How REI Used Automation to Cloudify Infrastructure and Rapidly Adjust its Digital Pandemic Response

Transcript of a discussion on how REI kept its digital customers and business leadership happy using rapidly adaptable IT infrastructure, even as the world around them was suddenly shifting.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of Innovation podcast series.

Gardner

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on IT infrastructure automation and efficiency.

Like many retailers, Recreational Equipment, Inc. (REI) was faced with drastic and rapid change when the COVID-19 pandemic struck. REI’s marketing leaders wanted to make sure that their online e-commerce capabilities would rise to the challenge. They expected a nearly overnight 150 percent jump in REI’s purely digital business.

Fortunately REI’s IT leadership had already advanced their systems to heightened automation, which allowed the Seattle-based merchandiser to turn on a dime and devote much more of its private cloud to the new e-commerce workload demands.

Stay with us as we learn how REI kept its digital customers and business leadership happy, even as the world around them was suddenly shifting.

To explore what works for making IT agile and responsive enough to re-factor a private cloud at breakneck speed, we’re joined by Bryan Sullins, Senior Cloud Systems Engineer at REI in Seattle. Welcome to BriefingsDirect, Bryan.

Bryan Sullins: Thanks, Dana. I appreciate it and I’m happy to be here.

Gardner: When the pandemic required you to hop-to, how did REI manage to have the IT infrastructure to actually move at the true pace of business? What put you in a position to be able to act as you did?

Digital retail demands rise 

Sullins: In addition to the pandemic stay-at-home orders a couple months ago, we also had a large sale previously scheduled for the middle of May. It’s the largest sale of the year, our anniversary sale.

Sullins

And ramping up to that, our marketing and sales department realized that we would have a huge uptick in online sales. People really wanted to get outside, because people could go outside without breaking any of the social distancing rules.

For example, bicycle sales were up 310 percent compared to the same time last year. So in ramping up for that, we anticipated our online presence at rei.com was going to go up by 150 percent, but we wanted to scale up by 200 percent to be sure. In order to do that, we had to reallocate a bunch of ESXi hosts in VMware vSphere. We either had to stand up new ones or reallocate from other clusters and put them into what we call our digital retail presence.

As a result of our fully automated process, using Hewlett Packard Enterprise (HPE) OneView, Synergy, and Image Streamer, we were able to reallocate 6 out of the 17 total hosts needed. We were able to do that in 18 minutes, all at once -- and that’s single touch, that’s launching the automation and then pulling them from one cluster and decommissioning them and placing them all the way into the digital retail clusters.

We also had to move some from our legacy platform, they aren’t at HPE Synergy yet, and those took an additional three days. But those are in transition, we are moving through to that fully automated platform all around.

Gardner: That’s amazing because just a few years ago that sort of rapid and automated transition would have been unheard of. Even at a slow pace you weren’t guaranteed to have the performance and operations you wanted.

If you were not able to do this using automation – if the pandemic had hit, heaven forbid, five or seven years ago – what would have been the outcome?

We needed to make sure we had the infrastructure capacity so that nothing failed under a heavy load. We were able to do it in the time-frame, and be able to get some sleep.

Sullins: There were actually two outcomes from this. The first is the fairly obvious issue of not being able to handle the online traffic on our rei.com retail presence. It could have been that people weren’t able to put stuff into a shopping cart, or inventory decrement, and so on. It could have been a very broad range of things. We needed to make sure we had the infrastructure capacity so that none of that fails under a heavy load. That was the first part.

Gardner: Right, and when you have people in the heat of a purchasing moment, if you’re not there and it’s not working, they have other options. Not only would you lose that sale, you might lose that customer, and your brand suffers as well.

Sullins: Oh, without a doubt, without a doubt.

The other issue, of course, would have been if we did not meet our deadline. We had just under a week to get this accomplished. And if we had to do this without a fully automated approach, we would have had to return to our managers and say, “Yeah, so like we can’t do it that quickly.” But with our approach, we were able to do it all in the time frame -- and be able to get some sleep in the interim. So it was a win-win.

Gardner: So digital transformation pays off after all?

Sullins: Without a doubt.

Gardner: Before we learn more about your journey to IT infrastructure automation, tell us about REI, your investments in advanced automation, and why you consider yourself a data-driven digital business?

