Edge Computing: The Retail Technology Enabler that Drives In-Store Digital Capabilities

retail scene

Changing markets are impacting how most retailers restructure their operations. With trade barriers rising, retailers are forced to transform sourcing and logistics into sophisticated digital supply chains. At the same time, minimum wages are rising for many store and warehouse employees. According to the most recent US Census data, labor represents 43% of retail operating cost. In order to compensate for these extra costs, an influx of automation is needed to help drive worker productivity. Enabling such technology initiatives requires investment in edge computing systems and the physical infrastructure assets that support them.

In order to remain competitive, retailers are also pushing technology deployments that will drive better customer experiences. According to Forrester, nearly 50% of global retail and wholesale business and technology purchase influencers report that improving the customer experience (CX) is a business priority for their companies — and that’s second only to growing revenue[1]. In addition, 68% of global business leaders say that a better customer experience is a high or critical priority for their business.[2]

Improving customer experience is easily stated but can be challenging to execute. In fact, most retailers still have a long way to go to meet customer expectations and to consistently deliver a quality experience. According to Forrester, 36% of US online adults agree that retailers should do more to offer them more personalized experiences; another 22% would prefer that retailers use their information to personalize shopping experiences[3]. Yet introducing such applications into storefront locations requires more robust and faster data processing capabilities.

Some retail innovations that are making a difference

Despite an overall industry hesitation to invest aggressively in new technologies, retail market leaders are introducing new digitized approaches into their operations. For example, some retailers now have systems that enable customers to order products online but to pick them up at nearby storefront locations. This approach relieves online customer concerns of porch-theft when packages are left at the doorstep while no one is at home.

Others are taking steps to enhance purchase personalization. One beauty products retailer, for instance, uses loyalty program customer data to drive in-store personalized promotions, providing virtual makeup application capabilities and other automated in-store salon services for customers.

Another retailer is deploying a new mobile app that uses face mapping technology to personalize the process of trying on designer glasses and sunglasses. By matching the shape of a customer’s face with an optimal eyeglass style, the customer is more assured of a look and feel that is more comfortable and attractive. When such services are made available, however, the challenge becomes capturing, managing, and interpreting customer data for strategic personalization. Without a robust back office edge computing system in the store, data cannot travel back and forth fast enough to make the customer experience seamless.

Drivers of retail edge computing deployments

Early adopters of edge computing technologies are embracing multiple storefront automation approaches. One regional convenience store operator had recently decided to place an emphasis on new edge computing technology as a means for driving more traffic to their stores, improving efficiency, and generating higher sales per customer. Their goal was to open 30-40 new convenience stores per year. They also were looking to expand their product and service offerings at current locations.

There are numerous reasons why corporate retailers are turning to edge computing as a solution for addressing their in-store data gathering and processing needs:

  • No onsite IT staff is required – Hardware and software solutions that provide the edge computing infrastructure often embrace a standardized design and are typically pre-integrated and pre-tested before shipment. This means that IT support or technical staff are not required on-site when systems are delivered. Since the process of plugging in and starting up is relatively simple, installation time and costs are minimized.
  • Remote management reduces ongoing support costs – When connecting and managing an asset, Intel and Accenture estimate a 10 to 15% increase in maintenance productivity. In the case of a simple Uninterruptible Power Supply (UPS), this represents a $100 savings over the life of the asset. In the case of a national retailer with 1,800 stores, each of which is equipped with a small UPS in the back room, this equates to $1.1 million in savings. This is just one example where cloud-based asset management and monitoring tools can help return millions of dollars in operational expenses back to the business.
  • Improved security enhances peace of mind – Today’s edge computing solutions are housed in racks that prevent tampering, and can be equipped with cameras so that system access can be visually monitored from remote sites. Such physical security is critical in people-intensive storefront environments with customers, vendors, suppliers and employees moving in and out of the store premises on an ongoing basis.

For many retailers, new micro data centers are providing the infrastructure needed for hosting edge computing environments. These pre-assembled, pre-tested and integrated solutions are configured into an enclosure. The racks, power distribution units, uninterruptible power supplies (UPSs) and management software that make up the solution are designed for non-IT savvy workers. Monitoring software determines where each micro data center is located, can visualize the specific configuration of each micro data center and can see a detailed message of health of the system. In some cases, the management system will even recommend a course of action and generate service tickets for the local managed service provider (MSP) to provide support.

Why retail needs to leverage edge computing solutions

Retailers need the right technology to continue evolving, to remain competitive, and to achieve Certainty in a Connected World. If you are already planning to attend Schneider Electric’s Innovation Summit in Barcelona, I hope to see you at my “How to Survive the Retail Evolution: EcoStruxure for Retail” session. If not, you can still live stream the event and session by clicking here. In the meantime, learn more about how an edge computing infrastructure supports retail industry efforts to drive in-store customer digital experiences by accessing our blog post, Why Retail Needs to Leverage Edge Computing Solutions.

[1] Trailblazers of The Top Five Retail Tech Trends, January 2019, Forrester

[2] Predictions 2019: Retail, Forrester Research

[3] Ibid.

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