Five ways SD-WAN can support retailers’ digital transformations

These digital strategies can help merchants enhance the customer experience and stand out from competitors — now and in the future. By John Tait, Global Managing Director, TNS Payments Market.

The COVID-19 pandemic has forced retailers across the globe to rapidly adapt their tried-and-trusted business models to meet the new and shifting needs of their customers. With consumers changing how they shop for, pay for and receive purchases of all kinds, it’s the retailers that were more progressed in their digital transformation journeys that have been better able to weather these changes to consumer buying habits. Even post-pandemic, retailers who have invested, or are investing, in digital capabilities will be positioned to create customer experiences that help them stand out, using technology-based strategies.

To support these future strategies, however, retailers must implement a connectivity foundation that is more secure, more scalable and more reliable than the traditional MPLS model. For any retailer with more than five locations and more than 100 employees, software-defined wide-area networking (SD-WAN) can provide the connectivity backbone that allows business workflows to remain agile and perform optimally.

Because SD-WAN can connect dispersed locations over multiple geographical locations and use the best network route available at any given time, it allows different types of network traffic to be prioritised as needed. This provides for redundancy and a seamless user experience, but it also allows retailers’ networks to be more dynamic. For example, using a combination of managed wireless and IP connectivity with SD-WAN instead of purely MPLS can lower or eliminate circuit costs for retailers operating in a mix of rural and urban markets.

Diversity of managed communications, combined with the intelligence of SD-WAN, can improve cost and uptime, which reduces the risk that POS terminals will go down and business is not interrupted. It can be layered on top of any connectivity solution to securely connect users with applications, including those in the cloud.

SD-WAN offers retailers the connectivity capabilities they need for in-store and e-commerce digital transformation initiatives. Here are five strategies it can support.

1: Offer customers free Wi-Fi — and use it to gain insights

While not all consumers will return to shopping in physical stores, it is likely that most of them will. After all, plenty of people like to see options in person, browse, find deals they might not see on a website, or just get out of the house. And wherever they go, consumers will expect to have connectivity, which means free Wi-Fi is becoming a must-have for retail sites.

SD-WAN enables retailers to securely add on a free Wi-Fi solution for customers without affecting the connectivity layer that supports payments terminals or other digital initiatives in a store. And this free Wi-Fi isn’t just a perk for customers, retailers can harness analytics from the Wi-Fi to obtain valuable insights about shoppers’ patterns, behaviours and preferences.

For example, Wi-Fi analytics can tell retailers whether the customer is a first-time or frequent visitor. Wi-Fi analytics can demonstrate how much time a shopper has spent in the store and where in a store they spent it, as well as aggregate data about overall shopper behaviour. Using this aggregate data, retailers can revamp their store layouts to increase sales by highlighting popular items, placing less popular items near better-selling ones and positioning promotional or add-on purchases near frequently travelled areas.

2: Engage with customers digitally

Even if some consumers aren’t physically coming to a store, they still want expert opinions, so some retailers have started to implementdigital concierge services. Consumers can still have the same white-glove experience they’d get in a physical store by being able to ask questions and view options via video conferencing.

This is a trend that may continue after the pandemic, especially for products that require highly specialised knowledge like diamonds or audio-visual equipment. Retailers can use their best experts to virtually help customers all over a region rather than staffing people at every location. SD-WAN can help manage high-bandwidth applications such as live video and clear audio and video by optimising network traffic.

Other retailers have moved away from “try-before-you-buy” tactics for safety and hygiene reasons and toward augmented reality (AR) solutions. For example, some beauty stores no longer allow customers to try out a new lipstick shade by applying a sample to their lips, for hygiene reasons. Instead, stores can use AR mirrors that show the customer what the lipstick looks like on them — touch-free. Delivering responsive, smooth AR requires both sufficient capacity on the network and the ability to manage traffic, to protect the AR traffic from jitter and packet loss.

