March 15, 2022

Where Microsoft and Retail partners are headed 2022 and beyond

We kicked off this year doubling-down on Retail. With the recent launch of Microsoft Cloud for Retail and a focus on helping retailers move to a digital-first economy, we have invested in resources to help partners grow into the expanding Retail market opportunity.

As we continue to invest in Industry Clouds as a launchpad to greater industry-specific partner innovation, we are striving to understand what you, our partners, need to deliver value, create tightly tailored solutions, and strengthen last-mile industry execution.

My passion is for partners and, as the leader of Microsoft’s Global Partner Solutions team in the US, it is critical that I deeply understand your challenges and work with you to find solutions. That’s why my team and I have planned a series of listening sessions where I meet with partners to discuss their experiences working with Microsoft and the Microsoft ecosystem. These listening sessions are invaluable, helping us understand what we need to continue doing and what we need to change in order to be the best technology company partner, for our partners.

Earlier this year, as part of my listening strategy, I hosted a roundtable for a cross-section of our Retail partners, and I would like to share with you what I learned and highlight some of the trends we discussed that underscore the retail cloud opportunity in 2022 and beyond.

Key takeaways from Retail partner roundtable

During our recent Retail partner roundtable, I was joined by O9 Solutions, Amperity, Theatro, NCR, Flintfox, and Bamboo Rose. During this roundtable, I had the privilege of learning directly from these partners about what they felt was going well in their relationship with Microsoft, where they encountered friction, and where they saw the opportunities and challenges within the Retail industry.

One of the biggest themes was around ideas for further improving our co-sell motions. This included identifying ways to improve tooling to streamline, sharing of customer deal details to identifying signals to help sellers and partners more naturally come together to explore opportunities.

What was very clear is that the co-sell motion is gaining momentum. It’s been great for initiating conversation and presenting new opportunities for both partners and Microsoft to do more together – but there is always room for improvement! We recognize that some partners have felt the growing pains of change. Making sure our partners and customers feel supported means improving our go-to-market approach together. We’re working with the help of our partners to get our Microsoft field team pivoting around our partner solutions so that the solutions we drive are the very best options for our customers – our highest shared goal.

I was encouraged to hear from these Retail partners that they feel they have good access to Microsoft and industry leadership. This is the foundation of our success together and a critical element in our shared mission to lead the retail industry toward digital transformation. Meeting with these partners reinforced for me the incredible experience and expertise within the Microsoft partner ecosystem. This was clearly on display as the participating partners touched on many of the trends being forecasted by Retail industry experts. The following are just a few of these trends.

Retail technology trends to watch for

Challenges for this sector have created uncertainty, but with uncertainty comes great opportunity. Retail industry trends point to sustainable opportunity for cloud growth and, by extension, growth opportunities for partners poised to engage side by side with Microsoft.

In response to significant and abrupt changes in the retail landscape since early 2020, organizations have accelerated their investments in digital, with more than half the global economy now based on or influenced by digital¹. As the U.S. and other global economies emerge from the constraints of the pandemic, increases in inventory and deferred demand are expected to drive above-trend growth.²^,3

Retailers who were able to weather the storm now face continued pressure to digitally transform to meet the demands of today’s consumers. Same-day delivery, even for an added fee, and easy and instant product returns will be key differentiators for retailers in 2022^4,5. Retailers will also invest in technologies to efficiently process, refurbish, and restock that inventory⁴.

Whether operating brick-and-mortar shops, digital storefronts, or a hybrid of both, experience and expedience will dominate retail success,⁶ and data will continue to be the key. In fact, more data will be generated in the next three years than in the past 30⁷. Zero and first-party customer data will be mission-critical for marketers in 2022,⁴driving retailers to invest in solutions that can unify customer data across sources.

In the next year, businesses will increasingly redesign their operations into a seamless, interconnected operational fabric that encompasses front- and back-office functions, leveraging their ERP systems as the data and transactional hub of their industry-based ecosystem.⁸ Investments in supply chain automation to overcome chronic worker shortages and order management software will be an area of focus to boost productivity, inventory velocity, and customer experience⁹.

Industry clouds, like Microsoft Cloud for Retail, will be a differentiator for businesses taking the next step in their digital transformation. According to Lee Sustar, principal analyst, and Lauren Nelson, vice president and research director at Forrester, cloud buyers will be drawn to industry-specific clouds that “[deliver] compliance while enabling application developers to do their jobs faster and better in their specific vertical.”

Microsoft Cloud for Retail is a launchpad for partner growth

With these challenges and trends in mind, we have accelerated our efforts to support and co-innovate with our customers and partners, both in the present and in the long term. Microsoft Cloud for Retail embodies that evolution and provides an advantageous launchpad for further innovation.

By bringing together disparate data sources across the retail value chain, Microsoft Cloud for Retail enables retailers to realize the true value of their data by enriching core business processes and turning data into actionable insights. It is modular and deployable both in end-to-end scenarios like curbside pickup or standalone composable services like recommendations. All of this is built on one unified data platform with industry-leading AI to reason over that data and drive more meaningful insights.

There are limitless opportunities for our partner ecosystem to extend the value of the platform with industry specific solutions to address the industry’s most urgent challenges and help retail organizations future proof for what’s next.

Similarly, there are limitless ways for Microsoft Retail partners to align and scale, build, enrich and unlock opportunities for growth with Microsoft Cloud for Retail. The opportunities are strong as evidenced by the latest IHL Group study highlighting which solution providers retailers will be increasing their IT spend with this year. Microsoft tops the list with 48% of retailers surveyed indicating they will increase their spend with us, greatly exceeding the next highest vendor in the survey. Our growing partner solutions make this possible!

Vendors Increasing Market Share for 2022 — % of Retailers Increasing Spend with Vendor: 1) Microsoft – 48% 2) Google – 40% 3) Amazon – 30% 4) Oracle – 29% 5) Cisco – 26% 6) Salesforce – 25% 7) Zebra – 25% 8) HP – 23% 9) NCR – 20%

Looking forward

As we forge ahead on this exciting journey of helping our shared retail customers digitally transform, I want to thank partners like O9 Solutions, Amperity, Theatro, NCR, Flintfox, and Bamboo Rose who took the time to help me and my team understand and feed knowledge back into Microsoft.

Microsoft is on a never-ending journey to become the technology company with the greatest partner experience and the best value for customers. Learn how to deepen your engagement with us and how to build your Retail practice with Microsoft Cloud for Retail.