Christmas 2016: How cloud is critical in 2017

Christmas retail figures can cast a spell of hope or despair for the year ahead when they are finally made public in January.

For us, these figures usually reaffirm our forecasts and they also give us greater insight into consumer and retailer habits - vital for both our business and our clients.

In 2017, what this also tells us, is that against the backdrop of political and economic uncertainty, investment in cloud is critical.

Next, are one of the high street giants to reveal shock figures from their festive trading. They saw sales of full-price items fall 0.4% and warned of a "challenging" 2017.

Once a retailer way ahead of the curve with its online operation, they are trailing behind with their various retail management systems - failing to invest in a cloud-based, real-time, multi-channel platform.

Being unable to check stock in store in real-time; not having the inventory systems to see where floating stock is; and having Directory-only Click and Collect service, is certainly proving to be damaging if this years figures are anything to go by.

Marks and Spencer, who have been under the cosh of their peers for some time, have surprised the market with sales in its clothing and homeware division up 2.3% - well above expectations for about 0.5%.

Their sales are not only attributed to a strong online presence but their upsurge in their omni-channel offer. Much like John Lewis, Debenhams and Ted Baker, Marks and Spencer's know what it is to give their customers multiple ways to shop, as well as offering them ultimate convenience and most of all speed.

Retail Store founder Ian Tomlinson said: "Legacy retail management software and systems are crumbling with the strain of multi-channel expansion plans. Profit margin battles between new service demands and their associated costs also continue to put extra pressure on technology for increased efficiency."

Ian warns that although retailers may think that not updating their systems will save jobs and outlay costs, by housing everything including their inventory, stock, delivery and CRM on one convenient cloud based platform — they will not only save money but encourage the consumer to spend.

"Contrary to what some think, the wave of consumer change that is happening across all demographics will affect every retailer, from independent boutiques, department stores through to jewellers and carpet shops alike... It's not a case of 'if' but when.

"The winners are those that hear the heartbeat of the customer. They have rethought and restructured their retail management software to give their customers what they want.

"It's time to reinvent retail for our own individual businesses and give today's shoppers what they need: experience, convenience and connected journeys. Failure to do so, is the biggest risk for any retailer."

With the wheels of Article 50 being put in motion, Brexit is on the horizon and even John Lewis warned of a "challenging" outlook for 2017.

Currency fluctuations born out of the referendum will begin to settle, although the full force of sterlings devaluation will be felt as we start to pay higher prices for imported goods.

We'll see multi-nationals testing the British retailers with some invariable over pricing for imported goods and as business rates are revalued and minimum wages rise, consumers will set the tone for whether they accept the prices hikes or not.

With the likes of Ted Baker promising no price increases in 2017 but others suggesting at least a 5-8% increase in pricing, retailers must take hold of their businesses and strategise with all of the above in mind.

First and foremost, the way they operate and how they interact with the customers must and will change. Knowing what makes their customer tick will no longer cut it. Knowing exactly when, where, how and for how much they want their goods will be key and cloud, as we said in the beginning, is critical.

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