If the past two years have taught us anything, it’s that it will take all of us working together to ensure the future of retail is meeting today’s consumer needs. The world of retail has been forever shaped by new behaviors, and many are here to stay. Business-as-usual will no longer meet these expectations. With the rise of blended consumer shopping behaviors, persistent supply chain constraints, and a serious labor shortage, a new reality has emerged. A reality that requires retailers to accelerate their digital capabilities to give consumers what they want before they’ve asked, align their supply chain by anticipating this demand, and empower the industry’s superheroes—retail frontline workers.
With the February 1 general availability of Microsoft Cloud for Retail, I’m optimistic we’re going to meet this challenge head-on with technology that will help retailers connect their customers, their people, and their data with a partner they can trust.
What is Microsoft Cloud for Retail?
Microsoft Cloud for Retail is an industry-specific cloud that will help retailers meet this new age of digital optimism. Customers have asked us for purpose-built retail solutions designed to allow their businesses to do things they’ve never been able to do before and with a level of speed and specificity beyond what they’ve expected in the past. Our long history of scope and scale in the retail industry has been brought to the cloud. And we’re helping to accelerate business growth by providing a complete set of retail-specific capabilities across the Microsoft Cloud portfolio.
It starts by unifying disparate data sources across the end-to-end shopper journey, allowing retailers to maximize the value of their data, and resulting in one holistic view of the consumer. Once connected, data and AI help retailers better understand and elevate the consumer shopping experience. In providing more relevant and streamlined experiences throughout the retail value chain, retailers can build a real-time sustainable supply chain and empower their frontline workforce.
“With Microsoft Cloud for Retail, our increased knowledge of individual customer journeys will further strengthen our customer relationships and turn GNC into people’s primary destination for health and wellness.”—Scott Saeger, Chief Information Officer, GNC
Entering the 2022 retail space
Looking ahead, I’d like to share four future-looking opportunities that retailers can be optimistic about in 2022, all of which will be enabled with Microsoft Cloud for Retail capabilities and our rich ecosystem of partners.
1. Maximize the value of retail data
Realize the true value of retailer’s data by unifying disparate data sources across the shopper journey, discovering insights that enable better experiences. There are 40 petabytes of data generated every hour in retail—it’s effectively the demand signal for the world.¹ Yet, customer touchpoints aren’t linked to each other—systems and data are siloed and disconnected. And most retailers are only set up to leverage a fraction of the data that’s available.
With Microsoft Cloud for Retail, we’re using data models to bring multiple systems and applications together, unifying disparate data sources to establish a singular, in-depth profile of each shopper. Capabilities here include unified customer profile, shopper and operational analytics, intelligent fraud protection, and retail media.
“When you make decisions based on data, you know that you’re going to put the right products in the hands of customers when they need it. And we’re going to have happy employees because they won’t have to manage inventory that’s not needed in their stores.”—Anne Cruz, IT Manager for Supply Chain and Merchandising, Walgreens
2. Elevate the shopping experience
Transform the shopping experience through data analytics and new store technology to create more engaged shoppers with stronger lifetime value. In today’s highly competitive retail landscape, personalization has become the standard. While 95 percent of retail CEOs say they are strategically prioritizing personalization, only 23 percent of consumers think they’re doing a good job.²
With personalization at the heart of satisfying shopping experiences, Microsoft Cloud for Retail helps drive conversion by enabling personalized recommendations and search results. Capabilities here include real-time personalization, intelligent stores, unified commerce, digital advertising solutions, and seamless customer service.
