The retail industry has gone through a period of transformation, digitizing to meet changing customer shopping behavior and demand for digital experiences. But, as the network comes under increased pressure, the retail industry has a role to play in balancing this through smart infrastructure solutions. Henk IJspeerd, Director Key Accounts Retail EMEA, Vertiv, tells us more about the current infrastructure needs of retail organizations and why they should plan for the long term.
What is driving the digitalization of the retail sector?
The retail sector is a rapidly changing market segment. Not only does the industry take care of data centers, but it also has to take care of IT, communications, headquarters and thousands of warehouses and stores in the country or across Europe.
Driving these changes is consumer buying behavior, which is now overwhelmingly online. When COVID hit, for example, organizations had to shift to an online-only model, quickly mobilizing processes and logistics to be able to cope. Any problems in the process will quickly deter customers. A smooth buying journey is therefore crucial.
Added to this is the obligation to comply with local or international regulations relating to environmental factors. For example, in the Netherlands and Spain there is not enough electricity available, so companies have to compromise and provide grid support. This impacts the approach to the UPS and IT infrastructure, so companies need to evaluate how best to design their infrastructure to meet these demands.
These companies also need to think long-term when planning their infrastructure – what will be needed in 10 or 15 years, for example. Planning ahead requires a cross-organizational strategy, integrating IT and building management teams, as well as other stakeholders.
What pressures is this demand for digital putting on retail infrastructure?
There are multiple pressures on the retail infrastructure. Take CCTV, for example, which requires the storage of hundreds of images – all of which must be kept in a secure and regulated environment, thus stored in a separate cabinet.
Then there is the large amount of data that is stored, which helps provide personalized experiences to customers based on their preferences and any special offers that match those preferences.
To be able to provide these services and optimize the infrastructure, there must be standardization between different countries or regions. Solutions must also be flexible and scalable – a challenge given that there is no crystal ball to see what the requirements will be in five or ten years.
We know that organizations will need to install more IT equipment and that they will need to ensure that the network is stable.
Right now, we’re seeing many retailers opting to purchase larger, scalable inverters that start with 10 minutes of runtime and can grow as they see fit. These items are becoming increasingly 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 price and availability, but will always choose based on what’s coming tomorrow.
If retailers want to survive in this market, they need to have optimized systems, good stock levels and well-organized transportation systems. Customer experience is crucial – if you go to a store for example and you can’t find what you’re looking for on the shelf, you’ll go somewhere else and, if it’s a good experience there, from then on- there you will probably buy more in this store.
These days people will go online to find the perfect jacket and it’s important that the product is also available in-store – if they can’t find it, they’ll go elsewhere.
What are the main requirements of retail organizations when it comes to ensuring they have a robust infrastructure?
While data centers are clean environments, retailers have warehouses where they need to reduce the amount of square meters due to annual costs. It is often placed in a corner of the warehouse where it is dusty, where the temperature and humidity are variable. We build solutions specifically for these types of environments, as well as their maintenance and support. Again, it is important to standardize.
For stores, it’s even worse. Imagine a store in Cyprus versus one in the UK. Cyprus is 40 degrees Celsius and higher in the summer. As the trucks arrive, the doors open to unload the truck, which increases the temperature in the store warehouse itself, and you can bring in dust. Therefore, we build special solutions such as integrated cooling with dust resistance and monitoring solutions. .
We discuss with the client to find out what he expects for the next five, 10 and 15 years. Then we design and build a scalable and extensible solution for them.
How can organizations ensure the continuity of critical activities, while being able to adapt to changes in size and complexity?
Business continuity is extremely important because businesses cannot afford any downtime. However, the network is increasingly failing and we are installing more and more solar panels and wind turbines as renewable energy sources.
We also live in a time when electric cars are becoming more and more popular. When people come home from work between 5 p.m. and 8 p.m., they charge their cars. If there are 100 cars, it’s not a problem but when you’re talking about thousands, the field in Europe is not ready for that.
Grid providers will ask retailers to provide support, whether through scalable inverters, installing solar panels or wind turbines, as we do in Spain for some of our customers, and then storing the energy in the batteries of the inverter.
If the grid failed, leaving no electricity in a store, they would have to throw everything away, which would cost hundreds of thousands of euros. This is a critical situation and it will become more and more so due to the increasing pressure on the network.
I think retailers will play a crucial role in solving some of these network challenges.
What advice would you give to retail companies currently evaluating infrastructure investment opportunities to ensure they are future-proof?
I reiterate that organizations need to think about the future. Try to standardize and consider not just 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 do that, the total cost of ownership of the whole environment will go down, and that’s what everyone wants to achieve.
Think about the future: consider the growing instability of the grid, and consider Edge Computing and if it’s an area you want to invest in.
The conversations taking place in this sector are extremely interesting, but also challenging. That’s why organizations need help and support from companies that have experience with data centers and custom solutions.
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