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Retailers are vital to the global economy. Retail is directly or indirectly responsible for 18% U.S. GDP and supports more than 41 million jobs in the United States alone.
That's why the monumental shifts facing the retail industry are so important to all of us. Never have we seen such dramatic and tectonic swings in consumer shopping behaviors, preferences and expectations, largely driven by new technologies and form factors. With consumers having increased options for how and when they shop, staying competitive has meant retailers must truly put customers at the heart of their business and seek new ways to create the most value, revenue and loyalty.
To adapt, retailers must deliver a modern sales and customer service experience that is personal, seamless and differentiated. And, they must operate with the utmost efficiency.
Increasingly, retailers are turning to the cloud to tackle these challenges. In the 2012 Gartner Annual CIO Survey, Tier 1 retail CIOs rated cloud computing as one of their top five technology priorities through 2015. 
Increased Agility. Retailers are using Office 365 to improve employee communications and collaboration, enabling them to move faster to share best practices, roll out promotions and launch new products. At BCBGMAXAZRIAGROUP, an Office 365-based system connects store managers and employees across over 45 countries, enabling the premier fashion house to roll out promotions and new products more quickly as well as move faster to replicate best practices across their network of stores.
Customer Feedback. One of the biggest challenges facing retailers historically has been getting feedback from store associates and customers back to HQ. By connecting HQ and stores with modern communications and social tools, retailers can more quickly and easily capture and act on customer feedback. At Red Robin, they were able to use Yammer, the leading enterprise social network and part of Office 365, to gather customer feedback and implement changes in just one month, a process that historically took a year or longer.
Reduced Costs. Customers cut cost by eliminating infrastructure, reducing travel costs and streamlining operations. At Helly Hansen, they expect to cut annual travel costs by 10-15% by using Office 365 to connect employees, conduct trainings and roll out the latest store promotions and display models.
Greater Flexibility. As retailers scale their workforce up or down based on seasonality, store openings and/or acquisition, Office 365 helps them grow flexibility by adding, removing or reassigning licenses quickly and easily. And, because it's based on familiar Office tools, employee training is reduced.
Office 365 has become the go-to choice of retailers for software-as-a-service. Six of the top 10 largest retailers in the US (according to the National Retail Federation) use Office 365. Our retail customers employ more than 8 million people, more than the total population of Hong Kong. This includes notable, global industry leaders such as Tesco, McDonalds, Starbucks, GAP, J.C. Penney, Helly Hansen, Lowe's, Coles, Hallmark, Lojas Renner and hundreds of other retailers.
Custom Fit. Any retailer can tell you that one size does not fit all. Office 365 is available in packages tailored to the needs of every type of user - from the board room to the stock room to the retail floor. Corporate workers can get the full Office experience, while task workers can get Office Web Apps from any device with a browser.
Modern Collaboration. Nearly 25% of retail and hospitality employees are between the ages of 16 and 24, and this generation is less likely to use e-mail than social networking or text to communicate. Tesco, the third largest retailer in the world, embraced this idea. The company experienced a cultural shift by implementing more flexible ways of working and offering younger employees the latest technology tools. With Office 365, employees are able to quickly access experts, information and tools to help them do their job regardless of location.
Office 365 for enterprises includes Yammer, the leading enterprise social network used in 85% of the Fortune 500. It delivers a familiar experience that encourages openness and sharing in a format that employees will embrace and use with minimal training.
Powerful Applications. Office 365 includes Lync Online and Skype for instant messaging, voice and video conferences; Outlook and Exchange Online for e-mail, calendaring, contacts and tasks; Yammer for social networking; SharePoint Online for a store portal and collaboration; and Office applications like Word, PowerPoint, Excel and OneNote. Separately, these applications are leaders in their categories. Together, they're the most complete productivity, communication and collaboration platform available.
Improved Security. By moving to Office 365, most customers increase their security and privacy. Office 365 provides advanced security, privacy and compliance controls, well beyond what any one firm can deliver on their own, all backed by Microsoft.
If you're a retailer on Office 365, we want to hear from you. How has Office 365 helped revolutionize your business, helped you think differently about engaging with your customers and helped you succeed and prosper. Visit the Office 365 Facebook page and tell us your story, or via Twitter at #Office365.
As the global economy emerges from the great recession, retail plays a critical role in driving global employment and growth. We're honored that so many leading retailers are choosing Office 365 in this time of reinvention.
--Tracy Issel, General Manager, Microsoft Worldwide Retail and Enterprise Solutions
 The 2013 report will be available for review at Gartner in January 2013.