Why Cloud is the Perfect Match for E-commerce
Since the inception of the Internet, e-commerce was seen as a plausible channel for conducting business soon. However, the capabilities of the World Wide Web were not quite there yet for organizations to make bold investments. But the time has come: we are officially living in the era of e-commerce and online shopping, and cloud solutions have tons to offer for the sector.
The E-commerce sector has been growing in the past decade at a rate that no one has ever witnessed before (except for Bezos and a few others), and it has now become one of the fastest-growing industries in the world. But how did this happen in such a short period?
There are several factors are in play; however, some are more obvious than others. The Covid-19 pandemic has changed a lot in our everyday lives, and online shopping is one of them. During the pandemic, people were forced to stay home for extended periods and bought almost everything through online channels due to strict lockdowns and regulations.
This changed two things in the landscape:
1) Consumer trust has improved in e-commerce, with more and more people buying their needs online and getting used to the convenience of high-speed delivery, product diversity, payment options, and enhanced customer support.
2) Technological advancements and digital platforms like social media have created a marketplace suitable for online transactions, thriving competition and innovation in the sector.
According to Deloitte, there are three main reasons why e-commerce accelerated and transformed the entire market:
1) The rise of fast-changing consumer preferences, shifting demographics, and mobile-centric consumer behaviors
2) Increasing competition from both small and nimble startups and forward-leaning large players who use digital and data-driven methods to snag new customers and retain existing ones
3) The always-on, buy-anywhere expectation of today’s customer has blurred the lines between e-commerce only and brick-and-mortar corporations
With increased demand, brutal competition, rapidly shifting consumer behavior, and technological advancements, e-commerce enterprises constantly searching for innovative solutions to effectively battle such challenges and create unprecedented value for their customers as well as themselves in the long run.
In this article, we will take a deeper dive into the capabilities of the cloud and its unique value proposition for the e-commerce sector.
1) Cost Reduction
Cloud solutions provide various cost management options and benefits for the e-commerce sector. The first of them is infrastructure costs. In this day in age, e-commerce companies require investments in IT infrastructure, hardware, and data storage/management, which generally costs a small fortune. By migrating to the cloud, enterprises can seamlessly avoid infrastructure costs, increase their profitability, and allocate their resources to the fields essential for growth. Switching to the cloud also helps organizations to reduce maintenance costs affiliated with IT operations. Companies can reduce downtime and avoid bottlenecks/failures caused by on-premise hardware, which can help minimize operational costs. Also, cloud providers offer flexible payment options like pay-as-you-go and subscription-based models that help companies monitor their cloud costs and make budget adjustments respectively.
2) Operational Efficiency & Productivity
Even though companies in the e-commerce sector desperately need operational efficiency and productivity to survive in the competitive landscape, these are not easy to achieve due to the nature of business. Making efficient decisions and predictions in the e-commerce and online shopping industry is quite challenging due to fluctuations in demand, changes in consumer behavior, global supply chain disruptions, and complex logistics. Managers need real-time data and collaboration tools to build strategies to enable teamwork and maximize operational efficiency. Cloud solutions just do that: It enables real-time seamless collaboration of employees with tools that already exist in the cloud, improving overall productivity throughout the stages of operations. With real-time data, managers can allocate labor and resources effectively and optimize the use of company assets. Seamless integrations with 3rd party apps also give employees the freedom to use apps they like and prefer, thus further increasing productivity.
3) Scalability
When it comes to E-commerce and online shopping, scalability is one of the must-haves for a sustainable business. Most e-commerce businesses do not plan out how they will scale up and grow in the beginning, which turns out to be a great mistake, especially after spending thousands of dollars on on-premise IT solutions that prevent seamless expansion over the long term. Cloud solutions create the right environment for scalability and growth by providing highly personalized cloud tools that enable purchasing, tracking, monitoring, and analyzing products and assets, allowing high automation and scalability throughout daily operations. Managers can easily adopt demand increases, allocate resources efficiently and help the growth efforts of the organization. Retailers can manage stocks with real-time data, avoid bottlenecks and expand their operations globally with minimal adjustments. Inventory managers can easily track operations and take appropriate measures for optimizing production. The cloud’s flexible and highly customizable infrastructure assists companies in restructuring their organizations based on market requirements and consumer behavior when expanding new territories so that they can adjust their business plan accordingly.
4) Reliability
In the e-commerce sector, a reliable infrastructure can help build a flexible and trustworthy bridge throughout all associated parties, manage potential risks along the way, and drastically improve customer experience. Cloud solutions help companies create a reliable system that on-premise IT solutions often fail to provide. Cloud tools offer a flexible infrastructure for e-commerce companies by allowing real-time tracking, data analysis, and traffic management. Cloud also has Content Delivery Networks (CDNs) that can cache and distribute content to servers in different geolocations. CDNs further minimize latency and accelerate load times, enhancing the reliability of the service in the eyes of customers. IT services companies can also seamlessly access the systems in case of any emergency and provide instant support from anywhere in the world that has an internet connection.
