A retailer’s guide to 2020 holiday season readiness: Five keys to success

A retailer’s guide to 2020 holiday season readiness: Five keys to success 2

Table of contents

Introduction

Keys to success for 2020 holiday readiness

Increase agility and reduce costs with a high-performing ecommerce platformEtsy: Doing more with less cost and infrastructure

Improve inventory visibility and fulfillment in a contactless worldConrad: Powering next-gen retail with BigQuery and Apigee API management

Differentiate with experiences that deliver customer value and drive top-line growth Ulta Beauty: Offering personalization at scale

Provide better customer service at scaleMagazine Luiza (Magalu): Digitally transforming an ecommerce platform

Leverage proven protocols for peak-season readiness Tokopedia: Running large-scale shopping events

How Google Cloud can help

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Introduction

The holiday season presents retailers with familiar challenges every year—increased demand, supply chain pressures, and spikes in website traffic. But this holiday season is set to be unlike any other in the past.

COVID-19 has raised the stakes significantly. Government-imposed lockdowns and shelter-in-place orders introduced new challenges to retailers around the globe. Stores were forced to shutter, new fulfilment options were required almost overnight, and the stress on many retailers’ digital infrastructure has been unprecedented.

The next few months are paved with uncertainty, from fluctuating physical distancing restrictions to evolving consumer behaviors to questions on the strength of this year’s holiday spend, given the economic repercussions of the pandemic. But regardless of how this year’s holiday season unfolds, there are steps retailers can take today to be ready to navigate what happens tomorrow.

One pandemic, many effects

The pandemic has had a polarizing effect on retailers. Grocers and mass merchandisers saw huge leaps in demand—in the US, the order volume for grocery retailers grew by 210% during March compared to the previous year—while retailers in categories like fashion and beauty experienced widespread declines.1

Forecast scenarios for the remainder of 2020 vary widely.2 In the best case scenario, economic activity could start to rebound in late 2020 if the pandemic eases in Q3 and there is no resurgence in the fall. If, however, efforts to contain COVID-19 falter or fail, we could face a lengthy economic contraction that could take many years to recover from, and could have damaging consequences for unprepared retailers.

increase in order volumes year-over-year for grocery retailers in the U.S. in March 2020.1

A lengthy economic contraction could have damaging consequences for unprepared retailers.

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While it’s clear that recovery will take time and vary by sub-segment, all retailers can learn from the macro changes in consumer preferences and behaviors that the pandemic brought about.

Consumer behavior and buying habits are shifting

Looking ahead to the 2020 holiday season, Google-led research and market trends predict three new behaviors which will dramatically impact the retail industry and holiday season strategies.

The shift to ecommerce accelerated at its fastest rate ever in 2020. Total online spending reached $82.5 billion in May, up 77% year-over-year.3 This was accompanied by the abandonment of long established buying habits by “home-bound” customers. As well as the steep rise in online grocery shopping, 1 in 4 of surveyed shoppers went online to purchase something they would normally buy in-store during lockdown.4

In many retail segments, the total addressable online market is growing substantially. With new limits on in-store and physical interactions, and the possibility of additional rounds of store closures in communities with a virus resurgence, a robust and flexible ecommerce channel will become more important than ever. The time is now for retailers to double down on their omnichannel strategy before the peak holiday season arrives.

Shoppers are looking for new products and the fastest, simplest way to get what they need. During the early stages of the pandemic, 53% of US shoppers tried a new shopping service for the first time ever, like checking inventory online first, getting grocery delivery, or trying curbside pickup.5

What they’re buying is also changing. While we all know people are investing in essentials, we’re seeing a drastic increase in searches for things to complement spending more time in the home, whether for working from home, for entertainment, or to enhance living spaces.

Retailers need a robust supply chain and the ability to act swiftly on emerging consumer trends to deliver new service offerings that support their customers’ changing preferences.

of total online spending reached in May, up 77% year-over-year.3

1 in 4 of shoppers went online to purchase something they would normally buy in-store during lockdown.4

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Impacted by a disruption to their lives and livelihoods, overall consumer sentiment is down in many markets across the world. According to a McKinsey report, more than 90% of consumers across countries surveyed expect COVID-19 to impact their personal routines for more than two months.6 In Japan, Korea, and many hard-hit European countries, more than 70% of consumers believe that the impact will last four months or longer, and over half of consumers globally expect their finances to be impacted negatively for at least four months.

Overall retail forecasts for 2020 have decreased by more than 10 percentage points in the wake of the widespread economic downturns caused by the pandemic.7 Many consumers will be feeling the pinch and the purchases they do make will be driven by the need to find deals and offers. With overall sentiment low, value will take on a new precedent.