Automation all the way 

Sullins: Well, a lot of that precedes me by quite a bit. Going back to the early 2000s, based on what my managers tell me, there was a huge push for REI become an IT organization that just happens to do retail. The priority is on IT being a driving force behind everything we do, and that is something that, at the time, REI really needed to do. There are other competitors, which we won’t name, but you probably know who they are. REI needed to stay ahead of that curve.

So since then there have been constant sweeping and cyclical changes for that digital transformation. The most recent one is the push for automating all things. So that’s the priority we have. It’s our marching orders.

Gardner: In addition to your company, culture, and technology, tell us about yourself, Bryan. What is it about your background and personal development that led you to be in a position to act so forthrightly and swiftly?

Sullins: I got my start in IT back in 1999. I was a public school teacher before that, and then I made the transition to doing IT training. I did IT training from 1999 to about 2012. During those years, I got a lot of technology certifications, because in the IT training world you have to.

I began with what was, at the time, called the Microsoft Certified Solutions Expert (MCSE) certification. Then I also did the Linux Professional Institute. I really glommed on to Linux. I wanted to set myself apart from the rest of the field back then, so I went all-in on Linux.

And then, 2008-2009-ish, I jumped on the VMware train and went all-in on VMware and did the official VMware curriculum. I taught that for about three years. Then, in 2012, I made the transition from IT training into actually doing this for real as an engineer working at Dell. At the time, Dell had an infrastructure-as-a-service (IaaS) healthcare cloud that was fairly large – 1,200-plus ESXi hosts. We were also responsible for the storage and for the 90-plus storage area network (SAN) arrays as well.

In a large environment, you really have to automate. It's been the focus of my career. I typically jump right into new technology.

In an environment that large, you really have to automate. I cut my teeth on automating through PowerCLI and Ansible. Since then, about 2015, it’s been the focus of my career. I’m not saying I’m a guru, by any means, but it’s been a focus of my career.

Then, in 2018, REI came calling. I jumped on that opportunity because they are a super-awesome company, and right off the bat I got free reign over: if you want to automate it, then you automate it. And I have been doing that ever since August of 2018.

Gardner: What helped you make the transition from training to cloud engineer?

Sullins: I typically jump right into new technology. I don’t know if that comes from the training or if that’s just me as a person. But one of the positives I’ve gotten from the training world is that you learn a 100 percent of the feature base that’s available with said technology. I was able to take what I learned and knew from VMware and then say, “Okay, well, now I am going to get the real-world experience to back that up as well.” So it was a good transition.

Gardner: Let’s look at how other organizations can anticipate the shift to automation. What are some of the challenges that organizations typically face when it comes to being agile with their infrastructure?

Manage resistance to cloud 

Sullins: The challenges that I have seen aren’t usually technical. Usually the technology that people use to automate things are ready at hand. Many are free; like Ansible, for example, is free. PowerCLI is free. Jenkins is free.

So, people can start doing that tomorrow. But the real challenge is in changing people’s mindset about a more automated approach. I think that it’s tough to overcome. It’s what I call provisioning by council. More traditional on-premises approaches have application owners who want to roll out x number of virtual machines (VMs), with all their particular specs and whatnot. And then a council of people typically looks at that and kind of scratches their chin and says, “Okay, we approve.” But if you need to scale up, that council approach becomes a sort of gate-keeping process.

With a more automated approach, like we have at REI, we use a cloud management platform to automate the processes. We use that to enable self-service VMs instead of having a roll out by council, where some of the VMs can take days or weeks roll out because you have a lot of human beings touching it along the way. We have a lot of that process pre-approved, so everybody has already said, “Okay, we are okay with the roll out. We are okay with the way it’s done.” And then we can roll that out in 7 to 10 minutes rather than having a ticket-based model where somebody gets to it when they can. Self-service models are able to do that much better.

But that all takes a pretty big shift in psychology. A lot of people are used to being the gatekeeper. It can make them uncomfortable to change. Fortunately for me, a lot of the people at REI are on-board with this sort of approach. But I think that resistance can be something a lot of people run into.

Gardner: You can’t just buy automation in a box off of a shelf. You have to deal with an accumulation of manual processes and habits. Why is moving beyond the manual processes culture so important?

Sullins: I call it a private cloud because that means there is a healthy level of competition between what’s going in the public cloud and what we do in that data center.

The public cloud team has the capability of “selling” their solution side-by-side with ours. When you have application owners who are technically adept -- and pretty much all of them are at REI -- they can be tempted to say, “Well, I don’t want to wait a week or two to get a VM. I want to create one right now out on the public cloud.”

