Cloud Computing in the Retail Industry: Driving Efficiency and Growth

Having the right product is no longer enough to succeed in the retail industry. Modern customers expect the whole package: instant access to information across channels, fast product delivery, and recommendations that are actually useful. Cloud computing in retail provides the technological backbone necessary to meet these expectations.

Research from Mordor Intelligence shows that the retail cloud market size is currently valued at $57.38 billion and is forecast to reach $155.98 billion by 2030. This growth is largely driven by rising consumer demands and increasing competition among businesses striving to win them over. All this highlights the critical role of cloud technology in shaping the retail landscape.

In this article, we’ll break down the key benefits of cloud computing, along with some real-world examples. We’ll also introduce the ongoing development and future trends in the sector.

Key takeaways

• Cloud technology provides scalable access to computing power, enabling retail businesses to store and analyze massive volumes of both structured and unstructured data.
• Cloud computing in the retail sector serves as the foundation for integrating other technologies, including artificial intelligence (AI) and machine learning (ML), augmented and virtual reality (AR/VR), and the Internet of Things (IoT).
• By leveraging cloud computing, retailers can achieve significant cost savings, scale operations based on demand, expand into new markets, improve data security, and ensure regulatory compliance. 

Benefits of cloud computing in retail

With cloud computing, businesses can access cloud services, including remote servers, data storage, and networking, over the internet without having to purchase and manage physical infrastructure. Adopting cloud computing brings value to companies of all sizes. Knowing these use cases can help businesses understand how to incorporate cloud computing into their retail operations and streamline the digitalization process to achieve their goals. 

Solid foundation for innovation

Cloud computing is the cornerstone for innovation. Emerging technologies, such as AI/ML, AR/VR, and IoT, demand loads of computing power and storage—something that traditional IT setups simply can’t match. This means retailers basically can not keep up with tech advancements without adopting the cloud. In contrast, by combining cloud computing with other technologies, companies can achieve end-to-end process automation, seamless integration between systems, and powerful data analytics.

According to McKinsey, cloud adoption could unlock up to $3 trillion in global value by 2030, with $2.3 trillion stemming from innovation-driven growth, faster product development, and hyperscalability.

Examples:

• Zara, a global fashion brand, uses RFID technology integrated with cloud systems to track inventory at both the shelf level and in warehouses in real time.
• IKEA, a leading provider of ready-to-assemble furniture, uses AI-powered predictive analytics supported by cloud technology to forecast demand throughout regions, factoring in seasonal events and celebrations.

Support for the omnichannel retail strategy

Cloud computing in the retail sector is a foundational element of the omnichannel strategy, where customer and back-office operations are integrated across online and offline channels. 

This means customers can shop where it’s most convenient for them (in-store or online) and enjoy a consistent experience. For example, they can see what’s in stock online or in a selected store. The omnichannel approach also simplifies returns. Customers can purchase an item through an app and return it at a physical store. 

However, using cloud technology to support an omnichannel strategy helps not only customers but also retailers. It allows them to gather and analyze customer behavior data from all channels to improve marketing and offer better products.

Examples:

• Decathlon, a leading sporting goods retailer, created a cloud-based app that lets store staff complete sales on tablets, so customers don’t need to use the checkout.
• Nordstrom, a US-based luxury department store, allows customers to check in-store product availability, reserve items to try on in-store, and schedule personal shopping appointments through a dedicated cloud-based app.

Supply chain management visibility

On-premise systems are often fragmented and offer limited visibility into the supply chain. Implementing cloud computing in the retail business solves this issue by consolidating all data into a single place with real-time access. As a result, every stage of the process—from procurement and warehousing to logistics and order fulfillment—becomes transparent. 

When combined with AI and machine learning, retail cloud computing solutions can also further boost supply chain efficiency by analyzing the causes of delays, sales trends, and weather patterns. This often results in lower supply chain operating costs, faster product delivery times, and quicker responses to potential issues.

Examples:

• Volkswagen uses a cloud platform to unify data from all its 124 plants, 500 warehouses, and 1,500 suppliers, enabling better tracking of logistics and providing insights into shop-floor processes.
• With a fully outsourced supply chain, Nike uses cloud-based platforms to enable seamless collaboration between thousands of contractors and distribution centers globally.

Efficient inventory management

Cloud-based solutions enable retailers to centralize inventory data from multiple channels, including physical stores, warehouses, e-commerce sites, and shopping apps, making it accessible to all authorized employees. This supports real-time inventory tracking, allowing managers to monitor stock levels and make timely adjustments.