Faced with changes to purchasing habits, loyalty, and consumer sentiment, retailers need to adapt and respond with more flexibility and agility than ever before. And, with the impact of COVID-19 compressing the planning cycles for many retailers, moving at speed is paramount.

Retailers need to adapt and respond with more flexibility and agility than ever before.

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Keys to success for 2020 holiday readiness

To help retailers prepare for the upcoming holiday season, we looked at research and consumer trends from Google and our in-house retail experts to identify five key digital acceleration strategies to drive holiday season success in 2020.

Increase agility and reduce costs with a high-performing ecommerce platform

Improve inventory visibility and fulfillment in a contactless world

Differentiate with experiences that deliver customer value and drive top-line growth

Provide better customer service at scale

Leverage proven protocols for peak-season readiness

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01 Increase agility and reduce costs with a high-performing ecommerce platform

For the foreseeable future, unpredictability will reign. The fluctuating state of the COVID-19 pandemic will continue to affect buying patterns, preferences, and consumer purchasing power. But for retailers, one thing is certain: preparing your ecommerce platform now will help you to reduce costs, increase agility, and be ready for whatever this holiday season brings.

Scale up or down

Research has shown that 91% of shoppers leave an ecommerce site if the pages are too slow to load.8 The importance of site performance only increases under the pressure of busy shopping seasons. In recent years, retailers have been plagued by legacy systems and their inability to effectively scale. And according to a Google commissioned survey, 43% of US shoppers experienced at least one issue when ordering online during COVID-19.9

By moving legacy systems to the cloud, retailers gain the ability to quickly build digital experiences that can flex to accommodate high traffic, remove overall friction from the shopping experience, and yield higher sales.

Reduce expenditures

With the elasticity of the cloud, retailers can scale up easily when demand peaks without having to invest in fixed cost hardware—as it does around Black Friday and Cyber Monday. This also means you can dial down after the holiday peak or save costs on apps or workloads that are not in use, for example, with in-store services when stores are closed.

Customer-friendly pricing features like no upfront costs or termination fees, per-second billing, and sustained use discounts can also significantly reduce costs.

Cloud gives retailers the elasticity to scale up – and down – with ease.

Cloud gives retailers the elasticity to scale up – and down – with ease.

of shoppers leave an ecommerce site if pages are too slow to load.8

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Other best practices for optimizing cloud costs include taking advantage of billing and cost management tools, managing and preventing duplicate data, fine-tuning your data warehouse, and only paying for the compute power you need.

Operate with agility

The success of your ecommerce business will depend on how well architected and resilient your platform is. Choose one that is designed to build and run large-scale systems reliably and efficiently. With a modern ecommerce platform, your developers can focus on new services and features without worrying that pushing changes will impact the performance of the platform, resulting in faster time-to-market for new innovations and experiences.

As you think about where to invest ahead of holiday 2020, prioritize the aspects of your website that are hurting the customer experience and improve those first before optimizing for performance and customer experience. By focusing on specific changes that have the highest impact, there is still time to prepare your ecommerce platform for the scalability, high-performance, and agility you need for the holiday season.

Quick tips: Test your mobile site speed

A slow mobile site limits your business. Check the speed of all the pages on your site. Fast sites start to load in under 1 second. Average sites start to load in 1-2.5 seconds. Slow sites start to load in over 2.5 seconds. Prioritize above-the-fold images and lazy load below-the-fold images. Compress images to improve load times.

Prioritize aspects of your website that hurt the customer experience, then optimize for performance.

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Etsy: Doing more with less cost and infrastructure

For special handmade goods or unique arts and crafts, Etsy has become the online destination of choice. Serving a global community of over 2.8 million sellers, Etsy has a very local mission: keep human connection at the heart of commerce.

From an ecommerce platform perspective, the best way to deliver on this mission is by staying ahead of the technology curve. Not only does Etsy need to ensure its platform functions smoothly during peak periods

Our customers don’t care if we’re the best in the world at supporting hardware. They care about us having the best marketplace, with the functionality and features they want.”

Mike Fisher, Chief Technology Officer at Etsy

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of sales, it also needs to be both cost-efficient and environmentally sustainable. The company also wanted to ensure that it had the best and most sustainable collaboration tools for communication both within the company and with sellers using Etsy’s platform.

After an extensive evaluation of potential cloud providers, Google Cloud emerged as the clear choice for its ability to scale on demand, commitment to carbon neutrality, energy efficiency in artificial intelligence and machine learning, and its open culture of sharing and dedication to the customer.