5) Integrated Services and 3rd Party Integrations
E-commerce services are widely dispersed due to technological availability and the customer-oriented omnichannel approach of the sector, where tools and apps are integrated so that the users have a unified online shopping experience. With seamless integration with 3rd party apps, the cloud offers personalized solutions regarding tracking, monitoring, and planning activities. Companies can integrate their CRM system into the cloud, enhancing customer experience by better engaging with them in real-time. Seamless integration of 3rd party apps also enables a smoother supply chain with shared real-time data between parties, highly automated operations, and efficient logistics. E-commerce firms can better track their shipments and can seamlessly scale up and expand different geographical locations by simply selecting and integrating the app used predominantly in that area, reducing deployment time and additional costs.|
“There is a competitive advantage to being able to tell your customers that whatever system they use, you can easily deploy, easily integrate.” – Mathias Schlecht, CEO, Biota |
6) Enhanced Security
The E-commerce sector came from humble beginnings. At first, people were very skeptical about giving their personal information and money for a product they can’t even see and can not be sure they will receive. But over the years, with increased competition and the age of social media and cloud technologies, the industry has come a long way. In today’s environment, cyber security is one of the key aspects of the e-commerce sector, with the ever-growing number of data breaches and conscious consumers in the market. A tremendous amount of data of all sorts is collected in e-commerce, and the online shopping sector itself, and this data should be stored securely by companies so that e-commerce can flourish. Cloud solutions provide enhanced security options for the e-commerce sector, allowing complex operations to run smoothly by accessing reliable real-time data. Companies can store and transfer their data securely with data encryption so that important business information could not be exposed. Multi-factor authentication also enhances security efforts by requiring users to verify their accounts from different sources, adding another line of defense. Data can also be backed up seamlessly with the cloud when there is a system failure, allowing organizations to maintain operational efficiency and agility in times of crisis. Fast recovery of data enables e-commerce firms to react quickly to technical issues, conduct effective risk management practices, and minimize operational costs. The cloud also offers services that can detect security threats and prevent possible breaches by analyzing e-commerce traffic and exposing dangerous accounts and malware. With regular audits and assessments, cloud providers continuously upgrade security features so that businesses can enjoy the fruits of digital transformation.
7) Improved Customer Experience
Maintaining good customer service is a major challenge to overcome in e-commerce, mainly due to high customer expectations, fierce competition, and the complexity of the global supply chain. That is why an ever-increasing number of e-commerce businesses migrate to the cloud each day to get the most from highly personalized solutions for customer experience. Cloud enables users to seamlessly access e-commerce sites from different devices anywhere in the world 24/7, and they can make their purchases regardless of time and place. Suppliers and retailers can receive purchase orders from around the globe at any time and optimize production and their inventory, thanks to real-time data and high automation cloud unlocks. With real-time inventory data, customers can see what items are available and how many are left so that they can make their purchases based on available data, paving the way for a better customer experience. Also, with advanced data analytics, enterprises can make accurate predictions about consumer behavior, which helps improve algorithms that can give personalized suggestions to each customer based on their search history, past purchases, likes, and preferences, improving customer engagement.⭐⭐⭐
In today’s complex and ever-changing market conditions, e-commerce firms battle fierce competition, and the pressure to take smart and swift actions is more exigent than ever. Nevertheless, there are still endless opportunities to get ahead in the competition and drive CLV. For e-commerce businesses, growing sales requires genuinely engaging with customers, offering personalized and targeted services, creating omnichannel experiences, investing substantially in privacy and security, and having a reliable infrastructure to support all of these. Kartaca provides you with loyalty solutions, omnichannel marketing tools, payment and e-commerce infrastructure, unified data solutions, and consultancies to help you make the right choices in your IT ecosystem and maximize your ROI. As Kartaca, we’ve assembled an unprecedented level of hands-on talent under one roof to create perfect solutions for our customers. Our team of software, network, and data engineers precisely touches on our customer’s pain points and offers lifelong solutions. Our team is trained on Google Cloud products, concepts, and use cases. Their technical skills to solve real-world IT challenges are validated regularly through certifications. If you would like to know more about how Kartaca can add value to your e-commerce business and your daily operations, please check this page and contact us.Kartaca is a Premier Partner for Google Cloud in the Sell and Service Engagement Models with “Cloud Migration” and “Data Analytics” specializations.
TL;DR
What are some of the factors that contributed to the rapid growth of the e-commerce sector in recent years?
The rapid growth of the e-commerce sector can be attributed to several factors. Notably, the Covid-19 pandemic played a significant role as lockdowns and restrictions led people to embrace online shopping. This increased consumer trust in e-commerce and created a marketplace suited for online transactions. Additionally, technological advancements and the rise of social media facilitated competition, innovation, and broader customer reach.
How do cloud solutions contribute to cost reduction in the e-commerce sector?
Cloud solutions offer several ways to reduce costs for e-commerce businesses. Firstly, they eliminate the need for heavy investments in IT infrastructure and hardware. Additionally, cloud solutions reduce maintenance costs associated with on-premise operations by minimizing downtime and hardware-related failures. Cloud providers also offer flexible payment models like pay-as-you-go and subscription-based plans, allowing companies to monitor and adjust their cloud costs as needed.
Why is scalability crucial for the sustainability of e-commerce businesses?
Scalability is essential for e-commerce businesses to accommodate growth efficiently. Cloud solutions provide personalized tools that enable automation, tracking, and analysis of products and assets. This automation facilitates seamless expansion, even across global operations. Cloud's customizable infrastructure helps companies adjust their business plans based on market demands and consumer behavior, ensuring sustained growth and operational efficiency.
How do cloud solutions enhance reliability in the e-commerce sector?
Cloud solutions improve reliability by offering flexible infrastructure for real-time tracking, data analysis, and traffic management. Content Delivery Networks (CDNs) reduce latency and accelerate load times, enhancing the customer experience. Moreover, cloud solutions enable IT service companies to access systems remotely in emergencies, ensuring instant support and minimizing disruptions in service.
How does cloud technology contribute to enhancing customer experience in e-commerce?
Cloud technology improves customer experience by enabling seamless access to e-commerce sites from various devices and locations, 24/7. Real-time data and automation optimize production and inventory management, ensuring products are available when customers want to purchase. Advanced data analytics help predict consumer behavior, leading to personalized suggestions based on individual preferences. This personalized approach enhances customer engagement and satisfaction.
Author: Cem Cetinguc
Published on: Sep 4,2023
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