3: Use smart cameras to rethink store layouts

Today’s security cameras aren’t just useful for catching break-ins and providing surveillance. New always-streaming smart devices can capture shopper patterns that can drive strategy and improve decision-making. Retailers can see what’s happening at their physical locations, observing foot traffic patterns and gauging customer reactions to learn more about shoppers’ preferences and their intent to purchase.

Cameras can provide actionable insights to improve in-store offerings, maximise the placement of sales associates and in-store displays and even develop individual promotions. While tying these into a store’s analytics and network means there are even more devices on a retailer’s network, SD-WAN allows retailers to manage traffic to avoid a network from overloading.

4: Accept and securely support omnichannel payments

Consumers haven’t stopped buying, but they have changed the ways they shop and pay for goods, with many turning to e-commerce, mobile apps or curb-side pickup. This new desire for a variety of payment and buying options isn’t going away, and retailers must deliver on it. SD-WAN’s ability to expand connectivity over a wider area allows retailers to take payments in more places — outdoor terminals, pay-at-the-pump options, self-service kiosks and even via mobile POS terminals, like tablets.

While flexibility in where and how payments can be processed is ideal for the consumer, it can create cybersecurity risks. This is because more payments devices mean more points of interaction to and from apps or internet breakout. Proper security controls, especially for payments, are critical.

SD-WAN enables retailers to securely connect all types of payments options, as well as any other devices and networks within a retail environment. Depending on the equipment and/or vendor, SD-WAN can also protect sensitive personal and financial data and traffic, which is key for the retail industry. Regulatory compliance with PCI DSS security credentials is, of course, also critical within a retail environment, and some SD-WAN solutions available today have been designed to incorporate PCI DSS requirements.

5: Optimise the supply chain and inventory systems

The supply chain issues that some retailers experienced earlier in the COVID-19 crisis demonstrated the importance of being able to efficiently manage supply chains. Especially as shoppers demand more e-commerce options and faster delivery, retailers must be able to quickly perform inventory checks, automate orders for high-demand stock, and track orders in real time. SD-WAN can help retailers streamline operations and eliminate any network downtime, so all systems stay up and running.

What’s more, several retail giants have begun to blend their stores and inventory centres, which suggests that the lines between brick-and-mortar and e-commerce will become even more blurred. For example, while big EU-5[1] retailers such as Tesco and Carrefour have expanded online with in-store inventory, Amazon — the original e-commerce company — has been rolling out physical stores in select cities.

The good news is that retailers don’t need to be a global brand to exploit the advantages of connecting their business over SD-WAN. SD-WAN helps mid-sized merchants who want to set up a mobile order/e-commerce fulfilment centre, a ghost kitchen to expand service areas or a seasonal kiosk location to test demand before committing to real estate. SD-WAN allows retailers to interconnect these new channels and locations in days rather than months through fast deployment of equipment and connectivity.

This means retailers can gain a larger yet flexible footprint without committing to another fully outfitted customer-facing storefront. And by prioritising bandwidth-intensive retail workloads, such as retail analytics and inventory systems, SD-WAN can improve bandwidth efficiency and optimise inventory operations and productivity.

Prepare for a new future

To support continued digital transformation, remain agile in the face of change and improve in-store and e-commerce customer experiences, retailers need to simplify, secure and improve their network across all branches and locations. SD-WAN can consolidate point solutions, simplify network management, provide visibility into data applications, and support new bandwidth-intensive digital strategies, all while supporting business-critical applications so that payments stay up and running.

However, some retailers may be challenged to implement this technology, either because their in-house IT staff doesn’t have the time, or because they don’t have in-house IT. Fully managed solutions can help in this instance: they remove the hands-on work of deployment while giving a business all the capabilities of SD-WAN, allowing retailers to focus on transforming the customer experience, not their network.

[1] EU-5 countries of France, Germany, Italy, Spain, and the United Kingdom

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