Retailers need to ensure that their ecommerce offerings are resilient enough to compete in todays cut-throat retail environment.
With ecommerce continually experiencing rapid growth as connected customers shop over various channels and devices, at a time that suits them, retailers need to ensure that their online offerings are agile enough to deliver on promises made to a new age of ever-demanding customers. Never is this truer than during peak trading periods.
The retail calendar is full of spikes, such as, Black Friday, Christmas, January sales, Valentine’s Day, Easter, Hallowe’en, Golden Week, Singles Day, just to name a few. Yet, too often, simply surviving the next peak trading day dominates ecommerce leader’s strategy plans. Focus is wrongly centred around survival, and avoiding headlines like those suffered by Dell and Macy’s in November 2016, when attention should be switched to how the retailer can adapt accordingly during these times of high demand.
Indeed, survival is crucial; not least because website crashes during high demand periods result in lost sales, but also because any delays will frustrate customers and incite disloyalty. Disappointed customers are also a threat to brand advocacy as many consumers use social media to vent about negative experiences online.
In order to provide customers with an optimum experience online during these busy peaks, retailers need to ensure they can be resilient at scale, are flexible for the future, and can provide a differentiation of customer experience compared to that of their competitors.
These seasonal peaks in trading are not a surprise to retailers, so why can’t so many businesses cope with the demands and why do we still see retailers fail to deliver on promises year after year?
The answer lies in the fact that so many retailers automatically think they need to scale up, when, in fact, a blanket approach to scaling up is often inflexible and inefficient. For example, more processing power for transaction processes means waste and redundancy in other areas such as browse, discounts and ‘my account’ functionality.
Instead, retailers need to scale out using an alternative architecture approach to what is traditionally implemented. Cloud computing allows for a very different approach to the design, development, operation and maintenance of software. Traditionally, retailer’s software is monolithic – server-first focused – which is limited and restrictive and even when vendors port solutions to the cloud, the core architecture often remains monolithic.
However, with cloud based software retailers are able to incorporate a microservice architecture which allows the company to break down the ecommerce business domain into sizable and manageable services. As a result, services can be resourced and scaled independently of each other, and scaled out – rather than up.
This enables the business to have numerous smaller services being scaled out in response to demand, rather than scaling up fewer services which affect the entire edifice. Cloud-first thinking gives ecommerce companies the agility to cost-effectively scale – up, down or out – at a service geography level, well beyond the limits of traditional, monolithic, server-first architecture.
Why is agility so important in retail?
The pace of change is accelerating in the retail industry and ecommerce continues to grow both in size and importance as customers are becoming more confident and cross-channel savvy. As a result, consumers are demanding greater capabilities from features and better services both online and in stores.
This is having a knock on effect to shopper behaviour. Trends such as ‘showrooming’ – where a customer will use the physical store to research products before buying online at the cheapest price advertised – are growing in popularity, meaning a strong ecommerce presence is even more important than the visible, online revenue it generates.
In response to these shifts in shopping behaviour, companies need to be agile and in a prime position to react to the demands and needs of their customers.
But many large retailers find they are restricted when it comes to reacting to change due to existing legacy systems. For example, traditional, enterprise-grade ecommerce platforms often rely on a code-base written, in the pre-cloud era, for a single, monolithic installation. In addition, retailers who are tied to such systems are unable to make small tweaks to the architecture as even the smallest change can require an update to the entire code-base and the associated downtime of a complete redeployment.
In an ideal situation, retailers should be able to run separate markets within their architecture individually, to accommodate the maturity or speed of growth needed for each, independently. These markets will still benefit from sharing the same underlying infrastructure but can run in the most efficient way possible, suited to specific requirements, without affecting other markets – no matter whether these are based on- or off-line.
Leaving behind the legacy
In a retail era where agility and flexibility is vital to survive, retailers need to seriously consider moving systems towards a cloud-based approach in order to thrive. Cloud-first thinking gives ecommerce firms the flexibility to delight customers with great services and consistent performance, wherever they are. It delivers agility beyond the capabilities of traditional, monolithic, server-first architecture while also reducing the risk of change.
For a retailer to be truly successful in this competitive landscape, they need to differentiate the online experience they provide and own their advantage in the ecosystem.
Retailers need to be able to confidently answer the following questions: what do you offer that your competitors don’t in terms of customer experience online? What advantage do you hold over your competitors? How and why do you stand out in this competitive ecosystem?
One area that many leading and agile retailers are driving forwards is real-time customisation. By personalising the customer experience, based on contextual data provided through historic transactions or visits, retailers are able to tailor the shopper’s experience to match their likes and interests, thus maximising the chances of the shopper making a purchase.
But to achieve this, retailers must be able to adapt quickly to trends in shopper behaviour, and respond proactively to data insights provided. And for many enterprise retailers pre-existing legacy systems means that IT teams are unable to consider this as they are solely focused on surviving the next trading peak.
The answer to greater capacity and higher availability is no longer to continually scale up, but rather to scale out with more, smaller servers deployed where they are required. It delivers an agility that is impossible under a monolithic design and allows the server to be as close to the customer as possible in order to enhance their experience.
Critically, cloud-first enables differentiation of the customer experience. When all other ecommerce sites look the same, and when you can no longer compete purely on price or logistics, it is vital that you own the customer experience, on your own terms.