From maintaining supply chains to reimagining stores to safeguarding privacy, today’s retail and consumer goods companies are under constant pressure. Meanwhile, global e-commerce sales are set to exceed $5 trillion this year.

To manage challenges while capitalising on e-commerce growth, retailers of all sizes are turning to the agility provided by the cloud. With a robust cloud infrastructure, retailers can deliver seamless unified commerce operations, personalised shopping experiences and supply chains that thrive. 

In short, the cloud offers retailers speed and scale. But is there even more hidden value?

To understand the true challenges and value of cloud e-commerce, we surveyed 50 global companies for the white paper “Steering Through E-commerce Disruption with Cloud”. The result is high-impact use cases spanning everything from customer profiling to virtual products and personalisation to real-time inventory visibility.

Four critical challenges facing retailers today

The white paper reveals that robust e-commerce starts with acknowledging the following challenges:

1. E-commerce platform performance depreciates during peak traffic seasons. Occasions like “Black Friday” and “Singles Day” are crucial e-commerce events, but the skyrocketing sales come with spikes in consumer traffic. Traditionally retailers plan early, by locking digital experiences and going into code freeze in early fall. A newer tactic is to spread out holiday spending, with retailers offering holiday deals as early as October. This reflects a shift from managing one or two demand spikes to handling sustained spikes over longer periods of time.
2. Data siloed across multiple channels curbs customer acquisitions and loyalty. Last holiday season suffered 6 billion out-of-stock messages due to supply chain shortages. Retailers need to unlock siloed data and move to a holistic view of their supply chain, to handle demand spikes, enable real-time delivery tracking, and offer the personalized experiences that drive loyalty. 
3. New e-commerce engagement models can be difficult to integrate. The convenience economy has encouraged some retailers to go storeless and pivot to direct-to-consumer platforms. But this provides a lacklustre shopping experience, which pushes them toward social media and new engagement models like live commerce, social commerce and gamification. Working with these models requires rapid integration without compromising security, privacy, check-out speed and platform performance.
4. Deploying e-commerce use cases at pace requires new-age technology integration. Retailers are continuously experimenting with ways to deliver new-age experiences and cater to customer preferences. To do this, they need technology-enabled capabilities that can streamline their e-commerce operations. Cloud seamlessly integrates new-age, resource-intensive technologies such as AI, mixed reality (MR), Internet of Things (IoT), metaverse and blockchain to deploy e-commerce at pace.

The future of e-commerce is in the cloud

According to data presented in the white paper, more than 60 per cent of the total e-commerce workloads function on private and public cloud platforms. By 2023, this number is expected to grow to about 85 per cent. 

By enabling e-commerce in the cloud, retailers can realise the following benefits:

• On-demand scalability to meet peak traffic and demand.
• 360-degree, real-time data visibility across supply chains, customer engagement touchpoints, and operations.
• Flexibility to customise digital platforms to deliver unified commerce experiences.
• Secure online transactions and data privacy.
• Faster online searches and personalised recommendations.
• Agility to integrate new-age engagement models at scale.

Retailers are betting on cloud e-commerce to provide the agility required to meet the demanding pressures of today and the uncertainties of tomorrow. Cloud-enabled retailers say “bring on the uncertainty”. Do you?

Read more about how 50 of the world’s largest retailers are adopting e-commerce in the cloud to drive business innovation in the white paper Steering Through E-commerce Disruption with Cloud.

About the authors: Sid Jatia is GM worldwide business strategy, retail and consumer goods industries, at Microsoft. Mike Edmonds is senior director, worldwide retail and consumer goods strategy, at Microsoft.