Retail on the “Edge” of change

Enhanced customer experiences that entice, amaze and urge shoppers to engage – both in-store and online – will be vital to the success of any retail organisation. In addition to functional requirements such as e-commerce platforms and contactless payment options, retailers also need to consider competitive offerings like real-time stock checking, in-store navigation and personalised recommendations and offers. In-store Wi-Fi networks will prove invaluable – not just to facilitate these digital initiatives but also to help unlock more accurate analytics as anonymising features to stop tracking become more prevalent on Apple and Android devices.

As retailers pursue the digital transformation required for these advancements, data has become the cornerstone. Not only has the volume of data generated rapidly grown due to the increased reliance on technology, but also its value to business strategy and success has substantially increased. Retailers must improve their ability to harness, analyse, secure and store the data at their disposal, or risk grinding to a standstill, frustrating employees and customers and losing their competitive advantage.

Enter the move to the Edge – the place where people, devices and things connect to the digital world. Data is moving to the Edge because it increasingly needs to be utilised in real-time – and retailers must find ways to follow. When real-time really means real-time, even the sub-millisecond latency of sending data back-and-forth to the data centre can undermine the effectiveness of a system and its outcomes. In addition, as faster connectivity becomes more prevalent, use cases become more ambitious and the volume of data needed to support them explodes, the only answer will be for that data to live on the Edge.

So, what will this move look like for retailers? While full adoption of Edge technologies is still at an early stage, some key trends have already begun to emerge. Here’s what we’re seeing.

There has been an uptick and growing sense of urgency in the adoption of Edge technology.

According to our latest survey, 74% of retailers are actively using Edge technologies to deliver outcomes (either in pilot or production deployment). Another 14% expect to implement Edge projects within the next 12 months. The majority (83%) also acknowledge that an integrated system for handling data on Edge is an urgent requirement.

Retailers should not dismiss this urgency. Our results suggest there is a capabilities gap growing between those who deploy data using Edge computing and those lagging behind. 78% of organisations in production deployment say they are creating actionable insights from the data extracted to improve business decisions and processes. Comparatively, only 31% of those trialling projects in the next year, and 24% of organisations waiting beyond this year, report the same ability.

Edge technology is mainly being used to drive efficiencies, and, ultimately, enhance the customer experience.

Edge may be a growing necessity, but it is also a huge opportunity. Retailers are capitalising on the enhanced potential of real-time data through a number of key use cases. Of those already deploying Edge technologies in some way, 51% are utilising Edge to continuously track and monitor items through the supply chain, while 50% are using it to provide customers with automated, instantaneous calculations of their shopping cart’s price and environmental footprint. Another 46% are offering deep personalisation of live retail experiences through targeted offers, and 45% are applying dynamic pricing based on footfall and sales volume data.

This is just the beginning, with retailers also looking at more innovative areas such as VR and multi-sensory experiences that allow customers to try on clothes and touch goods virtually.

Edge technology will answer the need for more agility across the industry.

The closer a business gets to where data is being generated, the greater its visibility and responsiveness should become in turn. Interestingly, a more agile network would also be the answer to the main barriers to Edge adoption cited by retailers.

The main one is the cost of implementation, as reported by 44% of organisations. Resources and budgets are shrinking, especially in these challenging times, but business expectations are growing – resulting in the need for more agility and cost-effective approaches. The growing trend towards “as-a-Service” provider models would address this by offering flexible financial and consumption options across hardware, software, and management operations.

An agile approach to data also demands speed and open access, but securing and monitoring users, devices and things is time-consuming. Other significant concerns cited by retailers were a lack of available skills (30%) and security implications (26%).

But at the same time, 46% said that an increase in security would be one of the biggest benefits of capturing data from user devices, and 75% indicated that IoT adoption would have a positive impact on security in the next two years. Edge would enable retailers to keep up with the growing demands of security, while freeing up IT capacity to focus on the most complex problems and important opportunities.

Edge computing is not just about the innovative use cases of data that can be processed and harnessed in real-time; it is also about a more efficient approach to capitalising on data, one that removes cost, increases speed and reliability, and allows retailers to deliver the experiences that are now necessary to survival.

The good news for retailers is that while shifting to Edge requires a new mindset and approach, it does not mean they necessarily need to prepare for a costly and complex transition.

Written by Jacob Chacko Regional Director – Middle East & South Africa Aruba, a Hewlett Packard Enterprise company