Connected Data is the Lifeblood of Today’s Retailers: IDC’s 2022 Research
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For a look ahead at the trends that will animate the retail industry this year, let’s take a look back at the 2022 National Retail Federation (NRF) “Big Show” in NYC.
Attendees at January’s event were treated to tangible examples of how retail challenges are being solved today, including new solutions to help them parse customer expectations and buying patterns, adapt stores into omni-channel experience hubs, and improve data visibility and actionability.
NRF 2022 also took the “omni-channel everything” theme of last year’s show to the logical next level: Enabling the best hybrid experiences. The message came through loud and clear of the importance of integration and interoperability in this new hybrid world – making everything work well together.
The need for modern digital infrastructure to enable this blending of physical and digital retail smoothly is paramount. To that end, technology vendors demonstrated how digital transformation initiatives, such as contactless and real time IoT and mobile applications, need to be built on cloud, edge, and secure connectivity to allow retailers to achieve the modern seamless hybrid retail that today’s consumer wants.
Other prominent themes and technologies highlighted at NRF included: extending engagement in the metaverse, sustainability, physical and digital security, and the agility and adaptability imperative.
The Metaverse and Hybrid (Omni-channel) Experiences
Today, the metaverse is an extension of our lives, enhanced by technology, which exists as a series of virtual worlds. In the future, the metaverse will be an interconnected, endless world where digital and physical lives fully converge. Imagine waiting for an appointment at a real booth on the NRF show floor while your avatar roams a fully fleshed-out digital NRF, meeting other virtual attendees, stopping for coffee at the digital Starbucks, and paying for a coffee that an in-the-flesh Starbucks employee brings to them. Digital and physical selves merge seamlessly in the metaverse, as the worlds draw closer together.
In the metaverse, brands have a digital presence, too. Nike filed seven trademarks late last year, including those for “Nike,” “Just Do It,” and its swoosh logo, and posted openings for virtual designer roles, indicating its intent to make and sell virtual branded sneakers and apparel. It subsequently purchased RTFKT Studios, a company that already makes and sells NFTs and digital sneakers. (In one collaboration with teenage artist FEWOCiOUS, the company sold 600 pair/NFTs of sneakers in just six minutes to the tune of more than $3.1 million.)
The metaverse also opens possibilities for gathering data about consumers and product demand. Imagine a sneaker drop in the virtual world. Certain styles of new kicks sell like gangbusters, giving the brand insight into what might sell IRL, intelligence that leads to trend-right production and less inventory headed for markdown or landfills. The metaverse can be a vehicle for more sustainable operations.
The metaverse further bridges the narrowing gap between digital worlds and physical worlds. Most consumers aren’t outfitting an avatar, but they are moving between online and offline and expect retailers to accommodate those hybrid omni-channel journeys seamlessly. Those demands have accelerated around last-mile delivery and experiences such as buying online and picking up in store (BOPIS) or at curbside, shopping in store and returning merchandise online, adding items to a BOPIS purchase when at the store, or communicating a substitution to the third-party grocery delivery service
Hybrid experiences open opportunities to please the consumer in new ways, but they also add expense and complexity. The need to meet this demand while enabling profitability was a major theme behind many of the technologies discussed at NRF. These included artificial intelligence (AI) for recommending the right product, return logistics software for defining and guiding product-specific reverse logistics workflows, order orchestration and fulfillment applications for omni-channel shopping, and last-mile delivery visibility for optimizing customer experience, to name a few. Also on display were task management applications help to improve and optimize in-store employee engagement, as well as touch-free applications to allow for faster payments and customer self-service checkout. RFID continues to improve inventory accuracy and inventory locating on the shelf, throughout the store, and the supply chain.
Sustainability
NRF 2022 saw a strong focus on sustainability. An NRF/IBV study released at the show highlighted the significant embrace of sustainable shopping by consumers. According to the survey, 62% of shoppers are “willing to change their purchasing habits to reduce environmental impacts.” About half indicated a willingness to pay a premium – on average a 70% premium – for sustainable products and brands.
Retailers are working to improve sustainability and reduce carbon footprint across operations by using sustainable sourcing through the supply chain, the store, and even returns. Tech vendors unveiled a variety of solutions enabled by cloud/edge, AI, computer vision, and IoT/RFID to allow retailers to effectively measure and record their environmental efforts, with the goal of reducing their impact.
