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Why Retailers Should Care about the Economic Value of the Software Defined Store

Adapt or perish, now more than ever, is the retailer’s imperative. Stores face new customer expectations, new competitive business models, and new technology options of a scale not experienced since the first birth of the internet. Those who innovate, invest and engage customers in new ways will prosper. Those who do not will get left behind.

Information technology sits at the heart of this imperative. IT must be managed as a business strategy enabler and be evaluated on how cost effectively it provides a long-term platform for the delivery of the in-store strategy, not simply on how it can fix the latest fire drill.

In a fast-changing retail environment, when new technology innovations, and new demands for business innovation, are coming thick and fast, taking a device by device approach to implementing new applications in-store is unsustainable. Even in a stable environment this approach leads to ever increasing hardware and support costs and unacceptable lead times.

What’s required is a more strategic approach to long term IT investment planning and an understanding that multiple new store workloads, applications and lines of business will be needed in the foreseeable future. This blog post explores how retailers can benefit from moving to a Software Defined Store IT strategy.

How do you enable Software Defined Stores?

The Software Defined Store has two key components: in-store virtualization and intelligent automation. Unlike a traditional data center approach it involves implementing automated virtualized servers in-store. Once installed you can deploy multiple applications as required. Intelligent Automation controls the provisioning, patching and configuration of multiple in-store virtualized servers across a large distributed retail store estate. All stores are controlled as an integrated whole, not separately.

It delivers the flexibility, innovation and IT bill reduction that retailers need, and provides a long-term platform for business optimization – be that from cost reduction, customer experience, or process rationalization – without a significant increase to immediate up-front costs.

The Value of Business Agility

According to research conducted in 2018 by RSR, 71% of Retail Winners name “getting technology rolled out to stores” as their top requirement to make stores more relevant to customers. This leans heavily in favor of the Software Define Store approach; for speed of reaction to market conditions is now a key competitive differentiator. Retailers need to predict or intercept changes in demand profiles and respond quickly to gain first to market advantage. Achieving this often requires the deployment of new application technology across the store estate, and this needs to be done as quickly and efficiently as possible.

Imagine you are a retailer that has three new in-store applications that must be rolled out this year, plus a predicted 3 further workloads, yet to be defined. You can either roll out a dedicated device for each application, or 1 virtualized server that can run all known and unknown applications, with massive cost savings.

Retailers want to test and deploy new applications in-store with minimum time and resource. If unsuccessful, they want to remove them quickly. Traditional device based IT is a barrier to this kind of responsiveness. Software Defined Stores make it happen.

If retail store IT investment continues to be evaluated purely on a stand-alone project by project device orientated basis, then the right steps will not be taken to put in place the platform that is needed to revolutionize in-store IT cost and, most importantly, the customer experience. The gap will only widen between what the customers want and what the store can deliver. To put it another way, when you look at store IT investment, you have to see the movie through to the end, and not make your call after the opening reel.

The other major direct economic benefit of the Software Defined Store comes from increased support efficiency. Break-fix for device driven applications requires site visits, usually costing around $500 per visit for software corruption issues, or other problems that require a software install. For the Software Defined Store this is not the case. Testing, diagnosis, and bug fixing are centrally controlled and implemented without site visits, drastically reducing Mean Time To Repair (MTTR).

Removing Barriers to Acquisition

If a retailer is acquiring new stores, they must be integrated into existing applications and processes as quickly and cost effectively as possible – only then can the full benefits of acquisition be realized. Creating a store golden image, and then deploying remotely across Software Defined Stores, makes this possible.

 

Operational Cost and Efficiency

Adopting a Software Defined Store strategy delivers immediate cost savings and operational efficiency, that far outweigh any initial upfront cost increase from virtualization, resulting in a compelling business case:

  • Image management and reliability: Moving to a single managed software image across all stores results in increased reliability, reduced break/fix and site visit costs, and increased revenue from reduced lane downtime and abandoned baskets.
  • IT simplification and consolidation: Moving from many dedicated servers with multiple applications to a lean virtualized server environment with integrated secure remote access results in savings in licencing and support costs for every store.
  • Centralized management: A singular view of performance and availability speeds up and accelerates diagnosis and resolution of issues resulting in huge reduced IT effort and cost.
  • Compliance: Moving to virtualized stores with intelligent automation means that compliance dependent updates can be automatically and speedily deploy.

The Retailers that are Staying Ahead of the Game

Some retailers have already recognized the benefits of the Software Define Store virtualization method:

We wanted a solution that could transform our Jersey Shore stores checkout speed while leveraging our existing technology investment. The speed within which this has been achieved by Zynstra’s Virtualized Tablet POS solution has been excellent. The customers are happy, the staff are happy and it provides us with a platform for rapid innovation as we accelerate towards software defined stores.

John Collier
CIO, Wawa

Wawa is applying this digital integration strategy to modernizing checkout , creating a virtualization layer for its point-of-sale (POS) platform that allows store associates to move about the store and complete sales with a tablet computer. This mobile approach not only helps reduce checkout lines but also frees up store associates to spend more time catering to customers.

Store IT infrastructures today are complex and expensive to maintain. By shifting our store infrastructure from a hardware centric to a software focused approach, we will be able to increase our speed-of-service, quickly deploy upgrades across our network of stores and add new features and innovations including cloud-enabled services across our chain.

Mike Rodgers
Chief Strategy and Information Officer
Pilot Flying J

Pilot Flying J is also taking advantage of this new approach. By virtualizing back and front office store technology with intelligent automation, PFJ significantly reduces the number of servers and hardware to maintain. This simplifies maintenance and enables systems to operate on multiple devices.

Discover more about the Economic Value of the Software Defined Store:

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