How can Bricks & Mortar Stores Compete in the Digital Era?

Gareth Bridges

I spoke recently at the Retail Innovation & eCommerce Summit 2018[1] in Hong Kong, and it was interesting to see how much modernized technology capabilities dominated the conversation.

Technology has had an enormous impact on the retail sector – not only supporting the rise of online stores, but also in enhancing the operations of traditional bricks and mortar retailers. In today’s ever-changing retail world, many stores are realizing that the best way to keep pace with evolving consumer demands is to deliver a customer experience built for the digital age.

The Changing Retail Landscape

Technology has changed the face of retail, particularly traditional retailers, enabling them to provide more tailored and convenient in-store experiences that can match the growing expectations of customers. Many shoppers still hold dear the attention and service available only experienced when visiting retailers in-person, and expect seamlessness as they interact with the retailer online and in physical shops.

The findings of the Global Interconnection Index, published by Equinix, highlight the increased digitization of the retail sector. According to the report, Interconnection Bandwidth amongst wholesale and retail trade is predicted to grow at a Compound Annual Growth Rate (CAGR) of 59% until 2020. These indicate that in addition to e-commerce companies, traditional retailers are embracing digital business channels for improved customer encounters.

How Bricks and Mortar Stores are transforming?

To enhance shoppers’ experience, traditional retailers have to rethink their technology infrastructure, to design a future-proof architecture which provides direct interconnection to their existing and prospective technology service providers. This simplifies maintaining the status quo for the legacy infrastructure, but more importantly enables the ability to rapidly turn up and develop new and innovative services, such as insights on customer preferences.

Retailers need to adapt their IT infrastructure to enhance the shopping experience and many are embracing innovative technology strategies to improve customer service by integrating online and in-person interactions. From supply chain logistics and delivery handling through to point-of-sale (POS) systems and loyalty programs, technology is key to supporting every stage of the retail journey.

Gareth Bridges speaks at Retail Innovation & eCommerce Summit 2018 in Hong Kong

Retail Transformation in Action

One of Hong Kong’s oldest department stores, Wing On, is a great example. It has embarked on a three-year transformation program in which it focused on enhancing the experience for its customers.

In 2015, Wing On formulated a strategy to modernize and keep pace in a competitive market, part of which involved revamping its customer loyalty program and upgrading internal systems to improve customer experience. In order to achieve this, Wing On needed to update its technology capabilities to be commensurate with its ambitions. This resulted in a three-year program to help transform both the in-store and the mobile experiences of its customers.

To execute that strategy, Wing On needed a long-term partner who could provide the underlying infrastructure required to support its customer experience and business modernization objectives.

Wing On set out to enrich a customer loyalty program that could offer greater personalization and more efficient services to its users. This warranted a full technology refresh of Wing On’s core systems – from networking and servers through to ERP and point of sale (POS) systems, to lay the foundations for a digitally-enabled business. Initially, the plan was to place these applications in the public cloud. However, this resulted in connectivity and long-term cost concerns as the transaction volumes increased, therefore they decided on a hybrid strategy.

Wing On is now using Equinix to host its business-critical data and applications, and gain access to a rich ecosystem of partners and providers to help accelerate its digital journey. Using Equinix Cloud Exchange Fabric™ (ECX Fabric™), Wing On now integrates its cloud-based loyalty program and on-premise POS application, resulting in reliable, high-performance connectivity between systems, ensuring customers now enjoy smooth, uninterrupted transactions.

With Equinix, Wing On is now on the road to digital transformation and is able to modernize its key internal and customer facing solutions. By re-architecting its IT infrastructure and adopting a hybrid cloud approach, Wing On has boosted its competitive advantage thanks to an improved customer experience, and realized significant cost savings of over 60% in the process.

Enhancing Retail Experiences with Interconnection

Today’s retailers need to embrace a modernized strategy supported by infrastructure designed for the digital edge. This way they have direct access to the partners they need to connect with, and can guarantee the fast, secure, low-latency exchange of information needed to be competitive in an expanded marketplace and deliver great service both digitally and physically.

To learn more, retailers can read our Consumer Retail Industry Solution Brief to gain more insights into how they can evolve in a rapidly evolving retail climate.



Gareth Bridges
Gareth Bridges Director, Digital Business at Equinix