When integrated with advanced analytics tools, cloud systems also help businesses forecast demand so they can optimize inventory planning or redistribute stock across locations. This is especially valuable during seasonal peaks and holiday surges, when demand patterns shift rapidly and timely inventory decisions are critical.

Example:

• Walmart, a leading American hypermarket chain, combines AI-powered analytics and IoT sensors with cloud computing to track stock levels, forecast demand, and automate replenishment schedules.
• Shopify, a popular e-commerce platform, offers a cloud-based inventory management system integrated with point-of-sale (POS) tools, which allows retailers to track stock levels in both brick-and-mortar stores and online marketplaces.

Enhanced customer experience

By collecting and analyzing customer data, cloud platforms enable retailers to gain valuable insights into buyers’ interactions, highlighting areas where the shopping experience can be improved. Retail cloud computing solutions also provide the technological foundation needed to implement these enhancements.

For instance, retailers can use information on customer preferences to personalize offers and track behavior on e-commerce platforms to improve navigation. Additionally, cloud-based solutions support the integration of smart chatbots, which provide quick responses to customer queries and streamline the shopping journey.

Moreover, by accelerating back-office order fulfillment processes, cloud systems further contribute to higher customer satisfaction.

Example:

• Amazon’s recommendation engine, backed by its AWS cloud platform, personalizes the shopping experience for every customer. This reportedly drives over 35% of their online sales.
• Kroger, a US-based supermarket network, uses Google Cloud technologies and AI to gain insights into customer shopping patterns, in-store traffic, and incoming merchandise volume, all of which help deliver a unified customer experience.

Reduced IT expenses

On-premise IT systems require substantial upfront investments in servers, networking hardware, software licenses, and cooling solutions. As business needs grow, the infrastructure must also scale, leading to even higher operational costs over time.

In contrast, cloud providers typically offer their services based on a pay-as-you-go model, in which businesses are only billed for the resources they actually use. Moreover, by migrating to the cloud, retailers can reduce the need for in-house IT teams as providers handle software updates, database management, and security patches.

Examples:

• Wayfair, an American e-commerce home goods retailer, implemented a comprehensive cloud strategy, resulting in a 28% reduction in infrastructure costs.
• Zalora, a leading online fashion retailer, cut content delivery network costs by 49% after migrating to AWS.
• Carrefour, a French multinational retailer, reduced operating costs by 40% and energy consumption by 45% after migrating from on-premise infrastructure to Google Cloud Platform.

Seamless growth into the international markets 

Cloud computing enables retailers to expand more easily into new markets, including international ones. With a scalable infrastructure and centralized data management, retailers can deploy online stores quickly across multiple regions, scaling instantly to handle spikes in global traffic. 

Localization tools integrated into cloud platforms also simplify currency conversions, language adaptations, and region-specific compliance requirements.

Example:

• HelloFresh, a multinational meal-kit company, builds its infrastructure on AWS to scale operations globally, serving over 7.3 million customers across 18 countries. Despite high demand, the website and app remain stable and support advanced features like real-time tracking.

Stronger data and transaction security

Retailers handle transactional details, sensitive personal information, and confidential business data, which makes them a prime target for cyberattacks. The 2024 IBM Cost of a Data Breach report shows that the average cost of a security breach in retail is $3.91 million, 18% higher than the previous year. Besides, about 82% of security incidents in retail involve customer data breaches. 

Cloud computing systems help companies prevent most safety threats. Popular cloud service providers, such as AWS, Google Cloud, and Microsoft Azure, offer robust security measures, including role-based access controls, encryption, and tokenization. They also provide security automation, enabling retail businesses to automatically respond to suspicious triggers.

Examples:

• Schwarz Group partnered with Google’s cloud computing services to acquire client-side encryption of customer data and data centers that comply with EU laws. 
• Microsoft’s cloud-based fraud protection system helps retailers use adaptive AI to combat payment and discount fraud, account takeovers, and bots. Retailers, as well as e-commerce networks and banks, use it to keep transactions seamless while safeguarding their revenue.

Enhanced regulatory compliance

Top cloud providers hold compliance certifications, including ISO 27001, SOC 2, and PCI DSS, to ensure their services meet industry standards. They also have built-in functionality that aligns with global data protection and security best practices, like access logging, audit trails, data encryption, and change management protocols.

Moreover, cloud services often have tools for automated compliance checks. They can also alert IT personnel to accidents and issues, which is especially useful when sensitive data is stored in a region outside legal boundaries.

Example:

• Google Cloud Platform, AWS, and Microsoft Azure publish detailed information about their regulatory compliance certifications on their official websites. Retailers can review these resources to understand what each provider offers in terms of compliance support.

