Retail has been shaken to its core and the impact will be felt for some time to come. It’s no surprise Deloitte Access Economics’ latest quarterly Retail Forecasts subscriber report (Q2 2020) indicated that Australia’s retail turnover growth is expected to fall 1.4 per cent in 2020, making it the worst year on record.
Online retailers (particularly food, drink and grocery) were hugely impacted by sudden and unexpected increases in demand. According to McKinsey, we saw an acceleration of trends that already existed before the crisis, with online delivery’s volume increasing by the same amount in eight weeks as it had over the entire previous decade. Woolworths and Coles experienced online delivery shutdowns due to frenzied consumer purchasing and had to rapidly scale networks to prevent further outages. Meanwhile, websites crashed or experienced long virtual queues with surges in traffic – their efforts to cope hindered by clunky, legacy technologies.
Retailers contemplating their future need to take two key learnings from the COVID experience in order to be better prepared to weather future crises, pandemics or otherwise, because the need to scale quickly around sudden spikes isn’t going to disappear.
Firstly, business as usual has become “expect anything” and businesses can no longer work the same way they always have, they must embrace new possibilities because there are more than ever before.
Secondly, you can only be as agile as your technology allows and it’s this that will dictate whether you’re able to deal with crisis scenarios. The foundation of all modern commerce platforms must be to ensure businesses are always on the front foot, no matter the challenge. What that means is an approach based on something we call M.A.C.H Architecture (Microservices, API-first, Cloud-native and Headless), and more recently trademarked by Gartner as composable commerce.
There is no shortage of modern software to help retailers better cope with rapidly changing circumstances, but the core technologies to look for are those that enable them to:
1. Scale-up based on customer volume (cloud-native technology). While some retailers were in the cloud during the pandemic’s peak, apps and data weren’t optimised to take advantage of the cloud’s benefits, and a lot of lift and shift from on-premise to the cloud was exposed by the online rush. To avoid that mistake again, retailers have a clear opportunity to improve systems by adopting cloud-native commerce.
2. Adapt the online shopping experience (API-first). Like a travel adaptor that allows you to plug in any application into any other application’s socket, APIs guarantee fast and safe information exchange to connect applications so brands can add new ways for customers to shop, from websites to mobile apps to voice.
3. Improve shopping experiences through changes and upgrades without downtime, and create custom functionality easily (headless commerce and microservices). Headless commerce separates retail front-ends from the back-end, so features that enhance the user experience can be trialled and rolled-out easily, new offers and products can be added faster, and market changes can be responded to without slowing the system or obstructing sales. During the pandemic, headless retailers could adapt easily by adding popular new product lines to their commerce platforms such as hand sanitiser and face masks, as Vistaprint did. Standalone applications that fine-tune how customers see and purchase products, microservices are like blocks that fit together. Businesses can customise which payment system, advanced search functions, check-out facilities and product visualisations to offer.
“Thanks to headless, we were able to launch two massive projects in the span of about four to five weeks, something we would not have been able to accomplish with our legacy platform,” said Jim Sokoloff, VP, Platform, Logistics Optimisation and Operation at Cimpress, Parent Company of Vistaprint.
“We launched a much needed product in a timeframe that was relevant to our customers and the world all from a more flexible approach to commerce and design.”
COVID-19 was an unprecedented event, but it won’t be the last disruptive event. If it’s taught retailers anything, it’s that technology is at the core of their success and can save them a lot of headaches when it comes time to pivot and adapt.
Josh Emblin, Commercetools Australia