Retailers: Get to the Cloud to Grow Your BusinessA STEP-BY-STEP GUIDE TO HELP YOU LEVERAGE THE CLOUD TO DO MORE THAN JUST SAVE TIME AND MONEY

2

This may come as a surprise to many retailers, but the concept of the cloud is actually rooted in work done in the 1960’s.

Historians attribute the idea to two separate computer scientists. One was J.C.R. Licklider, a man who introduced the idea of an “intergalactic computer network.” Licklider’s vision was based upon a world where everyone was interconnected, accessing data at any site, anywhere.

The other prescient scientist, John McCarthy, proposed computation being delivered as “a public utility, like service bureaus.”1

Since its inception, retailers have looked to the cloud as a cost and time saver. And with good reason. A retail enterprise is definitely saving time when everyone in the organization has access to content or data, can update systems and departments collaboratively and can tie their systems into others. And a retail enterprise is certainly saving money when they can move solutions that require huge amounts of maintenance and resources to a location that requires neither.

Get Your Head IN the Cloud

J.C.R. Licklider

In the 1960’s, he introduced the idea of an “intergalactic computer network.”

John McCarthy

He proposed computation being delivered as “a public utility, like service bureaus.”

3

But consider this: If by moving to the cloud one becomes more nimble, more agile, more scalable, more adaptable and more connected…then it seems certain that one also opens up huge opportunities for growth.

While no one will ever complain about the cloud enabling them to save time and money, retail’s future becomes more exciting when considering the cloud as an enabler of top-line growth and business innovation. Indeed, there are serious benefits to be gained by living in the cloud, and doing so can now be achieved in a timely and minimally disruptive fashion.

In this eBook, we’ll share the benefits retailers typically reap by moving to the cloud, provide a series of steps to follow to help implement the cloud in your organization, and we’ll discuss three examples of retailers who’ve leveraged the cloud to fuel growth and drive revenue.

“By the end of next year, we are on pace to triple our sales and store count. The cloud definitely makes our business scalable, ripe for upgrades, and without the need to build a dedicated IT team.”

TOM ANDERSON The Paper Store

COO and Executive Vice President

4

5

1999 Salesforce.com launches, pioneering the concept of delivering enterprise applications through the web.

2002 Amazon Web Services arrives on the scene, providing a suite of cloud-based storage, computation and even human intelligence.

2009 Web 2.0 hits its stride; Google and others offer browser-based enterprise apps to consumers and businesses alike.

Today Entire retail enterprises are managed in the cloud.2

Cloud History 101

6

What retail organization isn’t eager to grow? Take a cue from these benefits and get excited about your growth potential by implementing the cloud.

Expand Your Organization’s Growth Chart

1

3

5

2

4

6

RAPID DEPLOYMENT

STRATEGY AND IDEATION

COMPETITIVE RESPONSIVENESS

NEW MARKETS

OMNI-CHANNEL EXPERIENCES

INTUITIVE SCALING

7

RAPID DEPLOYMENT

As more technology disruptors enter the marketplace, retailers must be prepared to implement them quickly into their omni-channel strategies, while managing risk. The cloud enables retailers to rapidly deploy new technologies and trends such as personalization and mobile retailing with reduced opportunity costs and less risk of failure should (when?) “fickle” consumers change their minds and move on to the next device, network or app.

Another trend that is not likely to go away anytime soon, and is heavily dependent on cloud solutions, is the Internet of Things. Gartner reports there will be 4.9 billion connected “things” in use by end of 2015, and will grow to 25 billion by 2020.3

The agility and rapid deployment of the cloud will enable retailers to quickly utilize early applications that take advantage of all this new connectivity without heavy up-front investment, and position themselves for future applications as popularity and connectivity expand.

4.9 BILLION connected

“things” in use by

2015

1

3

5

2

4

6

8

STRATEGY AND IDEATION

Retailers know that if their IT teams are not always three steps ahead of the competition and always thinking of the “next big thing,” their customers will begin to look elsewhere for more innovative and empowered ways to shop. It is critical for retail IT teams to be focused on developing new and unique shopping experiences for their customers, rather than worrying about supporting and sustaining existing solutions.

