Trends: Cloud computing to drive digital retail in 2022

This article first appeared in Digital Edge, The Edge Malaysia Weekly, on May 23, 2022 - May 29, 2022.
Trends: Cloud computing to drive digital retail in 2022
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Retail businesses are no strangers to change, but the pace of change during the Covid-19 pandemic has been remarkable — consumer preferences and buying behaviour have evolved rapidly, coupled with the emergence of a digital-first environment. These trends are only set to accelerate.

Consumers in Malaysia and around the world are seeking a fast and seamless e-commerce experience, causing companies with a large presence across multiple physical locations as well as a business model that relies heavily on face-to-face interactions to adapt quickly to a thoroughly digitalised and omnichannel retail ecosystem.

Today, the consumer is defining the way forward more than ever before. CEOs, CTOs (chief technology officers) and CMOs (chief marketing officers) have realised that they need access to robust, scalable and secure IT infrastructure to meet the digital preferences of customers and accommodate the scale of demand.

Some CXOs (chief experience officers), rather than trying to build new software and technology from the ground up, are choosing to make use of already available and mature services on a pay-as-you-go basis. Enter the role of cloud computing technologies, which decision-makers have seen as a practical necessity to save time, costs and manpower.

Because these technologies provide a scalable and secure ecosystem capable of cross-functional integration, cloud computing is an on-demand option for businesses to quickly adopt IT resources as well as remotely access their data anytime and from anywhere in the world.

These benefits position cloud computing as the preferred technology for companies looking to capture the opportunities around a rapidly digitalising retail environment. For example, in Southeast Asia, the cloud computing market is expected to reach US$40.3 billion by 2025, largely due to rising demand from small and medium enterprises (SMEs). In Malaysia specifically, the cloud computing sector is expected to grow at a compound annual growth rate of 13% to US$3.7 billion in 2024.

Delivering a seamless consumer experience

An online retail platform that anticipates customer behaviour is vital to delivering an experience that encourages engagement and repeat visits. E-retailers need to understand their customers well and employ the right marketing techniques to engage them throughout their purchasing journey. But what exactly does this look like?

Businesses should focus on making it easy for customers to navigate their platforms as well as provide multiple payment options, quick online fulfilment, personalised catalogues and enhanced search methods to save each visitor time and effort. These features, paired with reliable infrastructure to minimise disruptions to the buying process, will help retailers stand out online.

Cloud computing is essential to achieving this level of customer experience. Using artificial intelligence and machine learning, cloud technology can give retailers real-time feedback on their customers and enhance their ability to make decisions. It can also help to boost database performance and unlock omnichannel information to create a seamless experience for customers.

For example, Senheng, one of Malaysia’s largest consumer electronics companies, has invested significant resources to upgrade its retail outlets via a cloud-based retail solution during the pandemic. The solution comes with advanced B2C (business-to-consumer), B2B2C (business-to-business-to-consumer) and O2O (offline-to-online) capabilities, allowing its customers to migrate their operations online and manage orders and deliveries efficiently on a single platform.

Accommodating spikes in demand

E-commerce is not only accelerating as a general trend but also concentrating on occasions such as shopping festivals — examples include the 11.11 shopping event in China and Black Friday in the US — where consumption is incentivised through discounts and new product rollouts.

These festivals not only act as sales drivers but also opportunities for brands to boost consumer awareness and engagement. But because of the scale of activity during these shopping periods, merchants need sufficient capacity to accommodate spikes and traffic without compromising on the customer experience.

Cloud technologies have been designed to do this while offering data backup, disaster recovery, virtual desktop capabilities, software development and testing and customer-facing applications for retailers to utilise. The ability to manage periodic increases in online traffic is one of the core benefits of cloud systems. Having a stable platform is critical to e-commerce and even the smallest delays or disruptions can result in significant revenue loss for companies, especially during peak sales periods. Moreover, this stability needs to reach across not only the user interface but also an enterprise’s backend systems, payment gateways and user data.

For merchants looking to excel in digital retail, cloud technology can help them respond to changing market circumstances, overcome competitive difficulties and meet scalability requirements. Additionally, cloud computing reduces costs because it allows businesses to only pay for the IT resources they need. This means companies can experience the benefits of a future-ready platform without incurring the costs associated with developing it themselves.

An example of this is PrestoMall, Malaysia’s largest online shopping platform, which adopted cloud-native database solution to process millions of requests per second while retaining conventional commercial database security, stability and availability. With this next generation relational database technology, PrestoMall will scale and manage its operations more effectively.

Making online retail secure

As e-commerce has accelerated, the demand for a secure online environment has also increased. Consumers want confidence that it is safe to carry out their transactions and retailers need assurance that their applications and programmes will protect against malfunctions and cyberthreats.

Cloud security combines all the aspects of traditional IT security, allowing businesses to enjoy the many benefits of cloud computing while feeling confident about their alignment with data privacy and compliance regulations. If the proper cloud security mechanisms are in place, users can safely access data and applications in the cloud from anywhere and on any device.

Regardless of how long the pandemic lasts, the impact on retail is permanent. The widespread adoption of cloud computing in Malaysia and globally shows no signs of stopping, with merchants embracing a digital-first approach to doing business and engaging with consumers. As 2022 unfolds, the sky is indeed the limit for what the cloud can deliver.

Kun Huang is general manager of Alibaba Cloud Intelligence in Malaysia

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