The retail revolution: How network modernization is shaping the future of shopping

• Reliable network solutions help retailers in delivering exceptional experiences for demanding shoppers and address competitive pressures.
• NaaS is the next evolution in providing the necessary flexibility, scalability, and cost-efficiency to meet rapidly evolving business priorities.

As the retail landscape evolves, legacy network systems and architectures struggle to meet the demands and expectations associated with the future of retail, particularly as brands rapidly digitize to embrace Retail 4.0.

Most retailers in the Asia Pacific (APAC) region anticipate an increase in operational costs in 2023 and are thus seeking cost-efficient solutions to stay competitive. Traditional networking systems like Multiprotocol Label Switching (MPLS) provide security and reliability but are costly and inflexible, proving inadequate for modern, cloud-first businesses needing scalability and robust security for IoT devices.

These legacy network architectures are ill-equipped to manage the real-time data needs required for a seamless omnichannel shopping experience. They are labor-intensive to maintain, particularly for global businesses, and contribute to a larger carbon footprint due to their energy inefficiency, which is a concern for retailers striving for sustainability.

The answer lies in adopting a comprehensive network strategy that meets today’s digital and agility demands while aligning with modern businesses’ sustainability goals.

Tech Wire Asia recently discussed the role of network technology in driving the customer experience with Mark Verbloot, Senior Director, Products, Solutions and Systems Engineering, APJ, HPE Aruba Networking.

Reimagining the retail experience: Harnessing network technology

Verbloot states that reliable network solutions aid retailers in delivering exceptional experiences for demanding shoppers and address competitive pressures. Customers today expect a reliable network connection both in-store and online, with immediate access to information and services.

He emphasizes, “A robust networking solution provides retailers with the means to deliver fast, responsive services, ensuring customers receive services when they need them, ultimately reducing the chances of customer dissatisfaction and shopper abandonment.”

The rise of IoT devices in retail necessitates fast, reliable network connectivity for real-time data delivery and insights. This facilitates personalized customer experiences and efficient security monitoring, crucial for digitally transformed retailers. A high-performing network is essential for leveraging IoT devices for streamlined processes, cost reductions, and enhanced outcomes.

Verbloot posits that a significant benefit of a modernized network is the ability to fully manage it from the cloud, eliminating the need for additional infrastructure. Moreover, a cloud-managed network paves the way for artificial intelligence (AI) operations. He says, “With AI, retailers can access network insights and reduce time spent on network troubleshooting and optimization. Amid the accelerated push for cloud adoption, a cloud-managed network will enable retailers to meet customer demands for fast and reliable services.”

According to Verbloot, APAC retailers recognize the need for tailored customer experiences but face hurdles in digital transformation. Many struggle with IT skills shortages and escalating tech complexity, impacting security and customer satisfaction. Despite the potential rewards of digital transformation, costs and time investments pose challenges for resource-limited firms. However, solutions like affordable, reliable software-defined wide area networks (SD-WANs) provide a pathway for these retailers to modernize and compete effectively.

He added that a predictable and secure network infrastructure can assist IT teams in delivering an excellent retail experience by expanding and securing their network infrastructure right to the edge, where people and devices are, ensuring IoT devices are well-connected.

“In doing so, IT staff can spend less time troubleshooting and maintaining the integrity of security systems, which ultimately frees up resources for future innovations,” he said. “Moreover, with a surge in automation and predictive technologies to meet customer demands in real time, network technology will be pivotal in driving silo-free connectivity and immediate data delivery for intelligent inventory insights, thereby relieving the burden on IT teams.”

The Promise of Network-as-a-Service

A key benefit of a consumption-based, cloud-like subscription model, like network-as-a-service (NaaS), is that it eases retailers’ concerns about the adaptability of their network. NaaS provides retailers with a reliable, scalable network solution that lets them quickly adopt new technologies without worrying about network uncertainty.

Verbloot comments, “Being able to scale up or down according to unique business needs is crucial to customer loyalty and company revenue. Leveraging subscription-based payments, NaaS offers a pay-as-you-grow model that includes a complete network solution, providing retailers with scalability and financial flexibility to deliver business outcomes in response to sudden changes in demand. With labor and skill shortages impacting nearly all industries, this flexibility will be key in freeing up time for IT teams to focus on more strategic business outcomes.”

Retailers also face the challenge of addressing an increasingly fraught cyber threat landscape. While managing the network to avoid security threats can be taxing for IT teams, especially with legacy networks that lack sophisticated security protocols, NaaS offers digital insights and reporting capabilities that help retailers maintain network security for their customers. Since 88 percent of APAC customers would consider switching if companies do not properly manage digital trust, retailers must protect their brand reputation.

Braving the fourth industrial revolution: A shift towards smart retail

The Fourth Industrial Revolution is altering consumer behavior and intensifying competition, with customers demanding seamless experiences across channels. IDC anticipates APAC’s IoT spending to increase by 11.8% CAGR from 2021 to 2026, resulting in more connected devices. Retailers are therefore adopting “smart retail” strategies involving automation, robotics, and gen AI. As these technologies demand more networking bandwidth and specific network requirements, retailers are opting for distinctive networks to fulfill their digital transformation goals.

Verbloot notes, “To remain competitive and overcome economic and labor realities, the need for operational efficiency is driving the adoption of advanced network solutions. A secure and intelligent network fabric forms the foundation of any business’s digital transformation—enabling retailers to support growing business demand by providing access to the digital resources needed for operational success.”

He also suggests that a secure, intelligent network fabric can address challenges in retailers’ digital transformations. Network modernization, including secure access service edge (SASE) solutions, is crucial for cloud migration and workload security. It reduces equipment sprawl and the need for IT staff, providing an enhanced network experience while cutting costs.

Upgraded Wi-Fi systems in stores, for example, can handle increased internet demand, enhance security, and serve as IoT gateways for seamless device integration. Network modernization also allows for replacing power-inefficient equipment with energy-efficient alternatives like programmable Wi-Fi radios and sensor-based lighting, aligning with the growing environmental consciousness of APAC consumers.

“We continuously talk about how retailers need to enhance the customer experience by providing personalized experiences that are seamless and secure. In many cases, technology investments to meet these expectations don’t always yield the expected business outcomes due to budget and resource constraints. As such, an as-a-service mindset in network modernization is increasingly the way to go, as retailers look to capitalize on their digital transformation initiatives,” Verbloot concludes.

While a cloud-like experience for networking has become the standard, retailers must also recognize that NaaS is the next evolution in providing the necessary flexibility, scalability, and cost-efficiency to meet rapidly evolving business priorities. Comprehensive NaaS solutions offering greater flexibility and more proactive management capabilities while minimizing upfront working capital will be critical for enhancing the customer experience and staying ahead of the competition.

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