Several cloud and digital infrastructure providers showcased sustainability clouds and other technology aimed at asset management with the goal of reducing energy consumption, water usage, waste. Examples included using IoT sensors to reduce water usage, optimizing re-use of store assets, and dashboards that allow retailers to accurately monitor and measure carbon output. However, such sustainability solutions can be most successful when running on the next-generation digital infrastructure that helps retailers better compete and differentiate in today’s omni-channel world.
Physical and Digital Security
According to a 2021 NRF survey, 57% of U.S. retailers reported the pandemic led to an increase in organized retail crime, while 50% reported an increase in shoplifting. When IDC’s Future Enterprise Resiliency & Spending Survey, Wave 10 (November 2021) asked retailers which digital infrastructure investments would provide the greatest strategic advantage in 2022, their #1 response was “cybersecurity and recovery investments.”
A wide range of technology vendors acknowledged retailer concerns with regards to security, fraud, and loss prevention:
- Networking, connectivity, and edge vendors highlighted multilayer security solutions that promise to protect data from a range of IoT applications that utilize customer and associate data. Many offer security consulting services to address varied threats including ransomware, retail crime, and loss prevention.
- Security and e-commerce security vendors showcased solutions to prevent fraud and abuse in e-commerce applications as well as omni-channel applications such as BOPIS and curbside pickup, using AI-based analysis for identifying “bad”/risky customers and mitigating risk.
- Cloud vendors highlighted how retail clouds provide consistent, reliable identity management and data security.
- POS/payments/store technology vendors emphasized their ability to handle payments securely from any platform with multifactor tokenization, improved identity techniques such as biometrics and voice authentication, as well as AI-enabled and computer vision solutions for loss prevention at checkout and at the door.
The Agility and Adaptability Imperative
On display at the show were multiple flavors of the digital infrastructure technology that retailers need to achieve agile, personalized, data-driven, integrated seamless operations across the many channels of today’s retail landscape. The emphasis was apt. More than half of retailers plan to boost investment in business agility and operational agility over the next 12 months, according to IDC’s Future Enterprise Resiliency & Spending Survey, Wave 10 (November 2021).
Technology vendors highlighted their connectivity investments to enable business and operational agility and their technology investments for better ease of integration, scalability, and the ability to more easily swap out or mix and match applications with integrated platforms, open systems, hybrid cloud, and retail industry clouds.
Vendors also showed off infrastructure to better harness data while enabling its visibility, maximizing its value, and providing the data-driven personalization essential for competitive advantage and differentiation. Highlights included fast, secure connectivity, 5G and Wifi-6, and edge- and cloud-enabled data and AI platforms to generate real-time insights – all designed to enable today’s omni-channel retail.
Advice for the technology buyer
Retailers should consider these key themes from NRF 2022 when making technology investment decisions for 2022 and beyond. To avoid lagging behind those retailers already moving toward thriving into the future, take action to:
- Enable the seamless, contactless omni-channel approach that today’s consumers want and expect.
- Replace legacy infrastructure that was not built to handle the modern retail environment that requires the agility and adaptability to seamlessly connect rapidly increasing volumes of data securely and more quickly than ever.
Whether sustainability, adaptability, the metaverse, or security are top concerns, addressing business needs holistically and strategically should be job #1.
Continue the conversation by downloading our Transforming retail and CPG markets whitepaper today.
The Future of Cloud Computing: Choose Your Own Services and Payment Options
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As the saying goes, “it’s hard to make predictions, especially about the future.” Some organizations find it challenging to predict what cloud resources they’ll need in months or years ahead. Every organization is on its own unique cloud journey. To help, we’re developing new ways for customers to consume and pay for Google Cloud services. We’re doing this by removing barriers to entry, aligning cost to consumption and providing contractual and product flexibility. Read on to learn how we’re rolling out several new go-to-market programs across these key areas to help our customers purchase and consume Google Cloud services more easily.
Removing barriers to entry with Google Cloud Flex Agreements
Many customers choose multi-year commitments because they provide better line-of-sight into IT spend and budgeting. However, these commitments can create difficulty for those who don’t have clear visibility into their future cloud consumption needs. That’s why today we’re launching Flex Agreements, which enable customers to migrate their workloads to the cloud with no up-front commitments. As part of this new licensing option, Google Cloud customers still get access to unique incentives, such as monthly spend discounts1, committed use discounts, cloud credits, and access to professional services, based on monthly spend and workloads migrated to Google Cloud.
Flex Agreements are just one example of how we are removing barriers to help customers start using Google Cloud. In 2022, we launched the Innovators Plus annual subscription, which gives developers a curated toolkit to accelerate their expertise, including access to live and on-demand training through Google Cloud Skills Boost, Google Cloud credits, and more.