Efficient disaster recovery

Any downtime is a direct hit to both revenue and customer trust, whether caused by a hardware failure, natural disaster, or cyberattack. Cloud-based disaster recovery (DR) with automated backups and failover systems ensures that business-critical data remains protected and can be quickly restored with minimal loss.

What’s more, cloud-based DR is scalable. Retailers with operations in multiple regions can implement different recovery points and redundancy strategies based on local risk levels. 

Cloud computing in the retail sector allows businesses to test their cloud disaster recovery models more easily. For example, AWS Disaster Recovery and Azure Site Recovery offer simulations that let companies validate their backup plans.

Example:

• Asda uses a cloud-based backup and disaster recovery platform to back up digital systems in over 660 stores and 30 depots. It also uses self-service workflows that allow users to restore individual files. The company states that the systems cut the number of IT helpdesk requests in half.

Dynamic price management

Advanced analytical engines based on cloud technology can process vast amounts of data streams, including consumer demand signals, supply chain expenses, competitors’ offerings, and historical purchasing patterns. When combined with ML algorithms, the systems can recommend optimal pricing changes based on client segments, seasons, and geography. 

With cloud-based pricing tools, retailers can also automate pricing-related tasks. For example, they can automatically increase prices for high-demand items or reduce the cost of perishable goods approaching expiration. 

Examples:

• Amazon Marketplace, which is based on cloud infrastructure, analyzes millions of demand signals and competitors. It changes prices more than 2.5 million times daily.

Sustainability in retail operations

Cloud computing in the retail industry can help reduce the carbon footprint in multiple ways. Analytical systems help track, compare, and optimize operations with a lower environmental impact. For example, ML models can identify the most logistically efficient routes with the least carbon emissions. 

A report from Accenture suggests that cloud migration can reduce carbon emissions by 84% compared to conventional infrastructure. The 2023 AWS research also concludes that sustainability is a major driver for migration to cloud computing services.

Example:

• Nike uses cloud-based digital analytics tools, like inventory tracking and fulfillment automation, to reinforce sustainable (eco-friendly) practices. 
• Google’s Tensor Processing Units (TPUs) and cloud computing data centers, which various retailers use, are several times more energy-efficient than typical processors and data centers.

Future of cloud computing in the retail business: Trends and developments

Grand View Research projects that the global cloud market size will grow from $50.09 billion in 2023 to approximately $167.82 billion by 2030, at an 18.7% compound annual growth rate. The technology itself continues to evolve as cloud adoption grows.

Let’s see where cloud computing in retail is going and what it may look like in the following years: 

• Growing reliance on AI and ML. A 2024 survey by EY reveals that 76% of retailers use AI and ML solutions, which are almost always cloud-based, for supply chain operations, and 86% utilize them for automation in retail operations. 
• Integration of chatbots. Cloud computing in retail is the foundation for AI-powered chatbots, which increased retail traffic by 1,800% in 2024 (compared to the previous year).
• Incorporation of extended reality (XR) technologies. Cloud platforms also enable retailers to build scalable VR/AR solutions. In retail and e-commerce, these technologies are used for virtual try-ons, 3D property tours, and visual search. 
• The use of generative AI in commercial cloud solutions. According to Capgemini’s 2025 report, 71% of consumers in 2024 wanted GenAI to be integrated into their purchasing experiences for hyper-personalization. Over 75% are open to AI-based product recommendations, up from 63% in 2023.

Cloud computing—the invisible force behind retail’s success

The retail market is highly dynamic, driven by customer demand and rapid technological advancements. However, to support every innovation and leap forward, companies need secure, reliable, and scalable infrastructure—something cloud computing is uniquely positioned to provide.

At Neontri, we help retail businesses take their operations to the next level. Our team of seasoned experts specializes in deploying and optimizing cloud infrastructure across AWS, Microsoft Azure, and Google Cloud platforms. Whether you struggle with existing systems, seek better data security, or want to leverage AI for dynamic pricing and personalization, our consultants will help you define the best cloud solution tailored to your specific needs.

Schedule a cloud readiness assessment call with our technology specialists to identify transformation opportunities and create your custom cloud roadmap.

FAQ

How do big retailers like Macy’s and Walmart use cloud computing?

Macy’s and Walmart use cloud retail solutions for inventory management, custom analysis, omnichannel experiences, and collaboration between employees. Cloud-based analytics platforms also forecast demand based on historical data in online and offline channels, as well as global customer trends. These valuable insights are used to segment consumers, optimize recommendations, and improve marketing strategies.

Additionally, these retailers use cloud-enabled disaster management to prevent downtime and ensure continuous operations, improve data security, and enhance customer satisfaction via AI-based chatbots.