Retail & eCommerce Transformation Leads to Data Center Boom

By: Kayla Matthews on June 8, 2020

Many changes in retail within the last several years happened thanks to the internet. People can go online to complete all or part of the shopping process. They can get their goods within hours rather than days, and online improvements spurred that development, too. 

Walmart Ramps up In-Store Tech, Plus Sees an Online Order Uptick 

Walmart is one of the major e-commerce brands contributing to the data center boom. When the company released its first-quarter fiscal year 2021 earnings, the statistics showed a 74% increase in e-commerce orders. Some such instances occurred when customers shopped  for items — such as groceries — online, then drove to stores to pick them up.

The retailer also launched Express Delivery in response to the COVID-19 crisis. That service lets people order products through the internet and get them delivered in under two hours. 

As Walmart continues to expand and refine its online services, such strategies require reliable data centers. They keep websites functioning properly and allow the retailer to use analytics tools to identify the most in-demand products or gauge which localities need additional delivery slots. 

Walmart also has a physical store doubling as an innovation testing ground. It calls the facility its Intelligent Retail Hub (IRL). The aim is to determine practical ways to apply artificial intelligence (AI) to in-person shopping. The associated hardware is powerful enough to download the equivalent of three years worth of music every second. One application in development uses cameras and AI to compare stock levels versus anticipated demand. 

Successful retailers know the importance of giving above-average service, whether a person shops online or in stores. Data centers can meet that goal while equipping brands to discover new, compelling ways to keep pace with customer demands. 

Target Acquires More Tech to Increase Competitiveness

There is an urgency and conscientiousness required for order fulfillment. Doing it well requires steps like processing payments, sending order confirmations and locating products in a warehouse. Data centers can help with all those things, especially when retailers use online platforms to fulfill orders faster. 

One of the recent changes in retail is that people increasingly prioritize speed. Amazon is leading the way in efficiency, but Target hopes to catch up. It struck a deal to acquire technology assets from Deliv, a same-day delivery service that once operated in nearly three dozen markets. 

Target is already somewhat familiar with Deliv's offerings. It worked with the company for small trials during 2019 and 2020. Something that sets Deliv apart is how it batched orders together based on their destinations. Target believes the tech could help it become even more prominent in the retail marketplace. Although the brand did not into detail about how Deliv's platform works, there are certainly data centers keeping things running behind the scenes. 

Carvana Encourages People to Buy Used Cars Online

Changes in retail have also happened because shoppers are now buying products online that they once solely obtained through in-person visits. Carvana is one of the companies benefitting from that shift, and it relies on data to succeed. The company sells used cars and offers thousands in its collection, whereas most dealers usually have 100 or less on their lots.

Ernie Garcia, Carvana's CEO, explained the crucial data plays in their operations. He said the company looks at daily feeds containing hundreds of thousands of vehicles to determine which ones to buy from auctions or other sites. Data also comes into play when calculating a customer's financing options, analyzing their credit score or learning which automobiles attract the most attention from people browsing online.

The brand is certainly contributing to the data center boom, and it's paying off. A document for investors on the Carvana website showed a 128% jump in year-over-year growth from 2017-2018, plus a 113% year-over-year increase in the number of cars sold in that period. 

Traditional car sales outlets won't go away, but Carvana is part of a larger trend of many people preferring to buy things online. They can then avoid traffic, checkout lines, interactions with salespeople and other potential downsides of buying stuff in person. 

The Bigger Picture

The brands mentioned here give glimpses into changes happening throughout the retail sector as a whole. Online shopping is tremendously popular, and stores are simultaneously deploying high-tech additions to bring retail into the future. They use AI, smart shelves, computer vision cameras and other advancements on the sales floor and in the stockroom to get products to consumers as soon as possible — whether those people buy in stores or request deliveries. 

Data centers are essential for helping this retail transformation succeed. Those facilities store information, process it and keep websites and online portals functional to help customers and employees. 

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