In today’s dynamic, unpredictable consumer marketplace no retailer can afford to be held hostage by legacy systems. Despite this, rigid, proprietary IT continues to hold back retailers’ productivity, resilience and ability to innovate. Bain and Company flagged this problem in a report called The Future of Retail: Winning Models for a New Era. It advised: “to create the distinctive products, seamless service levels and meaningful brands needed to sustain a winning streak these days, retailers also have to excel at rapid innovation.”
Much like the consumers they serve, retail systems are diverse and behave differently depending on their generation. Trends in retail systems architecture tend to mirror consumer habits. Today more people engage with and buy from retailers through new on and offline channels - from chatbots to social networks to high tech brand showrooms. It follows that modern IT systems that embrace open standards are linking up to provide consistent, ‘frictionless’ brand experiences across these channels.
By the same token, the inflexible, monolithic legacy systems built for the brick and mortar age are fast approaching their sell-by dates. Unpredictable events and microtrends rippling through our virtual and physical worlds mean that retailers need to be more responsive than ever. With legacy systems, to do things like add a new payment system, introduce greater personalisation or launch a new channel, developers must make extensive changes to databases, source code and front ends. This manual work takes too long, costs too much and is prone to human error.
A new architecture for the speed of modern retailing
To enable speed and flexibility, the best foundation for retail systems is what’s known as a ‘headless microservices' architecture’. It’s a mouthful, so let’s unpack this, starting with the term ‘headless’. A headless system decouples the user interface (UI, or frontend) from the backend and has both communicating through APIs. This means that changes made to front end applications don’t require any corresponding changes to underlying data or code in the backend.
Now let's dig into ‘microservices’. Microservices break down an application into small, modular components that run independently “as-a-service”. Because they run autonomously, each service can be updated, deployed, and scaled to meet demand for specific application functions. Microservices also communicate with one another through APIs.
Supporting flexible customer journeys with headless microservices
Let’s take a simple example of a retailer that wants to run a snap promotion in response to a consumer trend. A retailer with thousands of SKUs could have tens of thousands of purchase combinations impacted by this one promotion. To adapt in time, the front end e-commerce layer must be fast and easy to configure - ideally by non-technical people. This is exactly what headless systems are designed for.
Headless commerce is much more than a trendy new architecture that uses APIs to communicate. It’s about introducing speed, flexibility and functionality to large-scale, complex retail operations. Why? In order to serve customer optimally on whatever ‘journeys’ customers decide to travel.
More seasoned readers may remember Martini’s advertising campaign: "Any time, Any Place, Anywhere....". Retailers have historically laid out journeys as specific individual sales pathways. Today, however, the proliferation of devices used in retail transactions, including tablets, smartphones and kiosks, mean customer journeys can be highly diverse and unpredictable. And in the context of the Covid-19 lockdown, retailers are also setting up new supply chain configurations to serve customers safely and efficiently. Just like in the physical world, one needs the flexibility to turn around, change direction, change route, change vehicle and pause along the way.
The integration of mobile apps, web and physical stores mean that orders, appointments, baskets, wish-lists, loyalty points and promotions trigger new directions and vehicles for the customer’s journey to take between origin and fulfilment. This means retailers must now have infrastructures that allow for these variable journeys.
With headless commerce architectures and microservices it’s possible to design modular, flexible systems with shopping baskets, wish-lists, loyalty incentives and orders essentially follow the customer everywhere on their journeys. Editing, changing, adding and subtracting can happen anywhere, any time.
Five critical capabilities to look for in headless commerce platforms
For all the reasons already mentioned, there is currently a great deal of hype about headless systems. Technology briefs for evaluating legacy systems won’t help you find the right solution. Here are five critical capabilities to look for:
Easy-to-use tools - to get most out of their headless microservices, look for systems that include a toolkit that enables non-techies to modify and enhance existing applications and create new functions and applications for point-of-sale, web, mobile and tablet devices.
Flexibility - When every function becomes a microservice, retailers gain maximum functionality and flexibility. Many retail applications are written in object-oriented programming languages that consist of classes and methods. The framework should ensure that each class is automatically wrapped as a microservice so that it can be invoked both locally or remotely over a network.
Visual interfaces - Look for tools that present workflows visually with a drag-and-drop user interface, allowing non-developers to design applications and business processes. With visual tools, development changes from being code-focused to business or application-flow focused.
Portability and reuse - Seek out headless systems based on open standards. These offer high flexibility and portability and ensure applications can be easily reused. The combination of an open standards environment and a visual interface further enables a high level of collaboration between IT teams and business users.
Reject the black box - In a headless microservices architecture there are groups of services and APIs which provide the backbone to the entire commerce architecture. Avoid services that are black boxes. These either offer limited functionality and flexibility. Major enterprise retailers don’t choose black-box natured systems for large-scale mission-critical systems so why should headless commerce be any different?
The good news for retailers that have been held hostage by their IT systems is that they don’t need to rip out and replace everything to move to a modern headless microservices architecture. Platforms are available that allow retailers to integrate existing systems, so migrating to and adding newer applications can happen in phases over time. There’s never been a better time for retailers to lose their heads!
Julius Carrell, business development head, Enactor