Etsy migrated its data center and ecommerce platform in record time, moving 5.5 petabytes of data to Google Cloud. As a result, 15% percent of Etsy’s engineering headcount were able to turn their attention from managing system infrastructure to focusing on customer experience. This has, in turn, led to significant improvements in the time to ship new features, like search and recommendations, and a big reduction in Etsy’s carbon footprint that has resulted in over 50% savings in compute energy. Through careful application of Committed Use Discounts and the use of cost data and reporting as an optimization tool, Etsy was also able to reduce compute costs by 42% and improve cost predictability.

Etsy’s decision to migrate its data center and ecommerce platform to Google Cloud helped spur its growth and enabled the company to fulfill the needs of sellers and buyers in innovative ways, all while improving company-wide sustainability.

5.5 petabytes of data were moved to Google Cloud in record time.

Etsy was able to reduce compute costs by 42% and improve cost predictability.

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02 Improve inventory visibility and fulfillment in a contactless world

Omnichannel customer journeys have long been an area of focus in retail, but the impact of the pandemic has put a new spin on an old story. Consumers are becoming increasingly channel-less, using more devices and expecting alternative, contactless ways to buy and receive purchases.

Some of these new behaviors are already changing into habits. Globally, we saw 70% growth in search volume for curbside pickup in the last week of March. And over half of the respondents in a Google-commissioned survey in May said curbside pickup will be beneficial as stores reopen.10

Retailers should focus on modernizing the moments in their omnichannel journey that will make the biggest, quickest impacts on inventory management, customer satisfaction, and operations.

Manage inventory with insight

With the experience of stock-outs of high demand products, searches for “in stock” items grew globally by over 70% in the week of March 28 to April 4.11 In a rapidly changing environment, your customers are looking for real-time updates on how your business is doing—especially when it comes to store openings and product availability.

Modern inventory management and analytics can provide real-time insight into the movement of merchandise across channels, to improve inventory accuracy, help avoid stockouts and excess inventory, and enable a more personalized customer experience.

To help understand what consumers around the world are searching for, savvy retailers are using Google Trends and our Rising Retail Categories tool to spot fast-rising retail categories, the locations where they’re growing, and the queries associated with them. These free tools can be deployed to increase understanding of the retail climate, enabling you to act quickly when it comes to managing inventory to meet demand.

Searches for “in stock” items grew globally by over 70% in March and April.9

Use free Google tools to increase your understanding of the retail climate and act quickly to manage inventory to meet demand.

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Develop new online to offline capabilities, quickly

The simple distinction between online and offline was blurred as COVID-19 forced retailers to introduce new fulfillment options to deliver goods in safe, yet scalable ways. Buy online, pick up in-store grew by 195% in May and this is one of many models gaining traction.12 Contact-free commerce will continue to gather pace into the 2020 holiday season as consumers get comfortable with the ‘new normal’.

Click-and-reserve, in-store appointments, and curbside pickup are part of a host of new expectations that retailers must adapt to in order to meet the needs of customers and assure them of the safety and security of their operations. These services can also help you better manage store traffic in this unique holiday season.

Hybrid and multi-cloud application platforms like Anthos can help you modernize your existing applications, build new ones, and run them anywhere—from in-store to on the edge to online—in a secure manner. And modern collaboration tools like G Suite and mobile devices can help ensure your store associates are connected and empowered to serve your customers in a fast, efficient manner.

Quick tips: Improve shopper onboarding and purchasing

Reduce friction in the shopper sign-up experience and increase conversion rates by implementing Google One-tap to allow users to sign up with just one tap and automatically sign in on Chrome and Firefox browsers.

If your “Add to Cart” is below the fold, bring it up. And instead of taking customers directly to the cart after adding a product, create a new user flow that encourages looking at more items before checking out.

increased demand for buy online, pick up in-store in May.12

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Conrad Electronic: Powering next-gen retail with BigQuery and Apigee API management

When Max Conrad founded an electrical goods store in 1923 Berlin, televisions didn’t exist and telephones were answered with a candlestick receiver. In 1997, the family firm was one of the first brands in Europe to launch an online store, one of first companies to launch in the German B2B marketplace (in 2017), and today its IoT

We want to move to a more proactive, predictive way of working. For example, if a parcel is going to be delayed, we should inform the customer only if it’s important to the customer that it comes on time, so that we don’t annoy people with unnecessary information. Or if there’s an upcoming event that might change supply and demand, we need to be ready for it and make sure our customers are ready too.”

