting but it’s challenging too. That’s why organisations need help and support from companies who do have the experience with data centre and custom built solutions.
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