There is a healthy level of competition between what's going in the public cloud and what we do in the date center. We offer our customers a spectrum of services. And now they can do that in an automated way. That's a big win.

That’s a big challenge for us. So what we are trying to accomplish -- and we have had success so far through the transition – is to offer our customers a spectrum of services. So that’s great.

The stakeholders consuming that now gain flexibility. They can say, “Okay, yeah, I have this application. I want to run it in the public cloud, but I can’t based on the needs for that application. We have to run it on-premises.” And now they can do that in an automated way. That’s a big win, and that’s what people expect now, quite honestly.

Gardner: They want the look and feel of a public cloud but with all the benefits of the private cloud. It’s up to you to provide that. Let’s find out how you did.

How did you overcome the challenges that we talked about and what are the investments that you made in tools, platforms, and an ecosystem of players that accomplished it?

Sullins: As I mentioned previously, a lot of our utilities are “free,” the Ansibles of the world, PowerCLI, and whatnot. We also use Morpheus to do self-service and the implications behind automating things on what I call the front end, the customer face. The issue you have there is you don’t get that control of scaling up before you provision the VM. You have to monitor and then roll it out on the backend. So you have to monitor for usage and then scale up on the backend, and seamlessly. The end users aren’t supposed to know that you are scaling up. I don’t want them to know. It’s not their job to know. I want to remain out of their way.

In order to do that, we’ve used a combination of technologies. HPE actually has a GitHub link for a lot of Ansible playbooks that plug right in. And then the underlying hardware adjacent management ecosystem platform is HPE OneView with HPE Synergy and Image Streamer. With a combination of all of those technologies we were able to accomplish that 18-minute roll-out of our various titles.

Gardner: Even though you have an integrated platform and solutions approach, it sounds like you have also made the leap from ushering pets through the process into herding cattle. If you understand my metaphor, what has allowed you to stop treating each instance as a pet into being able to herd this stuff through on an automated basis?

From brittle pets to agile cattle 

Sullins: There is a psychological challenge with that. In the more traditional approach – and the VMware shop listeners are going to be very well aware of this -- I may need to have a four-node cluster with a number of CPUs, a certain amount of RAM, and so on. And that four-node cluster is static. Yes, if I need to add a fifth down the line I can do that, but for that four-node cluster, that’s its home, sometimes for the entire lifecycle of that particular host.

With our approach, we treat our ESXi hosts as cattle. The HPE OneView-Synergy-Image Streamer technology allows us to do that in conjunction with those tools we mentioned previously, for the end point in particular.

So rather than have a cluster, and it’s static and it stays that way -- it might have a naming convention that indicates what cluster it’s in and where -- in reality we have cattle-based DNS names for ESXi hosts. At any time, the understanding throughout the organization, or at least for the people who need to know, is that any host can be pulled from one cluster automatically and placed into another, particularly when it comes to resource usage on that cluster. My dream is that the robots will do this automatically.

So if you had a cluster that goes into the yellow, with its capacity usage based on a threshold, the robot would interpret that and say, “Oh, well, I have another cluster over here with a host that is underutilized. I’m going to pull it into the cluster that’s in the yellow and then bring it back into the green again.” This would happen all while we sleep. When we wake up in the morning, we’d say, “Oh, hey, look at that. The robots moved that over.”

Gardner: Algorithmic operations. It sounds very exciting.

Automation begets more automation 

Sullins: Yes, we have the push-button automation in place for that. It’s the next level of what that engine is that’s going to make those decisions and do all of those things.

Gardner: And that raises another issue. When you take the plunge into IT automation, you are making your way down the Chisholm Trail with your cattle, all of a sudden it becomes easier along the way. The automation begets more automation. As you learn and grow, does it become more automated along the way?

Sullins: Yes. Just to put an exclamation point on this topic, imagine the situation we opened the podcast with, which is, “Okay, we have to reallocate a bunch of hosts for rei.com.” If it’s fully automated, and we have robots making those decisions, the response is instantaneous. “Oh, hey, we want to scale up by 200 percent on rei.com.” We can say, “Okay, go ahead, roll out your VM. The system will react accordingly. It will add physical hosts as you see fit, and we don’t have to do anything, we have already done the work with the automation.” Right?

But to the automation begetting automation, which is a great way of putting it, by the way, there are always opportunities for more automation. And on a career side note, I want to dispel the myth that you automate your way out of a job. That is a complete and total myth. I’m not saying it doesn’t happen, where people get laid off as a result of automation. I’m not saying that doesn’t happen, but that’s relatively rare because when you automate something, that automation is going to need to be maintained because things change over time.