We also recently expanded trials for Google Cloud products. For example, the new Spanner free trial instance is good for 90 days, allowing developers to create Google Standard SQL or PostgreSQL databases, explore Spanner capabilities, and prototype applications—with no commitment or contract needed.
Contractual and feature flexibility
Contractual flexibility has always been one of our core principles. Committed Use Discounts (CUDs), for example, provide discounted prices in exchange for a commitment to use a minimum level of resources for a specified term. Last year, we introduced Flexible CUD, spend-based commitments that offer predictable and simple flat-rate discounts that apply across multiple virtual machine families and regions.
In addition to contractual flexibility, our customers also need the flexibility to choose features and functionality based on their stages of cloud adoption and the complexity of their business requirements. Therefore, over the next few quarters, we will launch new product pricing editions—Standard, Enterprise, and Enterprise Plus—in parts of our cloud portfolio. This new commercial packaging model will help give customers more choice and flexibility to optimize their cloud spend.
For customers running workloads such as those in regulated industries like banking and public sector, the higher-end Enterprise Plus tier will offer compute, storage, networking and analytics services with high availability, multi-region support, regional failover and disaster recovery, advanced security, and a broad range of regulatory compliance support. The Enterprise pricing tier will include a broad range of features designed for customers with workloads that demand a high level of scalability, flexibility, and reliability. The Standard pricing tier will offer cost-efficient and easy-to-use managed services that include all essential capabilities such as autoscaling to meet the core workload requirements of customers.
Align costs to consumption with autoscaling
At Google Cloud, a core requirement for the products we build is providing customers industry-leading capabilities to automatically scale (autoscale) services up and down to match capacity with real-time demand. Autoscaling improves uptime, reduces infrastructure costs, and removes the operational burden of managing resources.
Many Google Cloud products include autoscaling capabilities to help customers manage unplanned variations in demand. For example, Dataflow vertical and horizontal autoscaling, in combination with granular adaptive resource configuration (aka “right-fitting”), has resulted in up to 50% saving in infrastructure costs for streaming by automatically choosing the right number of instances required to run the jobs and dynamically re-allocating more or fewer instances during the runtime of jobs. Bigtable also provides native autoscaling capabilities, and Spanner’s autoscale is an open source tool that works across regional and multi-regional Spanner deployments.
Similarly, we added multiple features such as Cluster Autoscaler, Horizontal Pod Autoscaling, Vertical Pod Autoscaling, and Node Auto-Provisioning to GKE for elasticity and cost efficiency.
For L.L.Bean, the ability to quickly scale capacity to meet changing usage patterns (e.g., during the holidays), as well as to rapidly perform load tests to test capacity, are “night and day” with Google Cloud compared to L.L.Bean’s legacy on-premises IT system.
“We won’t have to pay for peak capacity to have it available during peak shopping times. We just scale capacity up or down as needed.” — Randy Dyer, Enterprise Architect, L.L.Bean
We are now taking these capabilities to the next level by enabling autoscaling in BigQuery at a more granular level so you never pay more than what you use. This allows you to provision additional capacity in smaller increments, so you never overprovision and overpay for underutilized capacity. BigQuery customers can now try the new BigQuery autoscaler (currently in public preview) in their Google Cloud console.
A commitment to flexibility and choice
At Google Cloud, we remain deeply committed to the success of our customers and partners, and we are uniquely positioned to help organizations transform their business. By providing you with more flexibility and choice in how to purchase our products, we are empowering you to be more efficient and resilient.
Join Google Data Cloud & AI Summit to hear the latest announcements around innovations in Google Data Cloud for databases, data analytics, business intelligence, and AI. Gain expert insights, new solutions, and strategies that can help you transform customer experiences with modern apps, boost revenue, and reduce costs.
1. Not available for customers buying through Partner Advantage.
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When moving to the cloud, many organizations concentrate their focus on the change in technology and overlook an area just as complex and impactful: cultural change. Having your people ready to embrace the change — supporting them with the right processes, equipping them with the right skills — is as important as getting the technology right.
To realize the full value of cloud technologies, many organizations are rethinking their IT organizational structure. There are a variety of potential talent implications too — from adopting agile ways of working to hiring for more cloud-centric skills to looking at redeploying current IT skills and reskilling and upskilling current teams.
As one of the organizations that pioneered hyperscale infrastructure, which led to the creation of the cloud, Google has spent years nurturing its culture and workforce to best operate in the cloud. We leverage this experience every day to help organizations ready their workforce for the change, and in this whitepaper, we aim to pass that experience along to you.
