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Retail’s evolution depends on
edge computing

As more retailers deploy innovative, in-store technologies to boost the customer experience, improve performance, and reduce costs, edge computing is becoming a must-have.

After a year like no other, marked by shutdowns and physical distancing, retailers are revving up for consumers to head back to physical stores in droves. Shoppers browsing in the aisles may be only hazily aware of the digital transformation that has been shape-shifting retail for years, including Bluetooth-enabled beacons, personalized offers, and salespeople toting digital tablets.

But these changes are accelerating quickly, thanks to mobile applications, robotics, and internet-connected devices that improve the customer experience in the store, monitor operations, boost cybersecurity, and reduce costs.

Today’s shoppers have become accustomed to Amazon-like e-commerce experiences and are demanding more from the brick-and-mortar stores they frequent. From smart shelves and virtual dressing rooms to automated checkout options and staffing analytics, it’s clear that retail’s post-pandemic future will be powered by automated technologies that provide real-time results and meet rising expectations for a seamless shopping experience. In fact, according to research by Global Data, nearly eight out of 10 retailers are moving to an “omnichannel” model, aiming to unite online and offline shopping (see Figure 1).

Today’s shoppers have become accustomed to Amazon-like e-commerce experiences and are demanding more from the brick-and-mortar stores they frequent.

To deliver on customer expectations for speed and flexibility, retailers need to bring the applications and the underlying processing and storage closer to where the data is being created. To do this at scale requires edge computing, which can handle applications and workloads for thousands of store locations by running computational power through nearby network and storage equipment, called nodes, rather than risking issues with data transfer speed and bandwidth by uploading all that data directly to the cloud.

Retail reformation
In response to the pandemic and wider industry trends, more than three quarters of retailers are aiming to make online and offline shopping seamless, and two thirds are remaking the shopping experience—a big box store creating a boutique vibe, for example.
Figure 1
Source: “Retail in 2021 and beyond: Trends and solutions with edge computing,” Global Data, sponsored by Lumen, April 5, 2021

“When you think about a retailer that has 2,000 locations across the country, it’s too expensive to deploy on-premises data processing and analytics for every single location, so that’s where edge computing can be a huge boon,” says Paul Savill, senior vice president of product management and services at technology company Lumen, who points out that edge computing is designed to work in tandem with cloud. “Edge nodes combine hardware-driven computational power with software-defined networking capabilities to connect it to the public cloud,” he explains. “From one centralized node in one market area, say, the size of Denver, edge computing can serve many more retail locations within five milliseconds.”

Opportunities outweigh challenges

Shivkumar Krishnan, head of stores engineering at Gap Inc., says the biggest challenge to making edge computing a reality in retail is legacy infrastructure. “As an end user on the cloud, it’s much easier to upgrade, since you can simply push a button and shut down or replace a virtual machine. In retail, it’s more of a logistics problem,” he explains. When setting up the first time, each location needs to connect its devices to the edge, which may need to be done at night, when customers aren’t in the store. And with vendors working on-site, store security staff as well as the manager will need to be on hand. “It really becomes more of a logistics challenge to figure out the availability of everyone,” Krishnan says. “And the process needs to be repeated for each of our 2,500 stores.” In the cloud, one push of a button can deploy hundreds of servers.

Data security is also an inevitable challenge when it comes to the internet of things and other digital devices. “The more you concentrate information in a location, the more you have to worry about protecting that, and the riskier that becomes in terms of creating a single spot that can be penetrated, and information stolen,” says Savill. But edge computing supported at nodes in nearby data centers and connecting to the public cloud are generally more secure and reliable than what a retailer could do on its own. That’s because edge providers, much like public cloud providers, are providing cybersecurity from a central location, on a mass scale, so they have visibility into what the threats are and how they’re affecting their customers, says Savill.

That said, the benefits and opportunities of the edge far outweigh potential challenges. “One of our biggest use cases for edge computing is at the point of sale, where we process millions of transactions,” Krishnan explains. From the store to the cloud, there are many failure points—switches, routers, the telecom circuit, and cloud providers. “The edge gives us a high level of redundancy to process all transactions at the store itself and fall back to the cloud if the edge fails,” he says.

“The edge gives us a high level of redundancy to process all transactions at the store itself and fall back to the cloud if the edge fails.”
Shivkumar Krishnan, Head of Stores Engineering, Gap Inc.

Gap Inc. has invested in edge servers over the past few years, says Krishnan, as part of an overall platform using the latest technologies such as microservices, cloud computing, streaming services, and a DevOps approach to engineering. “Now, with our platform, we can build, validate, and deploy applications with rapid turnarounds—all within the same day,” he says. “I can remotely monitor and manage the majority of our over 100,000 devices. Our sales associates use iPads that give us the ability to build native mobile user experiences that are intuitive.”

While Gap Inc. was early to the edge computing game, the challenge is keeping up with the latest and most advanced technologies, as with any technology adoption. Today’s edge servers have built-in graphic processing units, network routers, and broadband technology 5G, “all packaged in small-footprint devices that are built from the ground up for advanced machine learning,” he says. “Hopefully, we will catch the next iteration of these advancements and leapfrog others who get them now.”

What customers want
The 2020 coronavirus pandemic has made customers more aware of how they shop in stores. According to a recent survey, the majority want self-serve options like product info and contactless payment using cell phones.
Product Information
Product Information

Scan items and see details on your phone

65%
Navigation
Navigation

Use phone apps to help find products in the store

61%
Contactless payment
Contactless payment

Pay with your phone or cards without touching keypads

50%
Self-checkout
Self-checkout

Pay for items with your phone or self-serve registers

49%
Appointment systems
Appointment systems

Book an appointment or get customer service in advance

30%
Virtual mirrors
Virtual mirrors

Try on clothes virtually using augmented-reality devices

20%
Figure 2
Source: “Retail in 2021 and beyond: Trends and solutions with edge computing,” Global Data, sponsored by Lumen, April 5, 2021

A competitive edge for retailers

According to Global Data’s research, technology can help customers feel safer in stores as they return in greater numbers to in-person shopping. Many expect far more than they used to from the customer experience: 65% would like to scan items and see product information on their phones, 50% want contactless payment options, and one fifth are ready to use augmented-reality “magic” mirrors to try on clothing (see Figure 2).

These advanced, even immersive, technologies require the support of edge computing, which can give retailers a leg up in a highly competitive landscape—so important after a year in which dozens of large retailers fell into bankruptcy and many more struggled to survive during covid-19 shutdowns.

“Retailers have to up their game to bring customers back to stores,” says Krishnan. While the industry is at an early stage of adopting edge computing, it is at an inflection point: “There is still a great deal of opportunity for growth.”