The other piece of that is a lot of times you have different organizations at various states of automation. Once you get your head above water to where it's, “Okay, we have this process and now it's become trivial because it's been automated.” We can now concentrate on automating either more things -- or you have new things that need to be automated. And whether that’s the process for only VMs, a new feature base, monitoring, or auto-scaling -- whatever it is -- you have the capability of from day one to further automate these processes.

Gardner: What was it specifically about the HPE OneView and Synergy that allowed you to move past the manual processes, firefighting, and culture of gatekeeping into more herding of cattle and being progressively automated?

Sullins: It was two things. The Image Streamer was number one. To date, we don’t run PXE boots infrastructure, not that we can't, it’s just not something that we have traditionally done. We needed a more standard process for doing that, and Image Streamer fit that and solved that problem.

The second piece is the provided Ansible playbooks that HPE has to kick off the entire process. If you are somewhat versed in how HPE does things through OneView, you have a server profile that you can impose on a blade, and that can be fully automated through Ansible.

Image Streamer allows us to say, "Okay, we build a gold image. We can apply that gold image to any frame in the cluster." We needed a more standard process, and Image Streamer solved that problem.

And, by the way, you don’t have to use Image Streamer to use Ansible automation. This is really more of an HPE OneView approach, whereby you can actually use it to do automated profiles and whatnot. But the Image Streamer is really what allows us to say, “Okay, we build a gold image. We can apply that gold image to any frame in the cluster.” That’s the first part of it, and the rest is configuring the other side.

Gardner: Bryan, it sounds like the HPE Composable Infrastructure approach works well with others. You are able to have it your way because you like Ansible, and you have a history of certain products and skills in your organization. Does the HPE Composable Infrastructure fit well into an ecosystem? Is it flexible enough to integrate with a variety of different approaches and partners?

Sullins: It has been so far, yes. We have anticipated leveraging HPE for our bare metal Linux infrastructure. One of the additional driving forces and big initiatives right now is Kubernetes. We are going all-in on Kubernetes in our private cloud, as well as in some of our worker nodes. We eventually plan on running those as bare metal. And HPE OneView, along with Image Streamer, is something that we can leverage for that as well. So there is flexibility, absolutely, yes.

Coordinating containers 

Gardner: It’s interesting, you have seen the transition from having VMware and other hypervisor sprawl to finding a way to manage and automate all of that. Do you see the same thing playing out for containers, with the powerful endgame of being able to automate containers, too?

Sullins: Right. We have been utilizing Rancher as part of our coordination tool for our Kubernetes infrastructure and utilizing vSphere for that. So we are using that.

As far as the containerization approach, REI has been doing containers before containers was a big thing. Our containerization platform has been around since at least 2015. So REI has been pretty cutting edge as far as that is concerned.

And now that Kubernetes has won the orchestration wars, as it were, we are looking to standardize that for people who want to do things online, which is to say, going back to the digital transformation journey.

Basically, the industry has caught up with what our super-awesome developers have done with containerization. But we are looking to transition the heavy lifting of maintaining a platform away from the developers. Now that we have a standard approach with Kubernetes, they don’t have to worry so much about it. They can just develop what they need to develop. It will be a big win for us.

Gardner: As you look back at your automation journey, have you developed a philosophy about automation? How this should this best work in the future?

Trust as foundation of automation 

Sullins: Right. Have you read Gene Kim’s The Unicorn Project? Well, there is also his The Phoenix Project. My take from that is the whole idea of trust, of trusting other people. And I think that is big.

I see that quite a bit in multiple organizations. For REI, we are going to work as a team and we trust each other. So we have a pretty good culture. But I would imagine that in some places that is still big challenge.

And if you take a look at The Unicorn Project, a lot of the issues have to do with trusting other human beings. Something happened, somebody made a mistake, and it caused an outage. So they lock it up and lock it away and say only certain people can do that. And then if you multiply that happening multiple times -- and then different individuals walking that down -- it leads to not being able to automate processes without somebody approving it, right?

Gardner: I can't imagine you would have been capable, when you had to transition your private cloud for more online activity, if you didn’t have that trust built into your culture.

