The way we shop is changing rapidly. The pace of change makes it more difficult than ever for retailers to forecast accurately. Today’s retailers don’t know tomorrow's customers expect. The only certainty is that an attractive product range alone isn’t a competitive advantage anymore; consumers have an almost endless choice of alternative vendors.
The approach, ‘We have the products, so let’s find the customers we can sell them to’ no longer works today. Successful retailers are those who place the consumers at the center of their efforts and create relevant offers — independent of location and time — recognizing or evoking needs, attracting attention and building a customer relationship. In doing so, they often discover technological innovations that open up new business areas.
Of course, retail is not alone in facing the challenges of the digital era.
Many organizations are confronted with the unparalleled speed change while wrestling with an application architecture that is monolithic and complex — and utterly ill-suited to dealing with digital innovation.
What does microservices mean in retail?
Microservices is a response to the challenges faced by these companies. Microservices develops further on the fundamental ideas of service-oriented architectures (SOA). The focus shifts from technologies with elaborate, cumbersome infrastructure components to small business-oriented independent services, loosely coupled via so-called RESTful Application Programming Interfaces (APIs). This architecture approach is made possible through the use of practices and techniques from the continuous delivery environment and the experiences of the DevOps movement.
The term ‘microservices’ was coined in 2011, in an independent workshop by software architects, including colleagues from Thoughtworks.
So what does microservices mean in retail? At Thoughtworks, we believe it’s an essential component of the digital shift we see in retail. Large German retailers have recognized that IT can no longer be seen as a cost factor. That’s why they’re investing in digital innovations.
As part of the trend, retailers are now seeing technologists as the critical ‘business enablers,' and they’re being tasked with working in ever closer collaboration with functions such as product, marketing, and operations.
Take the example of OTTO, which worked with Thoughtworks to rebuild its e-commerce offering, using microservices. OTTO aims to achieve one goal: to create a technological and organizational infrastructure that secures its competitiveness in the long term, even without knowing what exactly will be required in the future. The vision, which OTTO follows today, is that self-sufficient, cross-functional teams can respond adequately to any future requirements with speed and flexibility.
And it’s not just OTTO using microservices. Galeria Kaufhof's has revamped its online store using this approach, as is METRO Cash & Carry, as part of its digital transformation project.
Companies such as Amazon have always focused on the user experience and defined smaller IT products along the customer journey, which are developed by teams of experts and technologists. The teams implement a network of microservices that communicate with each other, and these teams have overall responsibility for the products, including their operation. It’s made possible through the use of cloud technologies and a ‘you built; you run it’ development philosophy.
Product orientation and microservices architectures have now also entered corporate IT organizations. In addition to front-end applications, backend systems also cut into products. A team that offers a pricing and shopping cart service in the corporate context — whether the shopping cart is filled by scanning at the cash desk or online — breaks through channel-specific boundaries and offers the customer a real omnichannel experience. One that finally delivers on the oft-heard promise of a guaranteed price, whatever channel the customer favors.
A version of this article was first published in published in Lebensmittelzeitung on December 1, 2017.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.