George Lawrie, VP and principal analyst at Forrester Research concurs: “Retailers are saying ‘I don’t want my scarce people doing commodity tasks in IT that someone else can do.’ They want them to focus on new applications like mobile apps, how best to deploy top sales associates and retain preferred customers.”

Investing in the cloud allows retailers to do just that. A recent survey of more than 1,000 U.S. and U.K companies found that 60% of respondents said cloud computing has reduced the need for their IT teams to maintain infrastructure, giving them more time to focus on strategy and innovation.5

1

3

5

2

4

6

As consumers embrace digital technology at a breakneck pace, “...retailers need easily scalable resources to innovate. Cloud provides resource bandwidth, as employees are freed from tasks moved to the cloud...” from “A New Era for Retail — Cloud Computing Changes Retail,” a report from Accenture.4

1

3

5

2

4

6

9

OMNI-CHANNEL EXPERIENCES

The rise to power of the omni-channel consumer has created countless challenges for retailers, and today’s omni-channel operations must be able to support and optimize all retail categories. According to a report from Accenture, 72.5% of companies admit to having missing or underdeveloped capabilities needed to support the end-to-end cross-channel shopping experiences that they are so eagerly trying to deliver.6

The struggle begins with the synchronization of channels required to create a winning omni-channel operation that is more than a patchwork of systems and processes that, in the long run, often do more harm than good. The cloud

can help break down the walls between channels to create a seamless, engaging shopping experience for customers and an open-channel business for retailers.

72.5%of companies

have missing or underdeveloped

capabilities needed to

support the end-to-end

cross-channel shopping

experiences.

Retailers get thirty percent more lifetime

value from multi-channel shoppers than single-channel

shoppers.

30%1

3

5

2

4

6

10

COMPETITIVE RESPONSIVENESS

As a result of its expanding role in the enablement of efficiency and growth for retailers, the cloud has definitely raised the bar on competition between those who live in the cloud and those who don’t. In a recent Harvard Business Review survey, 74% of respondents said that cloud computing has provided their organization with competitive advantage.7

In the retail world, to be known as “in the cloud” is quickly becoming a “leaders vs. laggards” proposition, with first and current adopters forcing the hand of others to catch up to their more agile competitors, or risk becoming irrelevant or obsolete.

OF RESPONDENTS SAID THAT CLOUD COMPUTING HAS PROVIDED THEIR ORGANIZATION WITH COMPETITIVE ADVANTAGE.

1

3

5

2

4

6

74%

11

INTUITIVE SCALING

Not having enough capacity to run with confidence during a holiday rush is the basis of countless IT nightmares. Without a doubt, one of the biggest benefits of getting to the cloud for retailers is the cloud’s ability to optimize and consolidate architecture in order to scale efficiently and cost-effectively, as well as add computing capacity on-demand. Retailers can leverage private and public clouds based on their specific needs, benefiting from both the security of a private cloud and the resiliency, elasticity and scalability of a public cloud.

When The Paper Store implemented the cloud in their organization, they found they were on pace to triple their sales and store count. Tom Anderson, the chain’s COO and executive vice president remarked,

“Cloud definitely makes our business scalable, ripe for upgrades, and without the need to build a dedicated IT team.”

1

3

5

2

4

6

12

NEW MARKETS

With information readily available and updatable across countries, the cloud provides an opportunity for retailers to easily expand to new markets while incorporating updates seamlessly. Already, companies have leveraged the cloud to enable growth. IDC predicted that by the end of 2015, 27.8% of the worldwide enterprise applications market will be SaaS-based, up from 16.6% of the market in 2013.8

True Religion was one of these companies who benefited from the cloud when it came to their emerging market in China. Before the cloud had been implemented in the organization, it was common for employees to receive middle-of-the-night phone calls when a server went down or other emergency occurred. With the cloud in place, True Religion was able to provide timely, seamless support.

