The face of the retail industry has completely changed over the past decade. In old days retail success measures by the quality of goods placed on a physical rack. Today, the retail industry is a sophisticated technology stack that includes digital commerce applications, point of sale systems, social commerce, and technology-enabled supply chain operations. The key driver behind this revolution is Integration Architecture.
The biggest challenge for a modern retailer is not just selling a product. The challenge is making sure that when a customer clicks to buy a jacket on a mobile commerce app, the inventory system, the warehouse, the delivery company, and the loyalty program all communicate with each other instantly.
This is where Microsoft Azure has entered the market. Not just as a cloud computing company but as the backbone for modern retail integration. Here is how Azure is revolutionizing the architecture of the retail industry.
The Shift from Point-to-Point to Event-Driven Architecture
Legacy retail systems may have been built with a “point to point” integration approach. In other words, to integrate the e-commerce site with the ERP system, a specific integration bridge was built between the two systems. However, as the number of apps, chatbots, and IoT devices increases, these integration points can become a “spaghetti code” nightmare.
Azure can help in shifting to a new architecture called Event-Driven Architecture (EDA). In this architecture, something happens, and a signal is sent out to all the services in the system that need to react to this occurrence.
The Role of Azure
Using Azure Event Grid and Azure Service Bus, retailers can now shift to a more scalable architecture. In a traditional architecture, a specific event happens, and all the services in the system react to this occurrence.
Key Components of an Azure Retail Integration Stack
To create a seamless retail experience, a set of specific Azure services are employed to create a “digital glue” between all the heterogeneous systems.
1. Azure API Management (APIM)
Retailers have a combination of new and modern APIs, as well as older mainframes. Azure API Management is the “front door” for all retail data. It provides backend systems, such as inventory or CRM, to developers of consumer apps, all while managing traffic, security, and even monetizing the APIs, if necessary. It ensures that the data, irrespective of the request coming from iOS or a kiosk in a store, is in a consistent data format.
2. Azure Logic Apps and Functions
Retailers requires SaaS apps integration, which may not communicate with each other out of the box. Azure Logic Apps is a low-code environment for creating workflows. For store returns, a Logic App can automate a workflow to make a refund in the payment gateway and update the CRM without any code.
3. Azure Cosmos DB
In the retail business, time is money. Azure Cosmos DB is a globally distributed, multi-model database. It enables retailers to replicate their data across the globe. This enables a customer in London to see the same real-time inventory levels as a customer in New York. It is the engine that powers the “real-time” experience.
4. Azure Synapse Analytics
Integration is not just about moving the data; it is about understanding the data. Azure Synapse Analytics brings together the capabilities of data integration, enterprise data warehousing, and big data analytics. It enables retailers to merge structured data (e.g., sales) with unstructured data (e.g., customer sentiment on social media) to gain a true 360-degree view of the customer.
Solving Real-World Retail Scenarios
Now, let’s explore two real-world examples of how Azure architecture can solve common retail pain points.
Scenario A: “Phantom Inventory”
The Problem: Your e-commerce site claims to have a certain item in stock, but the last item was sold in the warehouse an hour ago. You send the customer a cancellation email, bad customer service.
The Azure Solution: By leveraging Azure IoT Hub, which connects to shelf inventory, and Azure SignalR, which provides real-time updates to the web, the item level is synced the millisecond it is scanned or sold. So, the “Available” quantity is a real-time quantity, not a quantity updated once a day.
Scenario B: Unified Commerce (Omnichannel)
The Problem: Your customer makes an online purchase, wants to return it to a store, but the store associate can’t locate the online transaction ID in their system.
The Azure Solution: Leveraging a unified data strategy enabled by Azure Data Factory, combine data from the e-commerce platform and the POS system into a single data “lake.” So, the store associate can look up the digital receipt on their tablet simply by entering the customer’s phone number.
The Advantage: Hybrid Cloud and Edge
One of the greatest advantages Azure has over its competitors in the retail space is its Hybrid Cloud capability. Not all retail scenarios are conducive to cloud computing. A supermarket store might not have reliable connectivity, or the factory might require low-latency processing.
With Azure Stack Edge and Azure Arc, retailers can now run Azure services inside the store (at the Edge). This means if the internet goes down, the POS systems will still operate, and the data will synchronize back into the cloud on restablishing the connectivity.
Conclusion
No longer is the modern retailer just a seller of goods. The modern retailer is now a technology company, selling goods. To survive, they need an Integration Architecture that is agile, intelligent, and always on.
Azure has the comprehensive toolkit necessary for the retailer to transition away from the rigid, legacy-based silos they are familiar with into a fluid, connected environment. Also, by utilizing the integration services provided by Azure, the retailer can now focus on what is most important providing the customer with an experience that is seamless and personalized, no matter where they choose to shop.
