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Migrate and modernize

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The evolving retail ecosystem

The Migrate methodology provides retailers with guidance for implementing a standard migration process to migrate technology assets to the public cloud. Building on that process are more complex platforms and workloads that can be migrated using standard migration. Read One Migrate to learn about the options to migrate to Azure using various paths along the migration process.

With the global pandemic in 2020, we observed a substantial global increase in online purchasing of 19%, according to a recent McKinsey study. Customer behaviors changed—and multichannel fulfillment quickly evolved as a commonplace consumer expectation across the world. The "digital-first" consumer journey is now market reality—where your customers are shopping new brands, buying sustainable products, and choosing curbside pickup.

Many retailers start their migration efforts, and deliver repeatable processes to migrate existing infrastructure and workloads from datacenters to public cloud. This connected retail stage of the cloud maturity model involves lifting and shifting infrastructure, data, and applications—moving servers, storage, networking firewalls, and security to the cloud with IaaS solutions to reduce operational complexities, break down data silos, and harmonize data estates.

This evolving global e-commerce ecosystem needs a heightened connection between expectations—before, during, and after purchase. To be able to delight this new digital-first customer, retailers must offer an optimized consumer journey. What does this mean? Delivering omnichannel customer experiences are essential—seamlessly connected physical and digital touchpoints to deliver what customers want. For retailers to remain relevant and competitive and deliver this value-added customer experience, they must accelerate their digital transformation, and mature their cloud adoption.

The cloud delivers the digital transformation that's necessary to meet the demands of this digital-first fulfillment ecosystem. Retailers gain cost savings, increased business agility, heightened data security, and the ability to integrate the latest technology throughout the retail value chain to meet the demands of this customer with instantly changing expectations and personal preferences processed across delivery channels. In this fast-evolving retail context, how do you deliver what your customers want? Read more about retail industry context, assembled by Microsoft and our partner ecosystem.

Analytics-driven, digital-first retail

To be able to fulfill the demands of creating the omnichannel experience, retailers will require intelligent operations—increasing efficiencies across employees and processes—making data-driven decisions with small margins of error (e.g., marketing, pricing, and assortment planning)—handling increasing complexity—working with global partners with full visibility to match inventory levels to demand—and preventing stock-outs or overstocks.

Harnessing data and cloud-based services will be essential in your organization's efforts to optimize operations and create stronger customer experiences. Connect silos with customer behavior data across channels, finances, supply chain, and make it accessible company-wide. Cloud computing, advanced analytics, machine learning, IoT, and mixed reality technologies can empower your organization to reimagine your processes and how you do smarter business with cloud-based capabilities.

To remain competitive and continue to delight customers, it's essential for retailers to uncover customer insights across freshly connected data silos—using a common unified data model that makes use of both structured and unstructured data to better engage with customers in the Analytics-driven retail stage:

  • finding ways of recognizing the customer—gathering data for online channels experiencing huge COVID growth
  • gaining a 360-degree perspective on customer loyalty
  • delivering seamless and consistent multichannel experiences (curbside pickup)
  • humanizing the online experience with live streaming and virtual private shopping—and delivering more personalized, targeted marketing.

Analytics-driven retail's common data model will enable an agile supply chain allowing all parties to interact in a common retail solution by implementing industry priority scenarios. Meeting these challenges will require retailers to advance technology improvements across the supply chain with use cases such as personalization and supply chain optimization.

Reimagining intelligent, data-driven retail

The first step towards an intelligent retail solution with Azure Marketplace is to understand some of the complexities of processing disparate data sources, as the retail sector moves from a reactive to a predictive data model—levering real-time data to predict future consumer behaviors—and taking proactive steps to fix issues before they disrupt operations. Fresh artificial intelligence (AI) and machine learning (ML) capabilities with cloud compute can deliver these predictive insights in near-real time.

More data has been generated in the last 3 years compared to the 30 years before—and AI and ML need a large dataset to learn from and generate high-quality predictions. The retail industry generates 40 petabytes of data an hour that can be levered to build good AI and ML models and deliver predictive insights at scale.

Azure Retail Marketplace's end-to-end solutions

A recent Forrester Consulting study commissioned by Microsoft revealed that 83 percent of retail and CPG (consumer packaged goods) decision makers agree that delivering a connected and unified experience to customers is vital to business success and that the key to creating those experiences lies with digital commerce.

Breaking down these silos, unifying data, and combining with AI and ML-driven insights can help retailers unlock 2-5% to line growth by meeting customer expectations across the customer journey. Your organization can deploy Paas solutions, deploying AI and ML applications and apps that provide one view of data, making use of advanced data and AI capabilities to meet the ever-revolving expectations of the new e-commerce consumer anytime, on any device or platform.

Azure Marketplace is a solutions portal with end-to-end solutions that are Azure-certified and optimized across the Microsoft retail partner ecosystem. Azure offers robust AI and ML applications and apps that can help you meet the challenges of forecasting the preferences of the new retail consumer with a platform-specific—channel context-dependent, and more humanized approach to online shoppers—a digital audience whose preference is always evolving.