Giving Customers More Choice: Google Cloud’s New Product and Pricing Options
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Over the past several years, Google Cloud has made significant investments in our infrastructure product portfolio. We launched new Tau T2D VMs, which deliver 42% better price-performance vs. other leading cloud providers. We upgraded Cloud Storage to offer more flexibility to support customers’ enterprise and analytics workloads, with dual-region buckets and upcoming Turbo Replication. And we’ve delivered numerous improvements to our global network, including expansion to 29 cloud regions.
However, from conversations with customers, we’ve also learned we can do more to align our capabilities and pricing with their varied workloads. So, today, we are announcing we will adjust our infrastructure product and pricing structure to give customers more choice in how they pay for what they use alongside new, flexible SKUs with new product options and capabilities. These changes are designed to help ensure better product fit for our customers’ use cases across a wider array of workloads. They are also designed to better align with how other leading cloud providers charge for similar products, so customers can more easily compare services between leading cloud providers.
Some of these changes will provide new, lower-cost options and features for Google Cloud products. Other changes will raise prices on certain products. Ultimately, our goal is to provide more flexible pricing models and options for how customers are using our cloud services. Here’s an overview of what customers can expect:
Which services are changing? What new services are being introduced?
We are changing prices for some storage, compute, and networking products. The changes provide customers with new ways to optimize their spending based on workload type and size, or data portability needs, as well as reducing costs on some services. Specific changes include:
- Cloud Storage pricing changes for data mobility, including replication of data written to a dual- or multi-region storage bucket, and inter-region data access
- Introduction of a new lower-cost archive snapshot option for Persistent Disk (PD), so that compliance/archiving use cases are charged less than compute-intensive DevOps workloads
- New outbound data processing pricing for Cloud Load Balancing, in line with other leading cloud providers
- New pricing for Network Topology, which will include Performance Dashboard within Network Intelligence Center at no additional charge
Will customers’ bills increase? Decrease?
The impact of the pricing changes depends on customers’ use cases and usage. While some customers may see an increase in their bills, we’re also introducing new options for some services to better align with usage, which could lower some customers’ bills. In fact, many customers will be able to adapt their portfolios and usage to decrease costs. We’re working directly with customers to help them understand which changes may impact them.
When will the new prices go into effect?
Today, we sent customers a six-month notice on the price changes, which go into effect on October 1, 2022. Customers under existing commit contracts with a floating or fixed discount will not face any changes until renewal. Our goal is to help our customers manage any impact of these changes and allow time for them to adjust or modify their implementations.
What should customers do next?
There are a number of things customers can do to prepare for the changes:
- Read through the Mandatory Service Announcement (MSA) sent on March 14.
- Consider what actions, if any, they may want to take based on current storage, networking, and compute needs. Many of these changes may have simple choices associated with them.
- Consider using the Storage Transfer Service to select the right Cloud Storage bucket locations. Storage Transfer Service will be available free-of-cost for transfers within Cloud Storage, starting April 2 until the end of the year.
For those customers under contract, Google Cloud account representatives are available to discuss these changes. Please visit our pricing page and the links below for more details on our updates to storage, networking, and PD pricing, including information on how to modify your implementations if needed. If you do not have an account manager and still have questions please review our public FAQ, which will be updated regularly, as well as the resource links below.
Note: This pricing analysis is valid as of February 2022.
Resources:
Google and Fervo Agreement to Shape-up Plans for 24/7 Carbon-free Energy by 2030
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When Google announced our plan to go beyond purchasing renewable power for 100% of our energy usage and operate on 24/7 carbon-free energy by 2030, we noted that achieving this goal will require new transaction structures, advancements in clean energy policy, and innovative new technologies. Today, we’re pleased to announce that one of these new technologies—a first-of-its-kind, next-generation geothermal project—will soon begin adding carbon-free energy to the electric grid that serves our data centers and infrastructure throughout Nevada, including our Cloud region in Las Vegas.
Google and clean-energy startup Fervo have just signed the world’s first corporate agreement to develop a next-generation geothermal power project, which will provide an “always-on” carbon-free resource that can reduce our hourly reliance on fossil fuels. In 2022, Fervo will begin adding “firm” geothermal energy to the state’s electric grid system, where Google’s commitments already include one of the world’s largest corporate solar-plus-storage power purchase agreements.
Importantly, this collaboration also sets the stage for next-generation geothermal to play a role as a firm and flexible carbon-free energy source that can increasingly replace carbon-emitting fossil fuels—especially when aided by policies that expand and improve electricity markets; incentivize deployment of innovative technologies; and increase investments in clean energy research, development, and demonstration (RD&D).