“We wanted to better understand customer preferences and how they change over time. Those are incredibly important things for a business of our size to understand.”—Sashi Kommineni, Director of Enterprise Analytics, Chipotle Mexican Grill
3. Build a real-time, sustainable supply chain
Create a resilient and sustainable supply chain by connecting data across the ecosystem to identify issues and optimize performance. Today’s consumers are frustrated by empty shelves. In many ways, 2021 was the year of the supply chain—or “supply pain” as it became known. According to McKinsey, in the fall of 2021, over 60 percent of consumers faced out-of-stocks and only 13 percent of those waited for the item to come back in stock. Among those who faced out-of-stocks, 32 percent ultimately switched retailers to make their purchase. That means that many retailers are not only losing out on sales but facing reduced customer loyalty.³
Supply chain transformation starts with the recognition that a retailer’s data holds the key. Yet despite retailers sitting on a treasure trove of data from across their supply chain, many can’t use it to their full advantage. With Microsoft Cloud for Retail, we’re helping retailers to better predict demand using AI to optimize inventory and optimize order management to give customers choice across channels. What’s more, we’re helping retailers record, report, and reduce things like carbon emissions as they strive to become more sustainable. Capabilities here include supply chain visibility, demand planning and optimization, and flexible fulfillment.
“We’ve had rave reviews from our customers about the great experience using our curbside pick-up at the store. They’re blown away by the communication and the level of service they’re getting via Teams, and the resulting trust means more overall shopping.”—Paul Medeiros, Associate Dealer-Owner, Canadian Tire, Niagara Falls
4. Empower the store associate
Equip store associates with solutions to enable real-time store communications, workforce management, and store automation. Retail always has been and always will be a people business, with many employed on retail’s frontline. If ever there was any doubt about the importance of retail’s frontline, then their herculean efforts during the past two years have put those doubts to rest. These superheroes shouldered much of the change we’ve seen and experienced, with minimal training and astonishing grace. Survey results from Microsoft’s recent Work Trend Index show that 60 percent of frontline workers are excited about the new opportunities that digital tools bring to retail, but 34 percent feel they still don’t have the right technology.⁴
Investing in frontline workers’ experience is investing in the customer experience. For example, industry-specific solutions like Microsoft Cloud for Retail can surface stock and supply chain data on mobile devices so an associate can quickly see availability of an out-of-stock product and arrange to have it shipped to the customer. Retailers that have transformed frontline capabilities in this way have seen unprecedented returns in customer satisfaction. Capabilities here include real-time store communication and collaboration, retail workforce management, process automation, and career development.
“With Tasks in Teams, we can create a culture of relentless customer care and make sure that the right behaviors are in place in the pursuit of that goal. If we get the customer care element right, the business result will speak for itself.”—Cahir Mullan, Franchise Partner and Optometrist, Widnes Boots Opticians
Partnering for the next era of retail
Building digital capability is the new currency driving every retailer’s resilience and growth. Not just for this pandemic but for future events, and the years to come. That’s why digital co-innovation is a massive focus for us. We want our customers to build their own digital capability and become independent with us, not dependent on us. But we also know that we can’t do this on our own. That’s why we have an incredible ecosystem of industry partners who extend the value of Microsoft Cloud for Retail with additional solutions that address their most pressing challenges.
This partner ecosystem is a growing network of solutions that uses a common data model format to integrate seamlessly and natively with the entirety of our Microsoft Cloud for Retail. And of course, these partners would not have our seal of approval without the same security, privacy, and regulatory standards we rely on to maintain a bedrock of trust. We are honored that so many partners trust Microsoft to be their platform partner.
Thanks for the trust in us
Digital technology has a critical role to play in advancing the retail industry forward, and I am grateful for the trust our customers continue to place in Microsoft as their digital partner of choice. With Microsoft Cloud for Retail as our vehicle for industry innovation, along with an amazing ecosystem of Microsoft partners, I couldn’t be more excited for what lies ahead for all of us.
Finally, I invite you to join us for our Retail Digital Forum on January 19, 2022, where we’ll be sharing inspiration from some of the customers and partners working with us on all these future-looking opportunities.
¹Get more value out of your data in the cloud—Accenture.
²Personalizing the customer experience—McKinsey and Co.
³US consumer sentiment and behaviors during the coronavirus crisis—McKinsey and Co.
⁴Work Trend Index—Microsoft.