Aleš Drábek, Chief Digital and Disruption Officer at Conrad Electronic

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platform, Conrad Connect, has one of the EU’s largest user bases. Improving speed and transparency is seen as a natural progression for the company, which uses cloud-based G Suite productivity tools to connect 3,500 employees: from warehouse staff, to sales personnel, to floor staff at its more than 20 stores in Europe.

Now, Conrad Electronic is looking to combine a century of retail experience with new sources of data, to optimize the company’s processes and offer more for its customers. “Firstly, we want to unlock the potential of the data stored in our legacy systems,“ explains Aleš Drábek, Chief Digital and Disruption Officer at Conrad Electronic. “That includes supplier data, product data, logistic data, and pricing data, but it’s only part of the story. Until three years ago, our customer-relevant data was kept in 25 different systems. We wanted to bring all of that together.”

Using APIs, Conrad Electronic imports from external sources, such as tracking information from shipping companies. It manages the connections with the Google Cloud API management solution, Apigee, which also helps connect the procurement systems of B2B customers directly to the Conrad Electronic product catalog, for a faster, more integrated retail experience. Meanwhile, a small team of developers used Apigee to build an easy-to-use tool that provides in-store teams and visitors to stores with key product, service, and warranty information, right from their in-store devices and tablets.

Internal data from 25 different systems was brought together to optimize processes and offer more to customers.

Apigee connects customer procurement systems with the Conrad Electronic product catalog for a faster, more integrated retail experience.

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03 Differentiate with experiences that deliver customer value and drive top-line growth The uncertainty in the global economy will create a holiday season defined by the customer’s search for value across all retail segments. Retailers should expect to operate in a highly promotional environment, with buyers seeking out value pricing or limiting their budgets.

What can retailers do to differentiate their offers? When asked about overcoming business challenges, retail executives cite one opportunity above the rest: creating more personalized customer experiences through online channels.13 Regardless of where your business is in its journey to the cloud, there are technologies available to help you rapidly differentiate and deliver enhanced customer experiences.

Unified data strategy

Delivering better customer experiences begins with a better understanding of your customer. And that relies on data, both access to it and the ability to use it. Timely insights not only enhance customer experiences, they can deliver a strong competitive edge. Google Cloud research shows that 56% of retail executives rate the availability of data in their organization as ‘good’ or ‘very good’, but 75% rate their ability to use data to improve decision-making as ‘poor’ or ‘very poor’.14

This is because data often lives in silos like POS and CRM systems, ecommerce sites, Google Marketing Platform and Google Ads accounts, and in other systems and databases. Plus, as COVID-19 has shown us, you also need to add additional data sets from outside your company, such as mobility data, consumer trends, weather patterns, and economic indicators, to be truly relevant and responsive to customer needs.

Retail executives cite personalized online experiences as the #1 way to differentiate their offers.13

of surveyed retail executives rated their ability to use data to improve decision-making as ‘poor’ or very poor’.14

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Bringing data together from its various silos is the first step in your data journey. Once it is combined in a single place, it needs to be transformed for analysis so that relevant insights can be generated. Then, you can use this insight to create more personalized experiences for customers and activate those insights across your organization.

BigQuery, Google Cloud’s highly scalable enterprise data warehouse solution, offers real-time insights from streaming data. It also has built-in machine learning capabilities and a high-speed, in-memory BI engine for faster reporting and analysis. And with Looker, an enterprise platform for business intelligence, data applications, and embedded analytics, retailers can understand every aspect of their retail and ecommerce business to optimize in-store operations, increase retail margins, and improve customer lifetime value.

Optimize search and recommendations

In April, over a quarter of US consumers couldn’t find the products they wanted or needed, and nearly 3 in 10 bought brands they don’t normally buy.15 Consumers are adjusting their shopping behaviors to be internet-first, and 49% of shoppers surveyed say they use Google to discover or find a new item or product.16

More than 25% US consumers couldn’t find the products they wanted or needed in April.15

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Enhance the online experience by providing shoppers more of what they love, faster and at scale. Recommendations AI gives retailers the opportunity to increase customer satisfaction and basket size with personalized product recommendations that suit each customer’s tastes and preferences across touchpoints such as web, email, and more.

By leveraging Google’s latest machine learning architectures, retailers can gain dynamic insights into customer behaviors and changes in variables like assortment, pricing, and the impact of special offers in real time. You can then easily customize recommendations to deliver the desired outcome and apply business rules to fine-tune and diversify what shoppers see.