Sullins: Yes, and the big challenge that might still come up is the idea of trusting your end users, too. Once you go into the realm of self-service, you come up on the typical what-ifs. What if somebody adds a zero and they meant to only roll out 4 VMs but they roll out 40? That’s possible. How do you create guardrails that are seamless? If you can, then you can trust your users. You decrease the risk and can take that leap of faith that bad things won’t happen.

Gardner: Tell us about your wish list for what comes next. What you would like HPE to be doing?

Small steps and teamwork rewards 

Sullins: My approach is to first automate one thing and then work out from there. You don’t have to boil the ocean. Start with something small and work your way up.

As far as next steps, we want auto scaling a physical layer and having the robots do all of that. The robots will scale up and down our requesters while we sleep.

We will continue to do application programming interface (API)-capable automation with anything that has a REST API. If we can connect to that and manipulate it, we can do pretty much whatever automation we want.

We are also containerizing all things. So if any application can be containerized properly, containerize it if you can.

As far as what decision-making engine we have to do the auto-scaling on the physical layer, we haven’t really decided upon what that is. We have some ideas but we are still looking for that.

Gardner: How about more predictive analytics using artificial intelligence (AI) with the data that you have emanating from your data center? Maybe AIOps?

Sullins: Well, without a doubt. I, for one, haven’t done any sort of deep dive into that, but I know it’s all the rage right now. I would be open to pretty much anything that will encompass what I just talked about. If that’s HPE InfoSight, then that’s what it is. I don’t have a lot of experience quite honestly with InfoSight as of yet. We do have it installed in a proof of concept (POC) form, although a lot of the priorities for that have been shifted due to COVID-19. We hope to revisit that pretty soon, so absolutely.

Gardner: To close out, you were ahead of the curve on digital transformation. That allowed you to be very agile when it came time to react to the COVID-19 pandemic.  What did that get you? Do you have any results?

Sullins: Yes, as a matter of fact, our boss’s boss, his boss -- so three bosses up from me -- he actually sits in on our load testing. It was an all-hands-on-deck situation during that May online sale. He said that it was the most seamless one that he had ever seen. There were almost no issues with this one.

We had done what we needed on the infrastructure side to make sure that we met dynamic demands. It was very successful. We went past our goals, so it was a win-win all the way around.

What I attribute that to is, yes, we had done what we needed on the infrastructure side to make sure that we met dynamic demands. Also, everybody worked as a team. Everybody, all the way up the stacks, from our infrastructure contribution, to the hypervisor and hardware layer, all the way on up to the application layer and the containers, and all of our DevOps stuff. It was very successful. We went past our goals of what we had thought for the sale, so it was a win-win all the way around.

Gardner: Even though you were going through this terrible period of adjustment, that’s very impressive.

Sullins: Yes.

Gardner: I’m afraid we’ll have to leave it there. We have been exploring how REI faced drastic and rapid IT demand shifts when the COVID-19 pandemic struck. And we have learned how an embrace of digital business transformation, highly automated systems operations, and a modern ecosystem of platforms and advanced technology solutions saved the day.

So please join me in thanking our guest, Bryan Sullins, Senior Cloud Systems Engineer at REI. Thank you, Bryan.

Sullins: Thanks, Dana. And shameless plug, if I may.

Gardner: Please.

Sullins: My personal blog is thinkingoutcloud.org and I encourage people to go there, because the how-to on how we accomplish much of what we talked about here I have blog posts for there. And you can contact me at @RussianLitGuy on Twitter.

Gardner: And thanks as well to our audience for joining this sponsored BriefingsDirect Voice of Innovation discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HPE-supported discussions.

Thanks again for listening. Please pass this along to your IT community, and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how REI kept its digital customers and business leadership happy, even as the world around them was suddenly shifting. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

You may also be interested in:

• How IT modern operational services enables self-managing, self-healing, and self-optimizing
• HPE Pointnext’s Nine-Step Plan for Enterprises to Attain the New Business Normal
• As containers go mainstream, IT culture should pivot to end-to-end DevSecOps
• AI-first approach to infrastructure design extends analytics to more high-value use cases
• How Intility uses HPE Primera intelligent storage to move to 100 percent data uptime
• As hybrid IT complexity ramps up, operators look to data-driven automation tools
• Cerner’s lifesaving sepsis control solution shows the potential of bringing more AI-enabled IoT to the healthcare edge
• How containers are the new basic currency for pay as you go hybrid IT
• HPE strategist Mark Linesch on the surging role of containers in advancing the hybrid IT estate

How Retailers Can Get a Much-Needed Makeover Thanks to Data-Driven Insights, Edge Computing, and Revamped User Experiences

Transcript of a discussion on how data-driven intelligence, edge computing, and rethinking of the user experience come together to give retailers a clear path to digital transformation.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Customer podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on digital transformation success stories. Stay with us now to learn how agile businesses are fending off disruption -- in favor of innovation.

