The expectations for customer service in retail have increased a great deal. Retailers must now meet the constantly changing demand through sophisticated technologies such as IoT and edge computing. It is these technologies which are best placed to enable retailers to meet customers’ demands. For some in the retail sector, investing in edge computing, in particular, has become a necessity. This article takes a closer look into what is involved.
Technology and ever-evolving shifts in the modern consumer market have completely changed the world of retail and the processes that comprise it, and this change is still progressing rapidly. It is important to note at this point that as value shifts from tangible to experiential products, the transformation of retail infrastructure tends to be more holistic, with an emphasis on delivering superior, faultless, and effortless experiences that customers expect. Thus, customer experience is imperative in today’s competitive business world.
Previously, most retailers gauged their success purely on revenue and profit margins. In this digital era, it is crucial to pay attention to deeply ingrained customer engagement at all stages of the customer journey. Retailers, as well as consumers, expect frictionless personal interactions across all channels. Such expectations require a fundamental shift in business models. This shift is structural in nature, where focus is placed on an organization’s ability to facilitate omnichannel services, provide personalized offers, and execute transactions with minimal friction.
In today’s hyper-competitive landscape, consumer loyalty is no longer earned merely because of brand value. Now it is a sum of the total shopping experience. It implies that each and every interaction with the retail ecosystem, be it a website or a physical store, must cater to the needs of today’s customers.
One of the main issues facing retailers today is the enhancement of customer experience while dealing with poor IT infrastructure. The existence of legacy systems, data silos, and a non-flexible architecture stifle innovation and slow down the ability to respond to changing consumer needs. In addition, the complexity of omnichannel business processes makes it all the more necessary to have a scalable and integrated infrastructure.
Legacy systems are those built often over the course of many years or even decades. These systems were built to serve a different time, making functionalities far outdated. Today's dynamic shift in the retail environment is difficult to achieve due to data silos, software, and application disintegration along with inadequate structures. Retailers are unable to respond to new market conditions within an agile timeframe because of these barriers.
An increase in e-commerce has resulted in massive digitalization, spurring innovation in retail. Some retailers have gone out of business because of their inability to comprehend their customers' purchasing habits. Some retailers claim that competing against online behemoths is simply impossible.
A significant part of the business from ‘brick and mortar’ retailers has shifted towards online retailers. The movement from physical purchasing to online shopping shows how these businesses have stagnated in innovation. Many retailers still use the same technology as a decade ago or more: point-of-sale (PoS) systems, servers, and external storage. While practical, this approach is often inefficient, sluggish, and insecure. More competitive retailers have modernized by digitizing security appliances, deploying in-store digital advertising, offering free customer Wi-Fi, but none has come close to the virtual storefront’s flexibility.
In response to these challenges, infrastructure development is often characterized by innovation in the retail sector, specifically when it comes to technology deployment. For example, the increasing use of IoT devices in shops is creating opportunities for improving inventory and supply chain management. Their successful implementation can increase productivity while minimizing costs. Retailers can now utilize big data technologies, too. Advanced analytics, artificial intelligence, and machine learning are all at the disposal of retailers, typically allowing better decision-making and personalization of services.
IT infrastructure for a store must be straightforward, adaptable, expandable, and secure. An effective infrastructure enables in-store innovation and implements applications that capture customer data today and enhance the customer experience tomorrow. The contemporary retail environment will be aided by technologies such as edge computing and IoT. Retailers need to innovate to provide expected value and survive in today’s competitive environment.
Every organization utilizes edge computing differently. However, what edge computing in retail always has in common - regardless of the scenario - is that it involves moving computing power from the data center to the organization’s premises or to the periphery, where data usage occurs.
Businesses in retail are adopting emerging technologies and edge computing to transform both infrastructure and operational processes due to increased performance, reliability, flexibility, and security. It reduces latency, bandwidth, and connectivity issues that traditional infrastructure poses.
Incorporating virtualization, edge computing further adds to the argument. For example, hyperconverged infrastructure (HCI) allows businesses to consolidate multiple servers into a single box for easy use, allowing businesses to reduce expenses by hosting multiple applications on a single piece of hardware.
The dramatic increase in the use of IoT devices along with sensors and cameras in retail stores has resulted in a surge in the amount of data being generated. It is usually much more economically viable to store and process this data locally rather than routing it elsewhere. Doing so can hinder the response time for other key systems, such as transaction processing systems, and it also comes with an attendant business cost.