Personalize communications

As well as improving the shopping experience, a 360˚ view of the customer enables you to more effectively personalize communications like email and ads. By being able to store, process, and analyze massive volumes of data in a cost-efficient and agile way, retail marketers can create more effective marketing campaigns based on real-time insights.

In response to the challenges presented by COVID-19, Google has created two extensive guides for retailers: Navigating your retail business and a digital marketing strategy guide to managing ad campaigns through times of uncertainty. Both guides offer practical advice and tips for retailers that are relevant to the 2020 holiday season.

of shoppers say they use Google to discover or find a new item or product.16

Quick tips: Fast, easy, and free evaluation of your retail website

Use the Grow My Store tool for an evaluation of your retail website. Simply enter your website URL and we will analyze your site, give you an overall score, and offer detailed insights and practical recommendations to help you strengthen your business. The analysis will identify areas of improvement and let you compare your business to other retailers.

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Ulta Beauty: Offering personalization at scale

Ulta Beauty is the largest beauty retailer in the United States, with more than 1,000 stores serving customers in all 50 states. Using a range of Google Cloud solutions, the company is redefining beauty retailing with advanced personalization and digital-first experiences.

Customers flock to Ulta Beauty for its impressive selection of products. But with more than 500 brands and 25,000 products carried in-store and online, the choice can be overwhelming. The team saw an opportunity

It’s been a really efficient process so far due in part to the ease of working with the Google team. They’re experienced, approachable, and their can-do style makes for a great partnership. They listened to our needs and worked in tandem with our engineering team, figuring things out, and getting it done.”

Michelle Pacynski, Vice President of Digital Innovation at Ulta Beauty

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to enhance the shopping experience with more personalized navigation, leveraging data from its successful Ultamate Rewards loyalty program.

The Ultamate Rewards loyalty program has more than 30 million members who generate data through sales, transactions, product reviews, and social media engagement. With such a comprehensive data set, Ulta Beauty needed a technology that could organize, analyze, and transform that data into valuable insights for its customers.

Using BigQuery, Ulta Beauty performs data analysis to generate dynamic content, personalized product recommendations, and event-based messages for customers. Data is stored securely and cost effectively using Cloud Storage. Scaling up to meet customer demand is painless with Compute Engine, and Anthos has enabled the team to build a strong hybrid foundation that meets the needs of a growing business.

With its digital core in place, Ulta Beauty was able to respond efficiently to the challenges presented by COVID-19. The company was forced to temporarily close stores but successfully leaned into its online channels to stay connected with shoppers and provide them with engaging experiences like the Virtual Beauty Advisor and the GLAMlab Virtual Makeup Try-On.

The Virtual Beauty Advisor tool built on Google Cloud proved particularly useful by providing consumers with an interactive experience and data-driven product recommendations that increase sales and decrease returns. Guests were able to interact with Ulta’s Virtual Beauty Advisor to learn about and choose the products that are most relevant for them.

The augmented reality (AR)-based GLAMlab Virtual Makeup Try-On allowed guests to see how different beauty products would look on them. Using this experience, shoppers could virtually try on thousands of beauty products and finish with a customized shopping list.

Ulta Beauty customers navigate 500 brands and 25,000 products online using Google technology.

The Virtual Beauty Advisor tool offers an interactive experience and data-driven product recommendations that increase sales and decrease returns.

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04 Provide better customer service at scale

Over half of customer service professionals reported dealing with more complex issues in response to COVID-19, with wait times going up across the board.17 The retail environment won’t be returning to its pre-pandemic normal any time soon, if ever. With demand continuing to fluctuate, supply chains disrupted, and the rapid scaling of new fulfillment models, a sustained rise in customer service volume should be expected this holiday season.

Retailers can quickly act to support their employees and customers by implementing innovative purchasing and service technologies to reduce hold times and alleviate pressure on manned service centers.

Improve customer service with customized, AI-powered agents

With more consumers shopping from home, virtual agents can give your customers the answers they need right away. Rapid Response Virtual Agent provides up-to-date information on your website through chat so customers don’t need to contact you, and automated phone responses to common questions can free your human agents to handle more complex cases.

This solution can be launched in less than two weeks to provide answers to the most common questions around store hours inquiries, inventory questions, and pick-up options. To further improve operational efficiency, Contact Center AI can deliver immediate, personalized customer support with AI that talks naturally, understands customer intent, and can support human customer service agents with real-time, step-by-step assistance.

More than 50% of customer service professionals dealt with more complex issues in response to COVID-19.

Technology can help to alleviate pressure on in-store staff and manned service centers.