Next-generation geothermal technology
Traditional geothermal already provides carbon-free baseload energy to a number of power grids. But because of cost and location constraints, it accounts for a very small percentage of global clean energy production.
That’s one reason this new approach is so exciting; by using advanced drilling, fiber-optic sensing, and analytics techniques, next-generation geothermal can unlock an entirely new class of resource. And the US Department of Energy has found that with advancements in policy, technology, and procurement, geothermal energy could provide up to 120 GW of firm, flexible generation capacity in the US by 2050.
As part of our agreement, Google is partnering with Fervo to develop AI and machine learning that could boost the productivity of next-generation geothermal and make it more effective at responding to demand, while also filling in the gaps left by variable renewable energy sources. Although this project is still in the early stages, it shows promise.
Using fiber-optic cables inside wells, Fervo can gather real-time data on flow, temperature, and performance of the geothermal resource. This data allows Fervo to identify precisely where the best resources exist, making it possible to control flow at various depths. Coupled with the AI and machine learning development outlined above, these capabilities can increase productivity and unlock flexible geothermal power in a range of new places.
This won’t be the first time that Google is applying software solutions to clean energy applications: we’ve just announced an update to our carbon-intelligent computing program that helps us reduce emissions associated with running applications at Google data centers. And other forms of AI and machine learning are currently being used to increase the value of wind energy.
Already this year, Google has taken significant strides toward sourcing 24/7 carbon-free energy for all our data centers, office campuses, and Cloud regions. On Earth Day, our CEO Sundar Pichai announced that for the first time, five of our global data center sites operated near or at 90% carbon-free energy in 2020.
Not only does this Fervo project bring our data centers in Nevada closer to round-the-clock clean energy, but it also acts as a proof-of-concept to show how firm clean energy sources such as next-generation geothermal could eventually help replace carbon-emitting power sources around the world.
You Can Now ‘Listen’ to Over 50 Tech Blogs on Google Cloud Reader
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🎧 Prefer to listen? Check out this episode on the Google Cloud Reader podcast
If you’re anything like me, you love reading, but also appreciate that sometimes your eyes need to be doing other things; whether it’s finding your exit off the highway, or keeping your puppy from destroying the couch.
And sometimes the thought of sitting down to read something just feels like it’s going to take valuable multi-tasking time away from my day. I know, I know, multitasking can be frowned upon, but it’s the way I live a good chunk of my life, and it’s working out so far. And while I’m not alone in my multitasking, I’m also not alone in my desire for a non-visual way to get this content, or any content.
*Google Cloud Reader enters the chat*
Google Cloud Reader is a podcast that lets you listen to the Google Cloud Blog posts that aren’t as dependent on visuals. This means they’re articles that are, or are adapted to be, less focused on graphs, or code samples, and instead describe the meaning behind those visual aids.
It’s an easy, audible way to absorb content around all things new in Cloud, while still being able to make sure Ruthie doesn’t eat my work from home equipment.
So by now you’re probably thinking “OK, so you started a podcast during the pandemic, even though you definitely seemed like the type to start making sourdough”—and you’re right. My 53 plants agree with you. But rest assured, one can listen to an episode of this podcast *while* creating a macramé plant hanger, or waiting for bread to rise—multitasking, am I right?
We’re a little over 50 episodes/macrame plant hangers in, so you should check it out (Ruth and I would appreciate it).
Some of my personal favorites
- Beginners Guide to Painless Machine Learning – Learn how to get started with Google Cloud AI tools
- Introducing GKE Autopilot: A Revolution in Managed Kubernetes – Learn more about GKE Autopilot, a revolutionary mode of operations for managed Kubernetes that lets you focus on your software, while GKE Autopilot manages the infrastructure.
- Cook up your own ML recipes with AI Platform – Learn about Mars Wrigley’s new ML-inspired recipe experiment on Google Cloud and how you can get started with your own.
- Recovering Global Wildlife Populations using ML – Review Google’s Wildlife Insight’s ML project and help users create an image classification model for motion-sensor cameras (called camera traps) used to help protect wildlife in an non-invasive way by collecting and tagging species via pictures.
Let me know your favorite episodes, and what other articles you’d like to hear on Twitter @jbrojbrojbro!
No matter why you prefer an audio format, we’ve got you covered; Google Cloud Reader, where we read the tech blog for you, and to you.
Get all the Google Cloud Reader on your favorite podcast platform, including Google Podcasts, Apple Podcasts, and Spotify.
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