Edge computing makes it easier for organizations to implement strategies that enhance response time, data transfer speed, IoT management, and content caching. Edge computing reduces the power that a centralized system has over an organization, and adds greater flexibility and automation at a competitive price.
In the past, all data processing work was conducted in a specific location, and users had to access the system using terminals. The need for greater centralization stemmed from hubs connected by switches or routers. This architecture is limited in terms of responsiveness and scalability, which is something edge computing aims to tackle.
The introduction of client-server architecture marked the beginning of more distributed forms of computing. The addition of machines alongside server systems improved scalability, response time, and the volume of transactions. However, most of the processing still happens in centralized data centers.
The emergence of IoT devices increased the amount of data being processed at different locations. Traditional cloud computing had issues adapting to the ever-increasing volume of requests from these devices. Certain applications like real-time analytics also found it hard to operate due to the requirement of extremely low latencies for processing. The necessity to decrease latency for the processing of data led to the need for decentralized computing models which enables the processing of data as close to the source as possible. Instead of sending all data to a centralized cloud server, data is processed at edge devices or in local data centers.
With the popularity of edge computing, industry stakeholders began defining architectures and protocols to achieve design goals and ensure ease of adoption. Many organizations and consortia have worked to define edge computing standards.
Although the cloud possesses remarkable attributes like scalability, flexibility, and cost-effectiveness, its adoption concerning the peculiarities of retail infrastructure requires thorough consideration, especially integration as well as deployment. Retail, like many other industries, has moved towards the cloud but is facing difficulties that call for more scrutiny.
Expenditure
Working with the cloud for years leads to increased costs, especially for businesses that previously found these services essential to their operation. What used to be appealing is now too expensive. It turns out that TCO, in many cases, is much more favorable when computing resources are deployed on premises.
Integration Complexities
These days, retail operations are some of the most sophisticated, featuring a large number of systems, applications, and processes that need to work together in a seamless manner. Integrating such systems into the cloud requires huge amounts of reconfiguration, data migration, and integration activities, which can be extremely complicated. Add to this the possibility of having many legacy systems that may not connect with cloud platforms, which increases the chances of disruption to ongoing operations, service delivery, and support.
Data Overloads
The ever-increasing number of devices generates enormous amounts of data in the processing of which lies value. Transferring all the collected and analyzed data to a cloud, whether it is private or public, is not practical from a bandwidth point of view. Further, the majority of the data created at a specific edge location is relevant solely to that area. There is very often a need for real-time analytics at the edge. Consequently, there has been a notable increase in data processing and analysis locally and on-premises instead of in a centralized location which demands significant processing resources.
Dependability and Delays
In retail, every second matters, especially for online sales and PoS systems where there is a possibility of losing sales and leaving customers unsatisfied due to delays. Though cloud providers have a strong infrastructure with high availability guarantees, there is apprehension regarding the reliability of the internet connection and the latency of the cloud-based application. Retailers operating in areas with low-quality internet infrastructure or those that require real-time processing for applications sensitive to latency may find the cloud contributes unacceptable risks to their business operations.
Security Matters
Cloud services present complex national security as well as reputational risks for retailers. Retailers manage substantial quantities of sensitive customer data, including financial, personal, and purchasing details. Reliance on third-party cloud service providers increases security and compliance risks. Some regulatory frameworks mandate precise control over data storage, access, and processing which is difficult if not impossible to achieve in a cloud environment with multiple servers and jurisdictions.
With edge computing, retailers can significantly reduce system downtime, improve efficiencies, heighten customer experience, and critically manage information flow essential for business operations considering the fact that contemporary customers are sophisticated and short on time. The advantages of edge computing include:
Note, too, that the design of software applications within retail has traditionally been very functional, resulting in the creation of large monolithic applications (warehouse management systems, scanning applications, pricing applications, etc.). These systems tend to be integrated with one another using point-to-point connections which are interfaces in which one system links directly to another. The limitations of these configurations make it difficult and slow for retailers to react and adapt to the fast-changing digital-physical world. Retailers should be ready to implement new and flexible systems to improve customer service.
The role of the retailer’s innovative retail application cannot be neglected in the competitive retail market. Those who do not come up with innovations are at risk of serious challenges or even worse. A large number of established retailers have already died largely due to the lack of flexible, diastatic, old-fashioned retail applications.
These systems have, by nature, not been very well designed to respond to changing market and business conditions and these situations greatly impede business response. On the other hand, progressive retailers know that innovative applications that are adaptable and flexible are very important. Those applications which are mobile and flexible will be the premier driver of customer data and in turn, enhanced customer experience.
