This article was originally published in the Summer 2018 issue of The Record.
UK-based online fashion retailer Asos aims to become the world’s number one shopping destination for ‘fashion-loving 20-somethings’. If 2017 figures are anything to go by, the company is certainly well on its way to achieving that goal. Each week it added 4,500 new products to its website (there are 85,000 available at any one time) and a total of 15.4 million customers from around 240 countries generated almost 1.9 billion sales (a rise of 34% from 2016), while Asos’s website received more than 1.6 billion visits and its social media platforms amassed just over 20 million followers.
What’s the secret behind its success? Asos has replaced its monolithic core software with a new flexible and scalable e-commerce platform that uses microservices running on Microsoft Azure. This has enabled it to develop an omnichannel shopping platform that empowers customers to shop in their own language, choose their payment and delivery options, and receive personalised product recommendations via a mobile app.
Asos is not the only major retailer to have joined the microservices revolution. Amazon, eBay, fashion retailer River Island, and UK grocery store chains Tesco and Sainsbury’s have all replaced their monolithic platforms with microservices to deliver a seamless omnichannel customer experience.
“Today’s customers expect the same instant, personalised, connected and consistent retail experience whenever they interact with a brand – regardless of whether they’re shopping in a store, online, via a mobile app, or moving between channels,” says Vic Miles, director of Retail Technology Strategy at Microsoft. “If retailers truly want to deliver services to their customers in a fluid manner across all current and future channels, they must move away from monolithic legacy systems and on-premise multichannel platforms. Cloud-based microservices are the next evolution of enterprise systems development and they’re ideal for helping retailers create omnichannel platforms that have a full 360-degree view of all customers.”
Designed to provide a single specific business capability, microservices break down traditional monolithic applications into their core functions – such as search, product catalogue and payments. Each microservice is built and deployed separately with its own database, but all of them are connected to the retailer’s central IT system via the same application programming interface so they can work together on the cloud as a complete commerce solution. This means that retailers can simply plug in (or unplug) a microservice whenever they want to add (or remove) new customer-facing features or back-end capabilities, rather than having to rebuild their entire commerce system like they would with a monolithic commerce platform.
“Essentially, retailers identify what business capabilities they are missing and then plug in a microservice that fulfils that need – it could be anything from personalisation to inventory management, product catalogues, loyalty programmes, pricing and promotions, customer payment methods and fulfilment rules,” explains Miles. “Often, customers want simple services – for example, they may want to be able to collect loyalty points for a particular retailer through a third-party mobile app. It would probably be too expensive and time-consuming for a retailer to re-engineer a traditional monolithic commerce system to add this feature, but it would be easy and cost-effective to plug in a microservice from a third-party provider.”
Not only does using microservices make it easier for retailers to bring services to the market faster and scale their operations at a fraction of the cost, but they also create opportunities to develop new customer touchpoints.
“A retailer could ask a digital advertising agency to create advertisement boards with sensors that are connected to a set of microservices so that when a customer walks past, they automatically receive a personalised notification about a promotion,” says Miles. “This creates a new level of engagement that satisfies customers and sets the retailer apart from its competitors.”
Microsoft has built a broad set of cloud infrastructure services that can be used by its commerce partners to develop microservices that make it quicker, easier and less expensive for retailers to deliver the types of features, services, products and experiences their customers want.
“Our commerce partners can use the scale of Microsoft Azure cloud and the deep learning capabilities of Microsoft’s artificial intelligence (AI) platform to significantly enhance the commerce microservices they provide to retailers,” says Miles. “For example, if one of our partners has developed a microservice for inventory management, they could connect it to the Microsoft AI Demand service and use the contextual data it collects from the Bing Knowledge Graph – such as information about weather, upcoming events and trending topics – to make it even easier for the retailer to accurately predict customer demand for certain items.”
Currently, Microsoft is working with several independent service vendors (ISVs) in the commerce space. “Often, retailers need to work with a combination of different ISVs to get the capabilities they need to create a full 360-degree customer engagement program, which is why the microservice approach works so well,” says Miles. “Microsoft’s solutions and services are helping Adobe to provide digital asset management microservices, Episerver to deliver managed core commerce and personalisation services, and SAP to create services for enterprise commerce delivery.”
Miles predicts that microservices have the potential to completely transform the retail experience.
“Imagine if a retailer could give each consumer a single shopping cart and wish list that is automatically updated in real time whenever they pick products in stores or online,” says Miles. “Alternatively, retailers may be able to use microservices to duplicate the types of features customers can use online – such as adding or deleting items from their baskets, or adding coupons – in physical stores. We’re inviting our partners to use our AI and cloud solutions to develop the microservices that will make our vision of true omnichannel retail a reality for everyone.”
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