1

3

5

2

4

6

27.8%END OF 2015

SaaS-based worldwide enterprise applications market

16.6%IN 2013

13

Now that you’ve wrapped your head around all the benefits of leveraging the cloud, you’re probably thinking ahead towards how you can implement the cloud in your organization. We’ve documented three simple steps that make the transition to a cloud-based omni-channel enterprise easier:

Align the cloud to your systems and goals

Decide on an implementation scheme

Choose a partner

The Cloud Waltz – Three Easy Steps to Cloud Implementation

1

3

2

13

14

Preparing for Cloud Success1Your success as a retailer depends on your ability to create a seamless, engaging shopping experience. Lasting advantage comes to those who understand who their customers are, what they want and why they buy, and respond with personalized, seamless experiences in every channel and touch point.

As a result, you’ll want to begin by identifying your strategic goals for the next six months, the next year and the next five years. Once you understand where you’ll need to invest your time and energy, you’ll know which systems need to be moved to the cloud and in what order.

While you’ll want to move systems to the cloud which are in most jeopardy first, consider also moving systems that allow you to anticipate and react to customer needs more readily or innovate as business trends change the game down the road. Cloud computing provides the perfect infrastructure to nimbly take advantage of future opportunities.

15

True Religion’s progression to the cloud began with simple commodity services first, including email, backups, quality assurance and project management tools. Once they moved over systems that made running their business simpler, they had more room for innovation and were able to move other, more inventive processes to the cloud.

15

16

The type of cloud that a retailer chooses is mostly dependent on their preferences and how much day-to-day control they need to retain. Options range from in-house, virtualized private clouds and on-premise solutions, to virtual private SaaS applications, to public cloud infrastructures. A cocktail of selection criteria should factor into the decision including:

2 The Choice - Public, Private and/or Hybrid Clouds

CAPEX vs. OPEX favorability

Custom application hosting vs.

out-of-the-box applications

Regulatory and

compliance requirements

Future portability provisions

and mobility needs

Scalability, availability and confidentiality

concerns

17

When it comes to cloud solutions, however, retailers should know there is no “be all, end all” option. “The first step in simplifying the cloud is to stop thinking about cloud technologies as an all-or-nothing proposition,” says Patrick Dewechter, senior consultant, cloud innovation practice, Capgemini Consulting. “Even the term ‘cloud’ misleadingly implies ‘a transformation of the way information technology is delivered en masse,’ which is not realistic or advisable at any enterprise.”

The hybrid cloud model, a blend of cloud and traditional on-premise solutions, enables retailers to

easily connect through the Internet to funnel mission-critical data through mission-critical systems, supporting end-to-end omni-channel functionality.9 This option is becoming such a popular one for retailers that the hybrid cloud market is estimated to grow from $25 billion in 2014 to $85 billion in 2019.10

Growth in the hybrid cloud market

$25 Billion

$85 Billion

IN 2014

IN 2019

17

18

When choosing a cloud partner, retailers want to develop a relationship with an experienced vendor, ideally one that is passionate about ensuring everything they do is focused on adding value through the cloud.

Whether a retailer chooses a cloud-only or blended cloud configuration, they need industry expertise to ensure computing support, offer accessibility and keep applications current.

Specifically, retailers should partner with cloud service providers that have reputations for offering reliable, comprehensive and secure cloud services.

3 Choosing a Cloud Partner

19

According to ACG Research, “Most importantly, service providers can show value by strongly emphasizing and demonstrating how cloud computing allows enterprises to focus on other aspects of their businesses without having to concentrate resources on IT, server updates and maintenance issues.” 11

An ideal partner should also be able to offer end-to-end solutions in the cloud that can be adopted according to each client’s business priorities and growth.

In addition, an ideal partner will have a demonstrated ability to integrate with other cloud solutions to ensure maximum flexibility when determining your cloud implementation roadmap.

20

Now that you know the benefits to moving solutions to the cloud and have the tools in hand to make it happen, it’s time to get inspired!