Gardner

Our next vertical industry disruption solutions interview explores how intelligence, edge computing, and a rethinking of the user experience come together to give retailers a business-boosting makeover.

We’ll now learn how Deloitte and Hewlett Packard Enterprise (HPE) are helping traditional retailers -- as well as hospitality organizations and restaurants -- provide a more consistent, convenient, and contiguous user experience across their businesses.

Here to help to define the new digitally enhanced retail experience is Kalyan Garimella, IoT Manager at Deloitte Consulting. Welcome.

Kalyan Garimella: Thanks for having me, Dana.

Gardner: We’re also joined by Jeff Carlat, Senior Director of Technology Solutions at HPE. Welcome, Jeff.

Jeff Carlat: Great to be back. Thanks, Dana.

Gardner: Jeff, what are the top trends now driving the amazing changes in retail?

Retail demise untrue

Carlat

Carlat: First off, I want to clear the air. Retail is not dead. Everywhere I go I hear that the retailer is dead, no more brick and mortar. It's a fallacy. There is a retail apocalypse out there, but quite honestly 85 to 90 percent of purchases still go through the brick-and-mortar retailer.

The retail apocalypse does apply to brick-and-mortar stores that are failing to transform to fully embrace the digitalization  expected by consumers today. We are here to do something about it.

Gardner: Kalyan, user experiences have always been important. You can go back to Selfridges in London more than 100 years ago. People understand the importance of user experience. What's different now in the digital age? 

Garimella: Unfortunately, if you think about it, going back for the past four decades, retailers have relied on brand names and the strength of the merchandise to attract more customers. They never really differentiated themselves from the experiences that they were creating versus what their competitors were creating.

With the advent of changing customer demographics -- with Millennials, Gen Ys, Gen Xs coming into the picture -- retailers now need to produce a more customized shopping experience. They need to give shoppers a reason to escape their online retail channels, to come to brick-and-mortar shops and make more purchases there. It’s high time we give that to them -- and make them come back to the stores.

Gardner: There are still things in the physical world that need to remain in the physical world, right, Jeff?

Virtual-real hybrid

Carlat: Exactly right! Take me, for example. We recently bought a new house and I wanted to get a nice La-Z-Boy chair. I’m the kind of guy who’s not going to just push a button on a computer or a handheld to buy a new chair. I’m going to want to go sit in it. I want to know is this right for me, and so I go to a traditional brick-and-mortar outlet.

How HPE and Deloitte
Align IT
With Business Strategies

Yes, I may do my research [online]. I may actually end up [online] doing my purchase and having it shipped directly to my home. But while I’m at the store, I want to have an experience -- an immersive experience -- that's going to help suggest to me, “Oh what's the perfect side table that should go with that? What’s the complementary piece of art that actually matches the fabric?”

I want the capability to know what that chair will look like in my own decor, via virtually imposing that chair into my environment. That's where the world is going. Those are the demands of the new retail environment, and they will separate those that continue to thrive in the retail environment from those that suffer and decline.

Gardner: And, of course, the people in that physical environment might actually know quite a bit about the purchase that you could gain from. They have been doing this for some time. There is the interaction of a consultancy effect when you are in a sales environment.

Garimella

Garimella: People are always going to be a key asset no matter where we do it and in whichever industry. If we can complement the existing user knowledge that exists in the retail stores with the intelligence, or analytics and data that go along with it -- that's a powerful combo. We want to provide that. 

That's why we are talking about helping brick and mortars attract more customers -- not just by increasing the customer experience and optimizing your digital store operations -- by combining data and insights, and not relying only on opinions.

Gardner: Is that what we mean by cross-channel experiences, Jeff?

Easy as 1-2-3

Carlat: We, together with Deloitte, are delivering in early 2018 the Connected Consumer for Retail offering. It’s definitely a cross-channel experience. This takes the cross-channel experience and enhances it for the brick-and-mortar environment.

The Connected Consumer for Retail offering is based on three core principles. Principle number one is providing that enhanced customer experience, that immersive experience, which ultimately increases revenues and basket sizes for retailers.

