Four Reasons SD-WAN Helps Retailers Save Money – Now and in the Future

Four Reasons SD-WAN Helps Retailers Save Money – Now and in the Future

May 23rd, 2021 - Payments, POS

By John Tait, Global Managing Director, TNS Payments Market

Here’s a question: If a retail business owner is trying to save money, what should they do?

Some say there is no such thing as a dumb question, but that one might be — because there is no “if” about it. That is, there’s never a time when a merchant is not looking to save money, and 2021 is certainly no exception. In fact, most retailers are looking for any way they can to cut costs and repair pandemic-related hits to the bottom line.

But the usual go-to solutions might not work: KPMG reported retailers across the globe are no longer able to rely on conventional forms of cost-cutting to shore up margins and rebuild after the pandemic year, stating they “will need to go further if they hope to return their business to profitable growth in the years ahead.” KPMG predicts, instead, retailers will focus on smart investments that improve their businesses for the years ahead.

That makes right now a good time to evaluate the backbone that holds a retail operation together: network connectivity. Retail operations still using legacy infrastructure now have a better option: software-defined wide-area networks (SD-WAN).

SD-WAN can reduce costs by providing dynamic, multi-point connectivity using distributed, private data traffic exchange and control points via standard internet connections. SD-WAN secures direct access to the cloud and internet while also providing local access for store employees and other users, whether they’re accessing network-based or cloud services. Plus, some SD-WAN solutions allow a retailer to pass the costs of security, compliance, and vendor management onto the service provider.

SD-WAN can help a retailer save on both direct and indirect costs — while boosting the value of a business — for four key reasons:

Bandwidth needs are increasing all the time: Retailers are adding more connected devices to branches, which can strain legacy networks’ capacity and slow speeds. But legacy networks like Multiprotocol Label Switching (MPLS) have fixed levels of bandwidth, and increasing bandwidth means increased costs.

SD-WAN allows retailers to add high-bandwidth connection types; it sits atop a connectivity layer (broadband, LTE, MPLS, etc.) and automatically and intelligently manages data and traffic on a network, even for multiple types of connections. That allows retailers to use broadband for bandwidth-heavy, non-business-critical applications, like live video streaming, and another connection for critical applications like payments, without paying more to increase bandwidth.

Payments data security remains paramount: Retail consistently ranks as one of the sectors most vulnerable to cyberattacks and hacks; as I told Inside Retail, cyber criminals know payments data is where the money is. That makes it critical to have a secure network on which this sensitive data travels. Because SD-WAN uses IPSec tunneling, the connectivity layer is only for transport; data on the network travels from site to site, or from device to device, fully encrypted.

Some SD-WAN solutions offer secure connectivity through features such as anti-virus protection with anti-malware and spyware; URL filtering and TLS packet inspection; dynamic policy management; and regular firmware updates. (As a bonus for retailers, TNS’ Secure SD-WAN is also PCI DSS compliant.) Choosing an SD-WAN that offers such security protocols can help retailers save money that they might otherwise spend on ancillary network security measures.

Flexibility and scalability mean business agility: If 2020 was the year of the pandemic-driven pivot, then 2021 will be the year in which retailers refine their approaches based on lessons learned. Many retailers realized the value of being agile enough to quickly adapt to changing circumstances, and SD-WAN brings those characteristics to a network infrastructure. It can be deployed using any number of different connectivity types and legacy infrastructures while orchestrating the various elements to ensure reliability.

It’s also scalable; once the initial implementation is deployed, new sites can be connected and brought online relatively quickly. This gives retailers the flexibility to test new sites as pop-ups or short-term rentals to gauge foot traffic and business volume — without signing long-term leases that might not pay off.

Retailers have better things to focus on — their business: SD-WAN offers centralized control and automated management functions, reducing the amount of heavy lifting from IT teams to deploy and maintain the network. A managed-services SD-WAN solution takes this a step further; all implementation and management is outsourced to a third-party expert, which improves service delivery and quality of services, while taking the onus of network management off a retailer’s internal IT team completely. This frees up IT’s time, allowing them to focus on functions more relevant to a retailer’s business, such as website/eCommerce platform maintenance — which yields cost savings in the form of greater productivity.

John Tait is Global Managing Director of TNS’ Payments Market business. He is responsible for identifying and driving growth across the Americas, Europe and Asia Pacific regions, and is focused on meeting the unique requirements of TNS’ customers.

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