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Covid-19 – What is the lasting impact on commerce and lesson for online retailers?

(Image credit: Image source: Shutterstock/Maxx-Studio)

Use of a modern commerce platform offering headless, API-first, cloud-native and microservices helps retailers be better prepared for rapid change in shopper demand

While lockdown was unquestionably the right course of action to protect as many people from Covid-19 as possible, it sent huge shockwaves across the retail sector, some of which are still being felt many months on. In April it was estimated that global retail spend will fall by £445.9bn ($549.7bn) for 2020 according to GlobalData. As lockdowns lift and retailers decide their next course of action, it is worth reflecting on the unforeseen effects of coronavirus on commerce and learning from the experience. This is not just important for businesses to recover successfully and keep as many employees in work as they can, but also so they can be better prepared should another crisis strike, pandemic or otherwise.

Over the last few months, online retailers, particularly in the food, drink and grocery sector were hugely impacted by the sudden and unexpected increase in shopper demand, with some websites crashing or experiencing long virtual queues with the surge in web traffic. A big barrier for many retailers being able to cope has been clunky, legacy technologies. Indeed, German supermarket chain REWE noted that it wouldn’t have been able to set up hundreds of additional REWE click & collect stations during the pandemic without the use of a headless commerce platform.

Having the right technology matters

The pandemic has shone a light on the importance of retailers having the right technology, namely a modern, non-monolithic commerce architecture, to enable them to be better prepared for rapidly changing circumstances.

In other words, the key lesson for retailers is that they need the right technology foundation to be agile enough to deal with crisis scenarios in which they need to quickly and easily change the way they do business online.

Modern commerce platforms which are cloud-native and API-first, and which leverage technology such as headless commerce and microservices enable online commerce players to be on the front foot no matter what challenges arise.

Modern commerce technology key

There is a lot of modern software available right now to help retailers be better prepared for future disruption and cope with rapidly changing circumstances. Modern platforms offer a host of benefits. One is the ability to scale-up based on customer volume thanks to cloud-native technology.

Cloud-native technology is crucial, as retailers won’t achieve the same ability to scale-up with software that is only hosted in the cloud. While some retailers were in the cloud during the pandemic’s peak, their apps and data weren’t optimized to take advantage of the cloud’s benefits. A lot of lift and shift of apps and data from on-premise to the cloud has been exposed by the pandemic online retail rush.

However, retailers now have a clear opportunity to drastically improve their systems by adopting cloud-native commerce. The technology copes automatically when there is a peak in online traffic, meaning there is no need to organize additional resources when commerce channels are overloaded. As well as helping prevent complete system crashes during periods of peak demand, cloud-native commerce technology ensures shoppers experience fast and responsive applications for a smooth and pleasant browsing experience. 

Another is the ability to adapt the online shopping experience using APIs. ‘API-first’ platforms, also known as API-based commerce platforms, are specifically designed to allow retailers great freedom and flexibility, invaluable in times of crisis. An API is like a travel adaptor that allows you to plug in any application into any other application’s socket in any country in the world; APIs guarantee fast and safe information exchange to connect applications which allows brands to add new ways for their customers to shop, from websites to mobile apps to voice.

Retailers that use API-first platforms are able to benefit from GraphQL support, a query language that makes it even easier to manage and update data within their commerce systems. While a plain API call includes a lot of peripheral data that’s often unneeded, an API that is expressed in GraphQL allows developers to fetch only the data that they requested for. The absence of excess data means a smaller data payload and faster speeds for users, while developer efficiency goes up as they no longer have to deal with sifting and filtering out what they don’t need.

For example, when the developer is rendering a new product page, they may only need a product’s item number, price and description, while all other product information is redundant for that use case. Using GraphQL, they can request only that data and can work more efficiently than competitors still relying on legacy software built for decades ago when the internet was still new. This enables retailers to capitalize on modern commerce architectures to go-to-market with new innovations first and boost sales.

Modern commerce allows other benefits too. With it, retailers can streamline and improve the shopping experience by making changes and performing upgrades without downtime. They can also create custom functionality easily with headless commerce and microservices.

A headless commerce platform means all the retail front-ends are separated from the back-end, but are each connected to the same back-end via an API. Any changes made to the back-end that are also needed in the front-end are updated seamlessly with no downtime. It also means commerce developers can trial new features that enhance the user experience and easily roll them out, and add new offers and products much quicker than retailers without headless commerce. This allows them to be able to react quickly to market changes without slowing down the system or obstructing sales. Retailers who harnessed headless during the pandemic were able to adapt easily, for example by adding popular new product lines to their commerce platforms such as hand sanitizer and face masks and adding Covid-19 guidance.

Microservices are small, standalone applications that are individually designed and can be combined to fine-tune how customers look at products and purchase them online via retailers’ various channels. They can be visualized like toy blocks that fit together. For example, a brand could customize which payment system, advanced search functions, check-out facilities and product visualizations they want to offer. These can be updated independently, as and when the retailer chooses to adapt to changing shopper demands.

Reviewing the technology foundation

The pandemic meant businesses had to pivot from a sizeable fraction of their business being online to all of it being virtual. They were forced to think creatively, experimenting with features and ideas to maintain customer loyalty and sales. Legacy commerce systems made that harder to do, and do to in ways that allowed them to take an idea from the drawing board to the real world. As well as the physical limitations legacy software places on users, a monolithic architecture can limit developer’s ability to ‘think outside the box’, as their technology set-up simply does not allow for the ease of trialing and testing new ideas. Retailers with modern commerce technology on the other hand allowed retailers the flexibility and freedom they needed to adapt, and fast.

Retailers that did not benefit from modern commerce during Covid-19 need to review their current commerce architecture as soon as they can so that they can be more agile and able to adapt to changing circumstances. Without the right tools, they will continue to be held back by clunky and complicated processes and systems that perpetuate inefficiency and may cause front-ends to break, resulting in delays. Modern technology however, will allow them to test and rollout new features quickly, improve shopper experience, automatically scale with increased customer demand – without slowing down loading speeds, add new products and channels ahead of competitors and much more.

Covid-19 was an unprecedented global event, but it won’t be the last unexpected crisis to occur. Retailers not only need to rethink technology for the sake of recovering from the fallout of coronavirus, they also need to do so to be better prepared for any future shocks that arise.

Brad Soo, Product Marketing Manager, commercetools

Brad Soo is product marketing manager at commercetools, a next-generation software company that offers a true cloud-native, headless commerce platform, providing the building blocks for the new digital commerce age.