Azure Marketplace enables your organization the ability to democratize data by offering partner solutions that your organization can use to quickly and reliably provision end-to-end solutions to:

  • bring together dirty data
  • integrate with partners' data across your retail supply chain operations
  • add AI and ML intelligence to enrich business process and uncover insights

Provision end-to-end solutions from thousands of products from independent software vendors (ISVs) that help you reach successful retail business outcomes and:

  • Access open source software (OSS) and enterprise applications
  • Test pre-configured applications without an Azure subscription or use your credit card
  • Use free trials to deploy and use software in your Azure subscription
  • Confidently deploy—standing up an end-to-end solution reliably, in a few minutes with trusted software vendors
  • learn architectural guidance and implementation help and lever a strong ecosystem of top system integrators and solution architects
  • use Azure, Azure Stack, and reuse your existing software licenses with Bring Your Own License (BYOL) offers to optimize cost

Reimagined retail data model

Predicting preference in future customer behaviors is always challenging. However, you can take action towards modernizing your products, services and business models using SaaS cloud-hosted AI and ML applications and apps that provide a holistic view of data, levering their advanced data and AI capabilities.

Retailers achieving successful business outcomes are embracing digital transformation extending beyond the innovations of PaaS web services development and deployment environments to deploying SaaS AI and ML services —reimagining what retail means—implementing and building a modernized platform to maximize business value while engaging the consumer on any platform with a tailored customer experience based squarely on their preferences at the moment.

Advancing through the stages of cloud retail maturity will required changing to a unified data model for retail operations. Retail operations that take advantage of the latest cloud technologies (e.g., AI, IoT, and open APIs) that enable predictive analytics can progress towards maturing the intelligent retail phase with modern SaaS AI and ML apps and services—but implementing business models of change—building in-house digital capabilities on top of these technologies for continued relevance for the consumer purchase cycle of the near future.

Differentiation in difficult times

According to data from the 2020 Frost & Sullivan Global Cloud User Survey, sponsored by Microsoft, retailers during the global pandemic accelerated digital transformation to improve customer relationships, customer experience, and competitive differentiators through innovative, personalized products. Furthermore, the data reveals that substantive increases in hybrid solution adoption and implementation point to hybrid and multicloud as an increasingly value-added solution for the retail sector.

Multicloud adoption among retailers in 2020 increased by nearly 50%, and hybrid cloud adoption rose by 19%. Retailers are implementing multichannel solutions to develop more intimate customer relationships. An intelligent hybrid cloud platform providing the infrastructure, platform, and tools for management and operational processes across datacenters, multicloud and edge can help.

The study clearly points to an industry trend towards increasing datacenter modernization, and the retail enterprise's embrace of hybrid and multicloud infrastructure, platform, tools, and operational processes. While 44% of retail organizations are currently using hybrid and multicloud services in 2020, 46% have already implemented hybrid and multicloud technologies (and 43% plan such an implementation within two years). Significantly, 59% of companies have started the modernization of their datacenters, and 47% are currently implementing edge technologies.

Figures from the study also reveal what retail companies considered the highest-value features in a hybrid cloud platform—listed here, and ranked by priority:

  • Advanced data management and protection tools

  • Advanced analytics-based intelligence

  • Support for on-premises or edge servers

  • Seamless data migration capability

Unified strategy of the intelligent hybrid cloud

With origins in brick-and-mortar storefronts and distribution centers, the retail industry's focus centers on specific requirements. Your cloud adoption efforts will most likely include a unified operations strategy, with an implementation of a hybrid and multicloud environment. Hybrid and multicloud architectures are uniquely suited to accommodate the retail industry's specific operational requirements—with retailers modernizing workloads by making use of both IaaS and PaaS services.

Retail organizations need both modern services and the resiliency on-site computing offers environments. Some big box retailers have existing brick-and-mortar datacenters, or may have a significant presence in Azure. Or, in response to rapid changes via the global pandemic, their top focus now is keeping employees productive and safe—besides always improving the end-to-end customer experience. After adopting additional health and safety protocols for essential workers in warehouses and retail stores, retailers are implementing multichannel solutions to cultivate digital customer relationships in a retail market where instantly changing customer preferences are limited to neither devices nor platforms.

Consistent governance and management

Retail organizations might have workloads presenting a particular challenge because of their performance and resiliency requirements. If you have distributed locations and need to drive a cloud adoption strategy for assets in those locations, consider a unified operations strategy, and hybrid and multicloud implementation. This strategy can deliver consistent governance and management operations across public cloud, private cloud, and edge locations. For more information, see Introduction to unified operations.

Azure Stack can consistently build and run hybrid applications across datacenters, edge locations, remote offices, and clouds. Innovate how you provision and manage on-premises workloads with full Azure integration, and consolidate legacy infrastructure with cost-optimized, pre-configured hardware

We recommend that retailers implement a unified operations approach to cloud management before proceeding with hybrid and multicloud adoption at scale. Azure Arc simplifies management of complex, distributed, hybrid operational environments. It provides a cloud-first strategy operated from one dashboard, extending scalable, and consistent multi-cloud and on-premises governance and management across your distributed environment.

Azure Arc delivers further integration between management of Azure services and on-premises infrastructure. Azure Arc can manage virtualized and containerized workloads running on Azure Stack hardware, making use of the compute and cloud capabilities of Azure Stack.

Next steps

The following articles take you to guidance found at specific points in the cloud adoption journey. This guidance helps you succeed in the cloud adoption scenario.