How pure e-commerce players continue to thrive

Four steps are essential for CTOs of companies in the commerce sector, who want to be inspired by the success of digital players and evolve their strategies.

No one has gone unnoticed that the global COVID-19 pandemic has profoundly disrupted the retail and retail industry. Under health restrictions, traditional merchants naturally turned to e-commerce. For those who only had a light online presence or couldn’t handle heavy traffic, the task proved difficult and some signals that couldn’t spin fast enough were forced to close their doors. In the same sector, pure e-commerce players have largely benefited from this transfer of activity to e-commerce and this article explores how CTOs (Chief Technology Officers) of traditional companies can draw inspiration from the success of these digital players to rethink and develop your own strategy.

Behave like a tech company

Pure players often differ from traditional companies because of their constitution. In fact, many of them come from the world of start-ups that typically operate with small in-house teams of highly skilled engineers, which helps to create and embed a culture of autonomy, automation and agility within the company. Unlike traditional companies, technical teams are the heart of these pure players and help keep them at the forefront of technology.

Although large distribution companies have also invested in recruiting technical teams, they are often seen as business support teams rather than the company’s core business. As a result, budget levels allocated to IT are often limited, impacting the ability of technical teams to evolve and modernize their architecture and development process. The not negligible cultural impact must also be addressed. This means focusing on the following:

  • Invest in a highly qualified engineering team capable of laying the architectural and technical foundations to allow integrations with third-party and outsourced applications that are part of the technological landscape of traditional companies;
  • Develop an engineering culture to continually build, run and improve applications;
  • Drive deeper business integration and faster software delivery cycles.

A first concrete organizational step in this approach is to set up stable product teams dedicated to each application, rather than transitional project teams that lack mid- to long-term visibility and work on multiple applications at the same time. From an architectural perspective, a solid API and Continuous Delivery strategy, as well as a cloud strategy, will provide the foundation for greater agility.

Agility, essential for e-commerce

Agility is essential in this industry, where many retailers sell multiple brands to multiple customer segments and predicting customer behavior becomes nearly impossible. This is even more true for online retailers who offer new ranges very frequently.

Many e-commerce players have adopted the so-called “headless” commerce architecture, allowing for greater agility and flexibility. The concept consists of decoupling all business services from the user interface (UI), then assembling them to obtain a UI that is customized and adapted to the uses of consumers. Applied to sales systems, it offers a set of reusable services that can be operated by an in-store point of sale system, a mobile app or an online store, all in an optimized user interface specific to each one. The result: reduced friction throughout the purchase journey that delivers a seamless customer experience and reduced costs for retailers.

In addition to e-commerce, this approach, which focuses on creating and composing services, also remains valid for promoting overall IT agility and implementing long-term strategies aimed at dismantling all monolithic applications.

Speed: a mission essential for companies – and a compromise to be found

Speed ​​counts a lot in all phases of a company’s activity and this is even more true in highly competitive sectors such as commerce, where it won’t be long before the competition can simply copy a new idea or a new product. Therefore, marketing teams must be able to quickly try out new campaigns.

When using cloud technologies, pure e-commerce players typically reduce portability and replace low-level (virtual machine) architectures with higher-level cloud-native services to meet this need for speed. This approach allows technical teams to focus on business code rather than building infrastructure or managing capacity. When using cloud technologies, pure e-commerce players typically reduce portability and replace low-level (virtual machine) architectures with higher-level cloud-native services to meet this responsiveness need. This approach allows technical teams to focus on business code rather than building infrastructure or managing capacity. These top-level services are often specific to each cloud solution (even if some use open source standards, for example). This pragmatism favors the delivery in production of new functionalities that will allow, for example, to generate revenue for the company in the short term; if there is a need to change an underlying non-standard technology, the cost of the change will be accepted.

Traditional companies rarely calculate the true engineering cost of portability. A concrete step towards moving in this direction is to adopt an approach that considers the global cost of architectural decisions made under the banner of portability, throughout their life cycle. It is critical to ask questions such as: “What is the additional cost in terms of engineering and support for this portability decision?” and “What would be the cost of reversing at a later stage rather than investing in this area from the start?” “.

Drive innovation by enabling better data access and management

Whether to optimize logistics or to manage dynamic pricing, for example, machine learning is at the heart of many business processes. In this context, guaranteeing democratized access to this data and optimizing its use are two fundamental factors for the development of pure players in the e-commerce sector. By decentralizing and allowing all branches (eg marketing, supply chain) to access data through simple APIs, pure players enable innovation at the pace of each area of ​​the company. This requires identifying and establishing a central, group-level team dedicated to machine learning that will work with local teams from each line of business across the company’s domains. This step is necessary to evolve the company’s machine learning and be able to benefit from the positive results these advances bring.

The journey that pure e-commerce players take when adopting new technologies is very similar to that experienced by companies. Technical debt is also the reaction of very rapid growth. Most of the pure players in the industry have managed to evolve and adapt, it’s time for traditional companies to do the same.

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