Software applications can be categorized into two major parts. The operational applications include all relevant applications pertaining to the daily activities of retail business. Such applications perform functions such as charging software which is done manually, as well as product tag generation. These applications push information about the price and weight of the goods for the scales, assist in the inventory control, safeguard the system of the store or stores.
Store operational software also covers energy management applications in physical (brick-and-mortar) stores. Because many stores still use standard heating and cooling systems, the many operational applications perform the function of software used to control energy usage. At the same time, as energy use, loss prevention, and security become more important in retail businesses, such software has become more important to help solve these issues.
With the growing number of IoT devices in shops, there is an augmented risk of security breaches. Retailers need to be more concerned about these potential risks. After all, in retail environments, protecting sensitive information and tight security measures are fundamental to avoid risks from cyber threats and maintain the business integrity of retail operations.
The second category of software applications includes tactical and/or analytical applications that enhance customer intelligence. These applications help in data analysis, extraction of insightful information, and strategic decision-making for the retail business. Unlike operational applications dealing with daily efficiency, strategic applications focus on wider business goals.
Business intelligence (BI), predictive analytics, customer relationship management (CRM), and enterprise resource planning (ERP) applications are parts of strategic applications. These tools collect data from sales and customer transactions, marketing activities, and business performance measures to provide needed information to retailers.
Today's retailers need to cope with customers' ever-changing behavior due to increasing smartphone use by shoppers who browse products in-store before ordering online. Retailers are employing advanced applications to allow seamless transitions between offline and online shopping.
Location-based beacon technology uses sensors to monitor customer movement and offers recommendations to improve store design and ambiance. It can facilitate real-time personalized recommendations and promotions.
Technologies such as AR/VR enable retailers to offer enhanced experiences in-store. This is especially so in apparel shopping environments where virtually trying something on can transform the customer experience. What’s more, retailers can augment such experiences by allowing consumers to make shopping lists at home and employing guidance for locating items in-store. Combined with checkout technologies, retailers can obtain information on how customers shop for future marketing efforts.
These applications represent a single interconnected system oriented around the consumer. Innovative retailers optimize pricing, discover growth potential, unlock deeper insights, and meaningfully engage with consumers by harnessing customer data.
Hyperconverged infrastructure (HCI) can be comprehensively deployed at a much quicker pace than traditional infrastructures. HCI combines the virtualized components of computing, storage, and network into a singular physical appliance. Unlike traditional infrastructures, HCI can be deployed with little to no direct intervention. Moreover, the interdependency of components designed to network and self-organize considerably reduces downtime.
Hyperconverged systems excel at scaling and expansion, simplifying processes of increasing storage and compute capabilities. Yet, with advantages hyperconverged systems bring alongside automation infrastructure, there are hidden complexities requiring management. Some vendors offer customized HCI systems that puzzle together numerous conveyor systems masked in intricate layers of HCI, thus making the entire solution hard to manage.
There has been an increase in edge computing integration within modern supply chains in numerous sectors. For the retail industry, such integration typically leads to increased security, reduced latency, enhanced efficiency, and lower operational costs. The future of retail IT infrastructure is likely, therefore, to be characterized by greater automation, agility, and responsiveness.
SC//Platform advances traditional retail systems which include Point of Sale, stock management, and video surveillance by implementing modern solutions: IoT, contactless payments, AI-based customer identification, dynamic pricing, electronic shelf labels, and so on. It integrates computing, storage, virtualisation, and disaster recovery services into a single infrastructure which drastically reduces operational expenditure on management, downtimes, training, and deployments. The platform also allows automated failover which improves business continuity by providing redundancy and resiliency for dependable performance from facilities without dedicated IT personnel.
Moreover, SC//HyperCore comes with integrated data protection and proactive ransomware defence to provide robust backup and recovery infrastructure. The platform’s cloud-based management allows easy scaling, effortless orchestration of software updates and hardware maintenance, and uniform application performance across various locations. An automated container runtime environment also streamlines operations by allowing straightforward automated deployment and management of virtualized resources to ensure a consistent user experience.
In the modern retail sector, edge computing sells as important as the services it offers. Its flexible, secure, and responsive infrastructure meets almost any edge computing need. Moreover, their current IT systems have deeper issues such as retail technology complexity, latency, and cost challenges. Among other things, edge computing services enable retailers to deliver seamless omnichannel experiences, improve operational efficiency, and gain customer intelligence. It is clear that all of these capabilities will foster competitiveness among retailers in the current business environment and economy.
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