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Enable new services and revenue channels with APIs

Application Programming Interfaces (APIs) allow retailers to express parts of their business as software so they can provide or access data of other apps or services. For example, when someone orders movie tickets via a voice assistant, that transaction is only possible because the voice assistant can call APIs that express capabilities such as showtime lookup, location search, and transaction approval.

With well-managed APIs, you can build and deliver mobile apps quickly and easily, free data from silos to drive new insights, and rapidly onboard and integrate third-party suppliers, distributors, and delivery partners. Sometimes the information shared with third parties via APIs is so valuable that you can unlock new revenue channels by monetizing the consumption of those APIs. Apigee, Google’s self-service API management platform, helps to drastically cut the time it takes to onboard new partners from two months to two weeks.

Drive faster check-out experiences

A faster, easier checkout process can lead to more store visits, more time spent shopping, and customers spending more money. With Google Pay, retailers can enable seamless payment methods for buyers both online and in-store. Online, Google Pay makes the buying process faster and easier by letting customers make transactions with payment tokens from their Google Pay app and payment cards from their Google Account. The simple Google Pay API helps you get up and running quickly.

In-store, associates can use Google Pay-enabled Chrome devices to look up items and take contactless payment in the same way. Google’s advanced security infrastructure ensures that account data is kept safe and roaming payment devices support social distancing measures by eliminating the need to congregate by tills.

Use APIs to build and deliver mobile apps quickly, unite to drive insight, and rapidly onboard and integrate third-party suppliers, distributors, and delivery partners.

Faster, easier checkouts can lead to more visits and higher net sales.

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Communicate with customers remotely using Business Messages

In an uncertain business environment, customers will be reluctant to step into stores without confirming information like hours and service policies. Business Messages is a mobile conversational channel that combines entry points on Google Maps, Search, and brand websites to create rich, asynchronous messages.

Build consumer trust by showing expected wait times and answers to frequently asked questions, and enhance customer care with the ability to connect with a live agent. 75% of consumers now prefer to engage with a brand over private messaging versus traditional channels. Business Messages can help route calls to chat, increase sales, and improve customer satisfaction with CSAT data and feedback while reducing your cost to service customer queries.

Quick tips: Reduce checkout friction and cart abandonment

Cart abandonment averages a whopping ~75% for typical retailers. 34% of customers will abandon carts if there is no guest checkout and 26% will abandon if the process is too complicated.

Streamline the payment process by moving Google Pay to the top of the checkout funnel. Google Pay provides billing and shipping addresses to reduce friction and lower cart abandonment.

of consumers prefer to engage with a brand over private messaging versus traditional channels.

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Magazine Luiza (Magalu): Digitally transforming an ecommerce platform

Founded in 1957, Magazine Luiza is one of the largest Brazilian retail companies. Faced with threats from Brazilian ecommerce companies along with global internet giants, Magazine Luiza turned to Apigee, Firebase, and Google Cloud to become one of the most successful ecommerce operations in Brazil.

Fully aware that they were being threatened by competitors in 2013, the then-Chief Operating Officer (current CEO) Frederico Trajano formed a small team of developers that was walled off from IT governance processes and roadblocks of the larger organization, and granted access to the company’s entire ecommerce operation.

Our goal has been to transform from a traditional retail company with a digital presence to a digital platform with a physical presence and a ‘human touch’—and now we’re much closer to that vision.”

Andre Fatala, Chief Technology Officer, Magazine Luiza

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Apigee API management platform helped the team decouple the front-end and back-end systems, making it easier and faster for the team to iterate on new apps, while other teams maintained their legacy systems of record.

Magazine Luiza’s approach accelerated mobile application development, and Firebase played a major role in this process. Now they can quickly publish and test new features, and Firebase Crashlytics helps maintain the app’s stability and keeps users happy.

After Google Cloud launched in Brazil in 2018, Magazine Luiza began deploying workloads onto Google Cloud. The speed was notable – a critical consideration for ecommerce applications.

Due to the need for better performance and stability during Black Friday, Magazine Luiza decided to migrate 113 apps to Google Cloud less than 60 days prior to this important date. It was a move that paid off: Black Friday 2018 was the company’s biggest to date and has continued to grow since then.

With this newfound ease and speed of spinning up new services and customer experiences and adjusting existing ones, everyone is able to work in small teams of five or six people that handle segments of an application, whether it is for online checkout, physical store checkout, or order management. They now work more like a software company than a retail company.

Google Cloud technologies also helped expand the ecommerce strategy to third-party sellers and created a new digital marketplace. Other merchants can easily join this ecosystem via the API platform. Today, Magazine Luiza supports more than 3,300 vendors and offers 4.3 million SKUs.