The Connected Consumer for Retail offering takes the cross-channel experience and enhances it for the brick-and-mortar environment.

The second principle is based on optimizing in-store operations. How do you ensure that you have the right amount of stock -- not overstocking and not under-stocking? How do you reduce the amount of a lost inventory? This Connected Consumer offering will help shrink and reduce the cost structures in a brick-and-mortar environment.

And finally, as Kalyan mentioned, the third key principle is around driving new insights from the in-store analytics. That data and intelligence is derived from the customers -- coming through video-location analytics and all kinds of integration into social networks. You can know so much more about the customer, and then give that customer a personalized experience that brings them back and increases brand loyalty.

Gardner: I suppose it’s important to connect all of the dots across an entire shopping ecosystem process – from research to purchase to installation to service. Is that what we need?

Garimella: Absolutely, and that is what we refer to as an omni-channel experience, or a unified commerce experience. Our customers these days expect a seamless continuous shopping experience -- be it online or in a store. If you can create that consistent behavior and shopping experience, that is a powerful channel to attract even more customers. 

There are many retail concepts very much in demand right now, such as online delivery or pickup at the store. Or you can order in-store and have delivery to your house. Or you can order in one store and pick up in other stores, if the inventory is not currently available in the initial store.

So whatever channel they choose, you can provide value in each of those steps back to the customer – and in doing so you are attracting loyalty, you are building the brand. And that is a powerful medium.

Deloitte and HPE Collaboration
Span 20 Years and 
Myriad IT Solutions

Gardner: And the more interactions, the more data, the more feedback, the more analysis, and the better the experience. It can all tie together.

Let’s talk about how the technology accomplishes that. You mentioned a new retail initiative at HPE in partnership with Deloitte. What are fundamental technology underpinnings that allow this to happen?

Solid foundations for success

Garimella: The Connected Consumer for Retail begins at the infrastructure level -- solutions around HPE Aruba, HPE Edgeline Systems portfolio, and other converged infrastructure systems. For location-based analysis, we are using the wireless LAN from Aruba and their Meridian App Platform for mobile. From a security layer, we are using Niara and ClearPass, but we are also working with a set of third-party vendors for radio-frequency identification (RFID) and for video analytics. So it amounts to an ecosystem of the right partners to solve the right business problem for each of those retailers.

Gardner: And, of course, it has to be integrated properly, and that is where Deloitte comes in. How does that come together into an actual solution?

Carlat: This is the beauty of working with a group like Deloitte. They bring together the consultative and advisory capabilities, along with the technical integration needed. Deloitte brings the ability to help the customer figure out how to get started on this journey. 

First off, the methodology helps a customer think big about what they can do, then helps them actually build a business plan internally to drive change and get the right business approvals to start changing. Then they proceed to solution execution that starts small – and builds a proof of concept.

How HPE and Deloitte
Align IT
With Business Strategies

In as little as eight weeks, we can deliver the value that can then be extrapolated across all of the retail sites. That’s what projects the true savings. That is the proper scale: To think big where you can, then start small, and lastly, scale fast across all of the sites.

Gardner: Kalyan, any more to offer on the importance of proper integration at a solutions level?

Garimella: Internet of Things (IoT) is such a complex ecosystem of technologies that you need subject matter experts from each of the technologies -- such as RFID, Bluetooth beacons, Wi-Fi, analytics, artificial intelligence (AI), your core enterprise resource planning (ERP) systems, the customer relationship management (CRM) systems, and the list goes on. 

That’s where we come in, with the right people, and with the vast resources that we have. That’s deep industry expertise. We come and we look at the problems, create the customer journey for our clients, and then create the right level of systems integration that can help achieve the business objective. 

Gardner: Let’s look at some examples. What are some of the ways that retailers are doing things right to improve on that all-important user experience?

Carlat: As a consumer, I know what I like -- and I know what I do not like. I have seen overly aggressive advertising, pushiness that repels me as much as waiting in a long line at a retail brick-and-mortar. There needs to be a correct balance, if you will, of suggestive selling, cross-selling, and upselling. But you have to have the right learning, the right analytics, to be right more times than you are wrong. It means providing a value versus becoming a pest. 

This new offering allows that balance to be made. Other best practices would be providing point notifications to issue a discount that would get me as a consumer over the buying hump, to say, “You know, that is a good deal. I cannot pass this up.” Then as a seller, I can naturally dovetail into increasing the basket size, cross-sell, and upsell.

