Amex CEO on how Covid-19 has accelerated consumer adoption of e-commerce

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American Express CEO Stephen Squeri claims that Covid-19 has accelerated consumers’ adoption of online shopping methods by three to five years, and it remains to be seen how many will switch back to bricks-and-mortar stores once the pandemic ends.

Squeri made his comments during the Dell Technologies World user and partner conference keynote, when the tech giant’s CEO, Michael Dell, quizzed him about the changes in consumer behaviour that American Express had noted since the pandemic began in spring 2020.

“It was unclear how the world was going to turn, it was unclear how consumers and small businesses and corporations would react and then things started to change,” said Squeri. “A lot of small businesses really began to pivot to take their businesses online, so you saw small businesses start to come back from a consumer perspective.

“Not a lot of people were flying, nobody was going on a cruise – but what we did see was people started shopping online.”

So much so that the amount of money spent by consumers online during the Christmas period was up 25% year on year, he said, which was significantly higher than any projections American Express had come up with in the run-up to the holiday season.

“E-commerce has been accelerated by probably three to five years,” said Squeri. “I don’t know how many people are ever going to go back into the grocery store as opposed to ordering online groceries.”

Squeri also shared details of the impact the pandemic has had on his firm’s digital transformation plans, including a revelation about how the company worked with Dell to ensure it had the technology needed to embrace remote working as stay-at-home orders came into effect across the world.

This work resulted in American Express managing to ensure that its entire 64,000-strong workforce had the PCs and peripherals needed to work remotely within just three weeks.

Elsewhere in the business, the company is in the midst of an upgrade of its many legacy systems, and making changes to ensure it is in the best possible position to make the most of the huge amounts of data its operations generate.

“When you look at American Express, we’re a card issuer, we’re an acquirer and we’re a network, so that means we have perfect data, but as you know, having data is one thing, but having information is something else,” said Squeri. “Data is nice – information is power.

“So we’ve been on this journey, utilising AI [artificial intelligence] and utilising machine learning to help make credit decisions, to help make fraud decisions, to anticipate for our card members what offers to give them.”

Post-pandemic IT landscape

The way that the pandemic has served to reshape and accelerate the pace of digital transformation in various industries was a recurring theme of discussion during the keynote, with Jeff Clarke, chief operating officer and vice chairman of Dell Technologies, sharing details of how Covid-19 has changed the tech giant’s own thinking on remote working.

“At Dell, we anticipate that more than 60% of our people will remain in hybrid and remote working situations, and we’re hearing the same for many of you,” he said. “Why? Because it’s good for your people and good for your company.”

For proof of that, Clarke pointed to the business productivity improvements that firms achieve when they allow their employees to “flip the narrative” on work-life balance. “As a company, we’re able to move faster, make decisions faster, respond to you faster and make changes faster inside the company, and open the aperture on talent without geographical limitations,” he said.

On the latter point, Clarke expanded on how the decision to embrace a hybrid working model, post-pandemic, means it can bolster the diversity of its workforce by enabling the company to tap talent in “under-represented populations and communities” around the world.

“Greater diversity means broader perspective – and a broader set of experiences that fuel innovation,” he added. “New skillsets are needed for cloud, edge and as-a-service [IT delivery models] and now recruiting and retaining talent from anywhere is possible. We can level the playing field for the opportunity and strength of our company.

“We believe the future is a hybrid workforce and a hybrid cloud for a hybrid world where digital transformation fosters human transformation, as we develop cultures that are more empathetic and patient to carry us through.”

The impact that mass remote working will have on the underlying infrastructure on which enterprises run their businesses was also touched upon during the Dell Technologies World keynote.

Following on from Squeri’s comments, Michael Dell said the data challenge that American Express is facing down is one that many enterprises are grappling with. This is because the locations where that data is generated, stored and will need to be processed are becoming increasing distributed.

“We’re in a ‘do anything from anywhere’ world,” he said. “We used to go to school, to work, to entertainment, to shop and to interact. Now things come to us wherever we are. This is how we’ll move forward, pulling through the silver linings of 2020 to show how we live, work and learn in 2021 and beyond. And technology is at the centre of everything.”

These trends have big implications for enterprise IT estates, particularly from a complexity point of view, as firms will need to figure out the best place to deploy workloads based on where their users are, said Dell. This means deciding whether it would be best to host them in an on-premise datacentre, an edge compute facility, a public cloud environment or a mix of those.

“Momentum is building towards a hybrid, distributed future fuelled by data analytics that are processed in real time, and to digital and secure processes, operations and business models,” he said. “And increasingly, in this ‘do anything from anywhere’ world, it’s a future that will unfold at the edge.

“While 10% of data is processed outside of the datacentre today, 75% of that data will be processed outside of a traditional datacentre or cloud by 2025.

“That data will be generated in the real world, at the edge, and to transform that data into outcomes will require real-time analytic and intelligence. In fact, it is estimated that more than $700bn in capital expenditure will be spent within the next decade on edge infrastructure.”

To help enterprises negotiate this shift, the company used the keynote to debut its Apex portfolio of “as-a-service” offerings that are designed to make it easier for enterprises to manage compute and storage resources across a multitude of different IT environments.

Four different products make up the Apex portfolio, with offerings available to help enterprises consume on-premise storage resources in an “as-a-service” way, while another element is designed to make workload management across multicloud environments easier.

Another flavour of Apex is geared towards enterprises that operate a more heterogenous IT environment that may require a more customised approach, which will enable users to create their own “as-a-service” model according to their needs.

Dell Technologies has also partnered with colocation giant Equinix to extend the reach of Apex to workloads that enterprises have outsourced to third-party sites.

“Today’s IT leaders are increasingly turning to as-a-service, and IDC predicts that by 2024, half of datacentre infrastructure will be consumed as-a-service,” said Matthew Eastwood, senior vice-president at IT market watcher IDC.

“Dell Technologies’ Apex is yet another example of Dell’s agility when addressing the needs of a transforming marketplace and is in tune with the way customers want to use, consume and simplify IT.”


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