Customers in Brazil enjoy the convenience of ordering from their computers or smartphones, but still appreciate going to stores to pick up their items. In fact, two-thirds of Brazilians buy this way. To make it even easier for customers, the team at Magazine Luiza built 12 in-store apps that salespeople use to make the once-slow sales process much faster, which helped boost physical store sales 25.8% in 2018.

apps were moved to Google Cloud in the 60 days leading up to Black Friday.

In-store apps helped to boost physical store sales 25.8% in 2018.

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05 Leverage proven protocols for peak-season readiness

These five keys to success are aimed at helping you achieve one goal: peak-season readiness. During a time when availability and scalability issues can cause millions of dollars in lost sales, it pays to prepare.

Google Cloud’s proven, peak-season recommendations are designed to be easy-lifts that complement or integrate with your existing plans and system. And our Black Friday/Cyber Monday (BFCM) protocols and white glove services can support your team to ensure you have what you need to manage the rush.

Plan, prepare, and execute

A survey of more than 200 US retail executives revealed that a startling 10% experienced an outage during BFCM, preventing sales and creating negative brand perceptions. Better management of the three distinct stages of peak events—planning, preparation, and execution—will help to ensure that unexpected downtime doesn’t occur, and your team knows what to do if it does.

Our peak-season readiness guide is a step-by-step whitepaper on creating execution plans for expected periods of peak user traffic. The guide outlines areas that can help you increase organizational readiness and system reliability so that peak events become non-events.

White-glove support

A solid technology infrastructure is the foundation for retailers to stay ahead of demand and succeed during busy seasons. Pair that with the support of Google Cloud’s white-glove experience, a range of services that help retailers to plan and execute peak seasons flawlessly.

of surveyed retail executives said their business experienced an outage during BFCM last year.

Follow the peak-season step-by-step readiness guide to create execution plans for the holiday period.

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Google Cloud engineers work shoulder to shoulder with retail customers’ IT teams to ensure their ecommerce systems have the scalability and reliability they need in peak seasons. The tailored services take retailers from early capacity planning and architectural reviews through to reliability testing, and the operational war room created to execute the plan.

Retail Acceleration Program

Google Cloud’s Retail Acceleration Program (RAP) is designed to offer more in-depth assistance to select retailers. From helping to optimize websites to building a unified view of customer data and driving foot traffic, RAP is focused on accelerating retailers’ digital growth and enhancing customer experiences, especially during peak seasons. Learnings from the program help us in identifying industry best practices.

Quick tips: Learn from prior peak events and better prepare for future ones No matter the process, learning from prior events is important, especially if it highlights known constraints to the system under stress. Review any known issues that may have arisen during past peak events and ensure they have been resolved or are prioritized for action.

‘Blameless’ postmortems—written records of an incident, its impact, the actions taken to mitigate or resolve it, the root cause(s), and the follow-up actions to prevent the incident from recurring—are a useful technique for capturing data and understanding incidents that occurred.

Accelerate digital growth and enhance the customer experience with tailored, in-depth assistance provided by RAP.

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Tokopedia: Running large-scale shopping events

Founded on the mission to democratize commerce through technology, Indonesia-based ecommerce giant Tokopedia wants to transform lives by reducing distances between merchants and consumers. Its aim is to help individuals and business owners across Indonesia open and manage their own online stores, while providing a safer, more convenient online shopping experience for users. This has made it one of the country’s leading tech companies, with an online marketplace serving 5.9 million merchants and 90 million active users every month.

We benefited from the knowledge of Google Cloud engineers who have the experience of running large-scale events. We were able to roll out the new technology faster, and with more confidence than we would have if we were doing it without their support.”

Tahir Hashmi, Vice President of Engineering, Tokopedia

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To support its vision, Tokopedia launched Ramadan Ekstra, the first-ever online shopping festival in Indonesia, on Google Cloud. A large-scale shopping event that rivals Black Friday in the US and Singles’ Day in China, Ramadan Ekstra attracted over 332 million visits to the Tokopedia platform during the Muslim holy month of Ramadan. The event was so successful that the transactions from May 25 alone equaled the total transactions from Tokopedia’s first five years of operations.

To create optimal retail experiences during large-scale shopping events, Tokopedia runs the overall design by the Google Cloud team to see if it fits Google Cloud infrastructure, and sets up load and performance testing to simulate large-scale traffic on the application. This exercise gives the team plenty of time to uncover and resolve bottlenecks. Before executing the event, Tokopedia coordinates with Google Cloud to freeze changes during the promotion timeframe so network performance isn’t affected by software updates or bug fixes.

