From multimillion-dollar Super Bowl commercials and buzz-worthy Black Friday sales to gamified rewards programs and innovative experiential stores, retailers will try anything to attract customers, sell more items per visit, and gain market share. But as the retail landscape evolves and competition grows, merchants who are used to traditional sales tactics are turning in greater numbers to a new kind of tool — more powerful and ubiquitous edge computing.
Although this technical term sounds complicated, its core idea is simple: Edge computing takes place near the main data source instead of far away from it. It means having computing capabilities where data is being created. Sensors on store shelves can help manage inventory or inform display strategies faster when those sensors have computer resources to process and analyze that data. That information can help local store managers adapt but that data can also be sent to the retailer’s main data centers to help regional or national store managers.
A well-planned edge computing strategy can benefit both retailers and their customers, according to industry experts. In a recent TechBiz article citing findings from the S&P Global Marketing Intelligence report, it’s vital that retailers have modern IT infrastructure to successfully operate on the edge.
“To deliver those mission-critical use cases, retailers need to modernize their IT to support an intelligent and data-driven edge — IT infrastructure deployed in or close to store venues where consumers live, work and shop,” the S&P report noted.
Improving the Experience for Customers and Retailers
Despite e-commerce’s impressive growth, millions of people still prefer in-person shopping. New uses of Edge computing in retail help bring digital and physical together by giving stores actionable insights from the mountains of data that they collect about customers.
“By leveraging the power of distributed edge computing … [retailers] can enable automated decision-making, in real time, across the retail store,” consulting firm Accenture explained in its 2021 “Store of Tomorrow” report. “That might mean, for example, transforming customer experiences by providing personalized product recommendations via interactive screens or smartphones as shoppers walk around a store.”
In particular, edge computing can unlock a “dematerialized” shopping experience. “Edge computing … [allows] customers to order certain products by scanning QR codes with a smartphone — and have their purchases served up in minutes by a micro-fulfillment center,” Accenture continued.
Edge computing use cases in retail aren’t limited to customers. Store clerks and internal teams also benefit by having local records of individuals and transactions — areas where retailers can’t afford to falter.
“The reliability of data needs to be solid on every transaction,” said Steve Ma, senior director of enterprise architecture at Walgreens Boots Alliance, an integrated health care, pharmacy and retail leader serving millions of customers and patients.
“What did the customer pay for? What else was in their cart? Is the amount correct? Then there’s the shopper’s personal data, such as their phone number. That entire transaction better be secure. Edge computing allows us to store that data locally.”
An ongoing issue for retailers is inventory management. In the wake of the pandemic, Target warned that rising inflation and decreased discretionary spending would impact big-box stores. The company reset its inventory last summer, watching its operating income decrease by 87% compared to the previous year.
Although it may not wholly solve all inventory woes, edge computing can improve forecasting and put companies in better positions to deliver for customers.
“Most of your competitors use inventory management systems that are updated at a certain frequency,” said Anatolii Landyshev, CTO at cloud software company Visartech.
“However, those systems don’t always display the actual available goods. An edge computing system updates data instantly every time a product is sold or added to stock, allowing retailers to reduce errors and improve the accuracy of inventory management.”
The Promises and Pitfalls of Edge Computing in Retail
This new wave of edge computing in retail industry innovation is still in the early stages. So before a company dives headfirst into a possible solution, it’s essential to understand the end goal.
“The design of an edge computing solution is about the use case. There’s a lot to consider from a retail standpoint,” Ma said. “Is it about resiliency, performance, cost-cutting, customization to individual stores, or getting more compute workload off the cloud and closer to the stores’ on-prem data centers?”
Amazon Fresh grocery stores — where shoppers scan a QR code or credit card upon entering, shop for items and leave without ever going through a traditional checkout line — demonstrate how convenient edge computing in retail industry applications can be.
Amazon Fresh and similar stores provide new shopping experiences for customers. As Ma noted, businesses can’t approach them the same way they would a classic retail environment.
“These stores are unique,” Ma said. “Everything’s automated, so it requires high-level performance with additional workloads. The platform has to recognize things like the identity of the shopper and the weight of items taken off the shelf with no human intervention.”
“Meanwhile, a clerk or pharmacist in a more traditional store might get more questions and have a Wiki or knowledge base they can reference. They need to make sure their systems can answer those questions. These different use cases and compute demands require drastically different edge computing requirements.”
Edge computing solutions may offer quicker results for customers, according to Saikrishna Kotha, head of global network services at PayPal. For online shoppers, that speed could be the difference between checking out or abandoning a cart, he said. Quickly getting personalized results within an app encourages brick-and-mortar shoppers to see — and buy — items they may have otherwise missed.
“If a business is refreshing a web page or app for a customer, it wants to display the living content based on the customer’s shopping experience,” Kotha said. “That information needs to be customized and loaded super fast.”
“Retailers should ask, ‘How much of a roundtrip delay can I avoid?’ Moving some content to an edge computing solution can help reduce that latency.”
Samir Sandesara, an engineering technologist overseeing edge solutions at Dell Technologies, believes the edge produces better business insights.
“Edge computing helps retailers better understand customer behaviors and needs throughout the customer journey,” Sandesara wrote in an article for TotalRetail.
“The ability to monitor product interaction, detect repeat customers, and gain detailed insight into the path and choices made by consumers has historically been an advantage of e-commerce sites. With edge computing, retailers gain those same insights in traditional brick-and-mortar settings, while adhering to local privacy and regulatory needs.”
Bringing Retail Improvements to Life
Edge computing is evolving to address needs that are specific to retailers’ and customer needs. But today, building a platform for edge computing requires many considerations, Ma explained.
“Maybe you create a reusable platform that will use edge cloud infrastructure,” Ma said. “Then you have to balance multiple applications, data orchestration, and devices for consumers and clerks. You build out that infrastructure, but what will the hardware look like?”
Another big thing is networking.
“At some point, the edge platform needs to connect to a centralized source of truth, whether a primary data center or the cloud,” Ma continued. “It’s not trivial; it’s a very large, complex project.”
It’s important to already have tooling systems in place, and to understand when it’s most appropriate to deploy edge computing, Kotha stressed. For example, a clerk needs a customer profile to process a return. If getting that data from the cloud takes longer than three seconds, the store’s system could invoke logic to access the customer information from the local storage device.
Stores can see their edge locations grow from tens to hundreds of thousands of sites. It’s important for an IT system to to have flexibility and a simple, fast way to manage applications and data across multiple stores. Greg White, senior director of product and solutions marketing at Nutanix, said there’s a need to connect to the cloud or be able to operate without a cloud connection and connect at some point to update systems. It helps to have an IT platform that can span the edge to the core to the public or managed cloud service without creating silos.
“Hyperconverged infrastructure is great for this,” White said. “An untethered site that can still function but that can sync periodically.”
By combining server, storage and networking, HCI helps handle new demands of apps at the edge, he said. It also helps when IT teams can automate updates and manage systems remotely.
“IT teams need to consolidate how they support diverse workloads without without having silos of dedicated infrastructure for particular needs. This makes scaling easier as needs change.”
When retailers engineer their IT resources for optimal speed, efficiency, and security, edge computing allows them to deliver in-store experiences that engage customers and fuel the global economy.