Gardner: How can the brick-and-mortar company better extend itself beyond the threshold of the physical building into the lifestyle, the experience, and the needs of the consumer? 

Customized consumer choices

Garimella: You are talking about bringing the retailer into the houses of the customers. That is where the successful online retailers have been. We are working with our brick-and-mortar clients to create similar experiences. 

Some of the options to do that would be having a digital voice assistant included on your retailer or shopping app. You could add items to a wish list; you could look up those items and determine if they are close by and where is the retailer nearest to my house. Maybe I could go and check those out instead of waiting for a couple of days for them to be delivered.

We are talking about bringing the retailer into the houses of the customers. That is where the successful online retailers have been.

So those are some of the experiences that we are trying to create -- not just inside the brick-and-mortar store, but outside as well. 

Gardner: Jeff, tell us a bit more about the Connected Consumer for Retail. Where can we find out more information?

Carlat: We are rolling out this offering in Q1 2018. It is being delivered consultatively initially through Deloitte as the lead. We are happy to come in and do demos, as well as deliver proofs of concept. We are actually happy to help build a business model and conduct workshops to understand what is the best path for retailers to begin adopting the on-ramp to this digital transformation. 

The easiest way to get to us is via our websites at either HPE or at Deloitte. We have business leads in all regions, all parts of the world.

Gardner: We have talked mostly about brick-and-mortar retailers, but this applies to hospitality organizations, restaurants, and other consumer services. How should they too be thinking about the user experience and extending it to a life cycle and a lifestyle?

From pain to gain

Garimella: Wherever there’s a possibility of converting a pain point in a customer journey into an engagement point, I think IoT can definitely help. We are calling this the Connected Consumer for Retail for a reason. The same concepts and the same technologies that we have developed for the retail solution can be extended to hospitality, or travel, or food services, et cetera, et cetera.

For example, based on location and proximity of a user, you can create -- using the location-based services – improved experiences that cater to individuals in hospitality and hotels by giving them the right offers at the right time, thereby increasing the basket size in their respective industries.

Gardner: It seems that across these vertical industries we are at the threshold of something that had never been possible before.

Carlat: This is the beginning of a new era for retail. What is clear to me is those retailers that choose to adopt change are going to be the winners -- and more importantly those that do not choose to change are going to be the losers.

Deloitte and HPE Collaboration
Span 20 Years and 
Myriad IT Solutions

Garimella: I think Jeff hit it right on. Retail is changing and changing fast, and other industries will follow in the same suit as well. If you do not put enough emphasis on customer engagement, while also optimizing your operations, you are at risk.

Gardner: I’m afraid we’ll have to leave it there. We have been exploring how Deloitte and Hewlett Packard Enterprise are helping traditional retailers provide a more consistent, convenient and contiguous experience to end users. And we have learned how intelligence, edge computing and rethinking of that all-important user experience can come together to give retailers a potentially life-saving makeover.

So please join me in thanking our guests, Kalyan Garimella, IoT Manager at Deloitte Consulting. Thank you.

Garimella: Thank you.

Gardner: And we also have been here with Jeff Carlat, Senior Director of Technology Solutions at HPE. Thanks, Jeff.

Carlat: Thanks a lot.

Gardner: And a big thank you to our audience as well for joining us for this BriefingsDirect Voice of the Customer digital transformation success story. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored interviews.

Thanks again for listening. Please pass this content along to your IT community, and do come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how data-driven intelligence, edge computing, and rethinking of the user experience come together to give retailers a clear path to digital transformation. Copyright Interarbor Solutions, LLC, 2005-2018. All rights reserved.

You may also be interested in:

• As enterprises face mounting hybrid IT complexity, new management solutions beckon
• How VMware, HPE, and Telefonica together bring managed cloud services to a global audience
  
• How mounting complexity, multi-cloud sprawl, and need for maturity hinder hybrid IT's ability to grow and thrive 
• Get ready for the Post-Cloud World
• Inside story on HPC’s AI role in Bridges 'strategic reasoning' research at CMU
• Philips teams with HPE on ecosystem approach to improve healthcare informatics-driven outcome 
• Inside story: How Ormuco abstracts the concepts of private and public cloud across the globe
• How Nokia refactors the video delivery business with new time-managed IT financing models
• IoT capabilities open new doors for Miami telecoms platform provider Identidad IoT
• Inside story on developing the ultimate SDN-enabled hybrid cloud object storage environment 
• How IoT and OT collaborate to usher in the data-driven factory of the future