There are plenty of companies that have implemented the cloud successfully in their organizations and they have reaped some pretty major rewards from their efforts. So check out these cloud masters…

Cloud Inspiration Board

Shipping Request

21

The Story

In 2007, The Paper Store was managing their business with outdated, legacy systems and a limited IT team. As if that wasn’t enough, they lost a server in one of their stores in December and couldn’t get any replacement parts. For three weeks, they had to process all of their transactions by hand. Needless to say, they needed to move systems to the cloud and they needed a partner to support them: they did not have the bandwidth to handle it in-house.

Shipping Request

22

By moving to the cloud, The Paper Store was able to:

} Break down the walls between channels to create seamless customer experiences

} Implement flexible platforms that can react to their shoppers’ every whim

} Innovate as business trends change down the road

} Focus on the business, leaving the IT to someone else

} Remove the burden of managing PCI audits

} Support store performance and strategy through in-depth reporting: providing visibility into stores’ actual sales (daily, week-to-date, month-to-date) vs. planned sales, building goal awareness and ranking stores based on performance

} Process more transactions leveraging mobile POS

} Focus on profitable customers and markets through CRM’s in-depth customer information

} Achieve stronger bottom line through Sales Audit by eliminating paid-out/post-void abuse, decreasing employee theft, reducing fraudulent returns and decreasing coupon/deal processing errors

The Benefits

23

The Results

GROWTH

SALES GROWTH SINCE IMPLEMENTING THE CLOUD

SAVINGS IN INVOICE MATCHING

IMPROVED PROFITABILITY

21 52 100

} First 45 years: 21 stores} First 5 years running in

the cloud: 52 stores} End of 2015: 100 stores

} $275K savings in Year 1} $100K savings each preceding year

} Same store sales increased 27% (from 2012-20143)

} Increased gross margin more than 3 points

2014

2013

2011 $62.3M

$113M

$130M

$275K$100K $100K $100K

27%

23

24

The Story

When True Religion evaluated their three-year strategic roadmap, they foresaw a number of projects that required additional complex infrastructure and corporate service upgrades. By leveraging the cloud, they knew they could make strides on both, decreasing costs and growing their company.

25

By moving to the cloud, True Religion was able to:

} Create more time for innovation and ideation, focusing on more strategic projects

} Implement new infrastructure faster, building it right the first time

} Leverage elastic and hybrid infrastructure, adding new capabilities right away and not pushing off major upgrades

} Save time headhunting by offering IT jobs that allow experts to solve complex problems and drive new projects as opposed to spending their time upgrading servers

} Increase customer service availability and knowledge

The Benefits

26

A specialty men’s shaving retail store offering elegant hand-crafted razors and shaving accessories for men, The Art of Shaving chose a cloud solution because they wanted the industry expertise of a proven cloud solutions partner to ensure computing support, accessibility and to keep their applications current. “For us, our technology partners are pivotal to our success, and creating a partnership is what has helped us grow,” says Rafael Niebles, vice president of IT.

The Art of Shaving is a firm believer in the end-to-end support of the cloud. They currently manage most of their retail suite, including, POS, ERP, sales audit, CRM and accounting systems, virtually.

The company is also planning its next phase of deployment: bringing its omni-channel operations, including its e-commerce channel, into the cloud.

Since making the decision to move its operations to the cloud, The Art of Shaving has grown its enterprise from 40 stores to 158 locations without needing to increase its IT staff headcount.

Partnering with the Cloud to Grow

40158

27

“We are a lean IT data center, and do not have the resources more traditional, big box retailers may have,” said Niebles. “Being in the cloud allows us to utilize, test and secure applications. Now we have the knowledge and expertise from our partners that we need to scale and grow – all while keeping our IT resources to a minimum.”

RAFAEL NIEBLES The Art of Shaving Vice President of IT

The Results

27

28

Right now, retailers can expect more of the cloud because it has been proven to do more than just deploy and manage resources efficiently.

The familiar benefits of shifting CAPEX to OPEX, reducing infrastructure and being able to focus on core business issues still apply. But the greatest challenge for most retailers is adapting to change – both to evolving expectations of shoppers and shifting conditions in the market.

