The Supply Chain Matters blog, and indeed this Editor have communicated to retail industry audiences as to what is meant by the ongoing many dimensions of the termed “Amazon Effect.” They include advanced needs for customer buying insights, customer online experiences and last-mile fulfillment, but increasingly, shunning Amazon Web Services (AWS), the Cloud technology platform which supports Amazon’s online platform in many business process dimensions.
Such an effect clearly involves multi-retailer efforts to significantly grow their online and physical retail sales growth, and with that, countering the perceived threat of Amazon, not only as the dominant online shopping platform, but in potential access to customer buying insights, the secret sauce to the Amazon business model. Protection of customer insights and intelligence has indeed become the retail “holy grail” and not to be shared or compromised with the perceived industry gorilla.
In the specific area of retail industry Cloud platform adoption, we have called reader attention to specific announcements from retailer electing to not at all associate with anything related to AWS.
As an example, in our prior January 28th Edition of This Week in Supply Chain Tech Edition, we highlighted the announcement by Microsoft of a three-year agreement with U.S. supermarket retailer Albertsons, the parent of Safeway and Vons supermarkets to make Microsoft Azure the preferred public Cloud adoption platform. The deal represented another in a series of recent deals involving major retailers, including drugstore chain Walgreens, and U.S. supermarket chain Kroeger, global broadline retailers Walmart and Gap, among others.
Business and retail industry media such as CNBC and ModernRetail are quick to note that these announcements reinforce a growing theme that retailers are indeed shunning technology relationships with AWS. In a published CNBC report, the CIO of Albertsons indicated the choice of Microsoft was due to the tech provider’s existing experience with large retailers, strong technical capabilities and because it is “not an industry competitor.” Earlier this month, ModernRetail published a report with a similar theme of increasing industry Cloud platform adoption announcements that ladder up to a bigger strategy: “Retailers want to rely as little on Amazon as possible while growing their e-commerce businesses…”
This movement has provided added opportunities for other Cloud technology providers as-well.
CNBC noted last week that in a post-earnings call with analysts, the recently appointed CEO of broadlines retailer Macy’s, Jeff Ganette, had briefly mentioned that the retailer was working with Google Cloud to power this retailer’s new Macy’s Backstage Distribution Center in Columbus Ohio, which officially opens this week. The CEO added that the Google Cloud platform will be rolled out to all other distribution centers inn 2020. Google itself cites retail industry lighthouse customers Home Depot Kohl’s and Target, among others.
In November of last year, Google recruited Thomas Kurian, former Oracle Cloud senior executive, as the tech provider’s Google Cloud Chief. Kurian has since publicly announced recruiting of former SAP SE 27-year sales executive Robert Enslin as Google Cloud’s new President of Global Customer Operations. Also recruited was former RedHat and Microsoft sales executive Kirsten Kliphouse to lead North America sales, including small and mid-sized businesses. This provider has outlined Core Pillars of Cloud computing capability, which include, among others. Customer Acquisition and Retention, Omni-Channel Commerce, Logistics Fulfillment and Delivery. The company’s Cloud platform unit has reached $8 billion in annualized revenue with ongoing plans to triple its direct sales teams. Other Google retail focused customers include IKEA, Metro, Ocado and also, Kroeger, and a major healthcare and drug distributor presence in the form of McKesson.
Not to be undone, and viewing clear opportunity, enterprise technology and applications provider Oracle remains targeted on retail industry market penetration opportunities evident with the “Amazon Effect” alive in Cloud tech adoption preferences. Oracle cites family-owned U.S. retail chain Bealls, international retailers Perry Ellis International and Apparel Group, and Nicaragua-based online retailer SINSA as retail customers, among others.
For retail industry line of business, IT and supply chain management leaders, today’s growing online business needs require continual needs for advanced business process and technology innovation, and at the same time, the C-Suite preference to avoid any semblance of Amazon influence on customer data and information. The good news is that Amazon’s competitor’s are aggressively seizing on this opportunity, and retail teams now have the ability to assess and adopt alternative choices.
For supply chain management Cloud based best-of-breed applications providers seeking to penetrate individual retailer or wholesaler opportunities, be prepared for the potential deal-breaker question: Is your platform solely hosted by AWS? Best to have an alternative Cloud hosting provider for retail clients or some highly convincing arguments regarding firewalls of data and information.
From our lens, the most important selection criteria for any retail Cloud platform adoption is consideration for both infrastructure and applications. A Cloud platform should not be just one dimensional in functionality support, for instance retail sales Marketing and assortment planning. Rather, seek out broader based support with the ability to integrate customer intelligence, fulfillment, and key supply chain data and information across all retail fulfillment channels, both online and physical stores focused. Broad based line-of-business, sales and supply chain process support needs need to all be factored.
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