Before moving to Google Cloud, Tokopedia experienced scalability and reliability issues with its previous service provider. One major challenge was that Tokopedia’s largest scale interactive product Tokopedia Play could only support 55,000 concurrent users. The application was rebuilt as a microservice on GKE in five weeks and is now able to support 1.5 million concurrent users. Tokopedia manages and secures the microservices with Istio service mesh and configures global load balancing on GKE for resiliency.

Autoscaling comes in handy when Tokopedia runs limited time campaigns such as the Semarak Maret Mantap, or ‘Great March,’ that encourages users to open the Tokopedia Play app on their phone and shake it to win prizes. The application, supported by Google Cloud, scaled servers down by 30x after the dual-screen event on TV and the Tokopedia app ended. Tokopedia saved money by not having to provision hardware just for that purpose.

Tokopedia’s first-ever large-scale shopping event generated over 332 million visits during the month of Ramadan.

scale down on Tokopedia servers after major events, contributing to major savings.

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How Google Cloud can help

Holiday season success in 2020 will be determined by each retailer’s ability to adapt to uncertainty and unpredictability. The lingering effects of the pandemic indicate that shoppers will continue to prioritize ecommerce. But, how much they spend—and where they spend it—has yet to be defined.

While there are many avenues you can take to prepare for this year’s holiday season, your priorities will depend on your unique business needs. Success will hinge on optimizing the technology you already have in place, leveraging new and advanced functionalities, and leaning into the support that partners like Google Cloud can provide with planning and execution.

In today’s world, retailers are faced with new, unique, and potentially long-lasting challenges. Google Cloud has the industry solutions and expertise to help you succeed through this holiday season and into the next.

We bring together the best of Google products, from Search and Maps to Images and Assistant, to enable retailers to connect with customers around the corner and around the globe.

Along with our global ecosystem of partners, we can help you drive a faster path to value with pre-built, quick-to market, and customer-centric solutions. Reach out to us to see how we can help you prepare and plan for what lies ahead.

Learn more about Google Cloud for Retail.

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Sources

1. eMarketer, What Grocery Retailers Can Learn from the Past Weeks, May 6, 2020

2. eMarketer, US Ecommerce 2020 Coronavirus Boosts Ecommerce Forecast and Will Accelerate Channel-Shift, June 2020

3. Forbes, COVID-19 Accelerated E-Commerce Growth ‘4 to 6 Years,’ June 12, 2020

4. Google/Ipsos, U.S. Shopping Tracker, March 2020

5. Google/Ipsos, Shopping Tracker, Jan, Feb, Mar, April 2020

6. McKinsey and Company, Consumer sentiment is evolving as countries around the world reopen, June 2020

7. eMarketer, Ecommerce Decelerates amid Global Retail Contraction but Remains a Bright Spot, June 2020

8. Google, The Performance Imperative: A retailer’s guide to today’s ecommerce landscape, 2019

9. Google commissioned Ipsos COVID-19 tracker, US, CA, UK, FR, DE, IT, AU, JP, RU, IN, CN, BR, MX, ES, ZA, KR n=1000 online consumers 18+ per market. May 7-10

10. Google commissioned Ipsos COVID-19 tracker, US, CA, UK, FR, DE, IT, AU, JP, RU, IN, CN, BR, MX, ES, ZA, KR n=1000 online consumers 18+ per market. May 7-10

11. Google Data, Global English, March 29, 2020–April 4, 2020 vs. March 22, 2020–March 28, 2020

12. Forbes, COVID-19 Accelerated E-Commerce Growth ‘4 to 6 Years,’ June 12, 2020

13. Google, The Performance Imperative: A retailer’s guide to today’s eCommerce landscape, 2019

14. Google/Incisiv, Store Operations Point of View: Research Insights & Analysis

15. Google commissioned Ipsos COVID-19 tracker, Global, AU, BR, CA, CN, FR, DE, IN, IT, JP, MX, RU, ES, U.K., U.S. n=1000, VN n=500 online consumers 18+ per market, April 2, 2020–April 5, 2020.

16. Google/Ipsos, Global, Global Retail Study, Base: total sample (n=14,206), online 18+ who shopped in the last week, countries included: AR, AU, BR, CA, CZ, FR, DE, IN, ID, IT, JP, KR, MX, NL, PL, PT, RU, SA, ZA, ES, SE, TR, UA, GB, U.S., AE, VN, Feb. 2019.

17. Digital Commerce 360, On hold: Retailers encounter customer service strains amid coronavirus, May 13 2020

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