The cloud meets that challenge in ways on-premise solutions can’t by enabling faster deployments, more universal access, and easier, more fluid expansion in response to emerging opportunities. In all these ways and more, the cloud has become a driver and, increasingly, an imperative of growth.

Get Your Cloud On, and Be Ready for the Future

29

Aptos: A Trusted Partner with Over a Decade of Experience in the CloudAt Aptos, everything we do, we do with an eye to adding retail value through the cloud. In the past ten years, Aptos has fueled the growth of dozens of retailers through our end-to-end cloud solutions, including the four high-growth retailers highlighted in this eBook: The Paper Store, True Religion, and The Art of Shaving.

Our cloud offerings are flexible and can be tailored to meet your unique business needs. Use the Aptos Cloud in either of these ways:

SaaSFULLY MANAGED, END-TO-END “BIG RETAIL” IT FOR ANY RETAILER

} All-inclusive subscription service

} Pre-configured solutions based on proven best practices

} Delivery, management, and support of all infrastructure and applications

HostedPROFESSIONAL OPERATION AND SUPPORT OF YOUR LICENSED SOLUTIONS

} Hosting your licensed software

} Customized to address your unique business needs

} Delivery, management and support of infrastructure and applications

One partner and point of contactAPTOS DESIGNS, DELIVERS, RUNS AND SUPPORTS

Fast implementation and ROIGET UP AND RUNNING, END-TO-END, WITHIN SIX MONTHS

100% reliabilitySTATE-OF-THE-ART DATA SECURITY AND SYSTEM RELIABILITY

Aptos cloud solutions combine capabilities and benefits that are specifically designed to foster environments that are ideally staged for enterprise growth.

30

Predictable, managed costsNO HIDDEN OR VARIABLE FEES

Low riskAPTOS ASSUMES RESPONSIBILITY FOR YOUR SYSTEMS

Agility and scalabilityEASILY GROW AND ADJUST YOUR CHAIN

31

32

In an era of virtually limitless choice, sustained competitive advantage only comes to retailers who engage customers differently—truly understanding who they are, what they want and why they buy. At Aptos, we too, believe that engaging customers differently is critical to our success.

We are committed to a deep understanding of each of our clients, to fulfilling their needs with the retail industry’s most comprehensive omni-channel solutions, and to fostering long-term relationships built on tangible value and trust.

More than 500 retail brands rely upon our Singular Commerce platform in the Cloud to deliver every shopper a personalized, empowered and seamless experience… no matter when, where or how they shop.

Learn more: www.aptos.com and info@aptos.com.

About Aptos

33

One Customer

CRM • Clienteling

One Product

Planning • Merchandising

One Interaction

POS • Mobile POS • Digital Commmerce

One Truth

Audit and Operations Management

Enterprise Order Management

One Order

One View of the Enterprise

Analytics

One Secure Platform, in the Cloud

Singular Commerce, Seamless Experiences.

Sources:

1 Mohamed, Arif, “A history of cloud computing,” ComputerWeekly.com, March, 2009.

2 Mohamed, Arif, “A history of cloud computing,” ComputerWeekly.com, March, 2009.

3 Gartner, “Gartner Says 4.9 Billion Connected Things Will Be in Use in 2015,” November 2014

4 Accenture, “A New Era for Retail: Cloud Computing Changes the Game,” 2013

5 CIO, “How Cloud Computing Helps Cut Costs, Boost Profits,” March 2013

6 Accenture, “A New Era for Retail: Cloud Computing Changes the Game,” 2013

7 Harvard Business Review, “Business Agility in the Cloud,” 2014

8 Columbus, Louis, “Roundup of Cloud Computing Forecasts And Market Estimates, 2015,” Forbes, Jan. 24, 2015.

9 RIS News Roadmap, “Leveraging the Cloud to Redefine the Omni-channel Experience,” August 2015

10 MarketsandMarkets, “Hybrid Cloud Market – Global Forecast to 2019,” March 2015

11 ACG Research, “Cloud Computing: A Value Proposition,” 2011

© 2015 Aptos, Inc. All rights reserved.