The sheer scale of Microsoft’s omnipresent influence and cross-sector services make the company’s footprint in the retail industry a given.
Its broad range of solutions includes cloud-based systems, cybersecurity tools, desktop and server management solutions, and device productivity applications.
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This range allows Microsoft to strike frequent deals and partnerships with retailers across the world, such as Walmart, Kroger and Gap. Its most recent deal was with Sainsbury’s, which enlisted Microsoft to drive greater efficiency through the use of AI and machine learning tools.
The company’s solutions are often only identifiable within the back-end of retail operations, making Microsoft a nebulous but influential force within the retail industry.
At Cegid Connections Retail 2024, an event hosted in Rome, Italy by cloud-based business management solutions provider Cegid, Microsoft representatives were invited to showcase how the company assists retailers with everything from supply chain management to cybersecurity.
Cegid and Microsoft’s strategic partnership covers AI co-innovation, a governance framework, technical cloud adoption and migration services, and cloud infrastructure.
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By GlobalDataHelping retailers navigate a competitive environment
During a plenary session at Cegid Connections, Microsoft EMEA [Europe, the Middle East and Africa] managing director Howe Gu acknowledged the myriad of issues that modern retailers face, noting “significant technological disruption, macroeconomic volatility, geopolitical uncertainty, supply chain disturbance and consumerisation [the impact that consumer-originated tech has on enterprises].”
Keeping across these issues, Microsoft closely monitors the market and supplies its retail customers with demand forecasting.
Using the Azure cloud computing platform, which is customisable by the retail industry, a summary of historical transactions can be analysed using machine learning to produce forecasting reports for retailers.
As Gu pointed out, this is “crucial” for retail supply chains, as “some of our customers still struggle to ensure they can put the right products on the right shelves.”
Credit: Microsoft
Forecasting is one key way that Microsoft helps retailers stay ahead of the curve. But if this technology sounds daunting to understand, the company also provides consulting services and guidance for the industry.
In early 2024, Microsoft launched the Retail Cloud Alliance, an initiative aimed at educating and empowering retailers of every size to leverage cloud technology effectively.
Gu emphasised that the company’s key approach with customers is focusing on trust and diversification as “over the last 18 to 20 months, we’ve noticed a real shift in terms of the pace at which retailers are requiring advanced solutions.”
Responsible AI investments
A key advanced solution for the retail industry that Microsoft provides is AI. CoPilot is the company’s generative AI chatbot which can be built into existing Microsoft tools for productivity and streamlined operations.
Using Azure OpenAI, businesses can build applications and websites, launch marketing campaigns and consolidate relevant data. The company’s goal is to make the technology more accessible to retailers of any size.”
But before retailers cave to pressure and jump onto the “jagged frontier of AI” an ethical approach with proper planning is essential to see long-term benefits, as Gu cautioned.
He emphasised that using technology to improve customer experiences should be front of mind in any AI investment.
He praised L’Oréal Paris’s Beauty Genius tool, which provides consumers with personalised diagnostics based on their inputs for skincare, makeup and hair colour products.
“It’s about making sure the regulators, our peers in the retail industry, customers and partners are all working together to assess ethical responsibility with AI and make sure that solutions are trusted.”
This trust is at odds with the immense resources that AI technology consumes, adding to retailers’ already harmful environmental footprints.
Gu concluded that “it’s important that humanity remains at the heart of AI. We must think about our responsibility to communities and whether we’re using the technology for the right things.”
Cegid representatives echoed this, telling retailers that even if they refrain from adopting AI, they will still face an environment and consumers that do.
The forefront of retail cybersecurity
Research from Cegid and Microsoft finds that the rate of cyberattacks in the retail sector is 77%, compared to 66% for all other sectors combined.
Microsoft itself is of course a top target for cybercriminals. Its 49-year history of combatting these threats means it has developed leading cybersecurity tools that retailers can deploy for safer operations.
Microsoft partner technology strategist Olivier Leger emphasised this: “Our huge footprint allows us to handle threats at scale. We spend $1bn each year on cybersecurity.”
If a retailer uses a device secured by Microsoft, it is part of a global network of 135m managed devices.
This means reaping the daily benefits of 65tn signals being synthesised, the removal of 100,000 domains, the tracing of threat actors and the 4,000 identity attacks that are blocked per second.
The Microsoft Digital Crimes Unit (DCU) is on hand as an international team of technical, legal and business experts working to combat areas of cybercrime such as malware, ransomware and payment disruption.
Shared passwords – the first line of attack for cybercriminals
These issues can damage the reputation of retailers if customer data is compromised, alongside productivity losses that can be catastrophic to bottom lines.
According to Leger, “we see small retailers as the number one target of attackers. This is mainly because they don’t have the same security span as big companies.”
Retailers must therefore invest in cybersecurity tools no matter their operational size. Some simple steps they can take are enabling multifactor authentication, using different accounts for different operational areas, such as on payment tills, and refraining from using shared passwords as this is the first entry door for cyberattacks.
Leger also highlighted the need for both technical and non-technical stakeholders in the retail industry to be involved in cybersecurity efforts.
Microsoft Cloud for Retail offers a suite of sector-specific solutions using capabilities from Microsoft Dynamics 365, Microsoft 365, Microsoft Azure and Microsoft Fabric to unify data and empower staff members.
When a retailer chooses Microsoft’s tools, they avoid the risk of having separate hyperspecialised solutions that present vulnerabilities through data transfers.
Another result of safe digital operations is improved staff retention, as the stress caused by the fallout of cyberattacks is circumvented.
A business continuity plan for retailers wanting to secure their digital operations should cover the protection of consumer data, complying with General Data Protection Regulations, guarding online and in-person transactions, and overseeing identity management for employees.
As Leger pointed out: “Ten years in tech is 1000 in real life. Some retailers think cybersecurity investments are too pricey [so] it’s like trying to sell insurance. You only see the value when you’re hit.”
Microsoft’s emphasis on trust across its services has worked in building an enduring relationship with the global retail industry which now looks to the company as a leading problem-solver.
