MPLS networks are no longer sufficient to support continued digital transformation in retail: here is how software-defined networking can.

Retailers that have invested, or are investing, in digital capabilities will be positioned to create customer experiences that help them stand out, using technology-based strategies. However, to support these future strategies, retailers must run on a connectivity foundation that is more secure, more scalable and more reliable than the traditional Multiprotocol Label Switching (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 allow business workflows to remain agile and perform optimally.

John Tait, Global Managing Director, TNS

According to John Tait, Global Managing Director, TNS Payments Market, SD-WAN offers retailers the connectivity capabilities they need for in-store and e-commerce DX initiatives. He lists the five strategies the technology can support.

  1. Offer customers free Wi-Fi
    Free Wi-Fi is becoming a must-have for retail sites. SD-WAN allows 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.

    Retailers can harness analytics from the Wi-Fi usage to obtain valuable insights about shoppers’ behavior patterns and preferences. For example, Wi-Fi usage analytics can tell retailers whether the customer is a first-time or frequent visitor. The data can show 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 behavior. This aggregate data allows retailers to revamp their store layouts to increase sales by highlighting popular items (or placing less popular items near better-selling ones) or placing promotional or add-on purchases near frequently traveled areas.

    (Editor’s note: Retailers are advised to provide full disclosure to potential users of the free Wi-Fi about the use of analytics.)
  2. Connect with customers digitally
    Even if some consumers are not physically coming to a store, they still want expert opinions, which has led some retailers to implementdigital concierge services. Consumers can ask questions and view options via video conferencing, giving them the same white-glove experience they would get in a physical store.

    This is a trend that may continue after the pandemic, especially for products that require highly specialized knowledge like diamonds or audio-visual equipment. SD-WAN can help manage high-bandwidth applications for these consultations by optimizing network traffic.

    SD-WAN can also ensure smooth augmented reality e-shopping features. For example, some beauty stores use AR mirrors that show the customer how a lipstick color looks on their virtual lips.

  3. Support omnichannel payments
    Consumers have not stopped buying, but many have turned to e-commerce, mobile apps or ‘buy online pay in-store’ options. This new desire for a variety of payment and buying options is not 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—key for the retail industry. Some SD-WAN solutions available today are designed to incorporate the PCI DSS requirements that are critical for the retail sector.
  4. Rethink store layouts
    SD-WAN also allows retailers to manage traffic to avoid a network from overloading due to increased use of closed-circuit cameras not just for security purposes but due to their use in analytics.

    The video stream can be analyzed to capture shopper movement patterns that can drive strategy and improve decision-making. Retailers can see what is happening at their physical locations, observing foot traffic patterns and gauging customer reactions to learn more about shoppers’ preferences and their intent to purchase.

    Such actionable insights can be used to improve in-store offerings, maximize the placement of sales associates and in-store displays and even develop individual promotions.
  5. Optimize supply chains and inventory systems

    The supply chain issues some retailers experienced earlier in the COVID-19 pandemic 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.

    Furthermore, many retail giants have started blending their stores and their inventory centers, blurring the lines between brick-and-mortar and e-commerce operations. With SD-WAN, even smaller retail businesses can take advantage of this model: set up a mobile order/e-commerce fulfillment center; or a ghost kitchen to expand service areas; or a seasonal kiosk location to test demand before committing to real estate.

    The connectivity of SD-WAN allows retailers to interconnect these new channels and locations in days rather than months through fast deployment of equipment and connectivity to gain a larger yet flexible footprint without committing to another fully outfitted customer-facing storefront. Finally, by prioritizing bandwidth-intensive retail workloads such as retail analytics and inventory systems, SD-WAN can improve bandwidth efficiency and optimize inventory operations and productivity.

To support continued DX, retailers need to simplify, secure and improve their network across all branches and locations; remain agile in the face of change; and improve in-store and ecommerce customer experiences. 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.