Retail-as-a-Service: Platform Innovation Enables Retailer-Defined Frictionless Commerce
In the reality of today’s disruption, the focus on rosy statistics about the growth of online eclipsing the power of the store experience is passe. With the value of the physical store experience fully entrenched as today’s shoppers look for experiential engagement that transcend channels, there is no question that consumer behaviors have changed for good with no end in sight to soaring expectations.
Siloed legacy systems are a key culprit the demise of a retailer facing this new reality, but what about those still struggling to reshape their business models with innovative technology and well thought out experiences? Retail-as-a-Service (RaaS) is the lifeline these retailers need to reshape their business with agility, innovation, and speed to market to save them from facing off with obsolescence.
From Channel-Based Sales to 360-Degree Frictionless Commerce
In the race to remain relevant by removing friction from customer journeys, many retailers are burdened by legacy store technology that makes a traditional point of sale (POS) lanes and hardware the center of the retailer’s universe. With only the option to bolt onto decades-old systems, these retailers are at the mercy of software vendors who control the applications that drive current commerce experiences in-store. Without control and direct access to the commerce services within their applications, retailers are led to deliver one-off digital initiatives to fill gaps in customer expectations. This focus on point solutions introduces regret spend and makes it very difficult to scale with precision and agility.
The real power to drive retail success hinges on continuous innovation that creates enhanced customer experiences as fast as customers can imagine new ways they want to interact with your brand. That means the ability to build and deliver unique customer experiences with speed and agility—from browsing to fulfillment—is now a critical competitive strategy.
Bottom line: With the impact of regret spend on fast-paced technology programs, retailers must now put sustainable enterprise architecture, innovation, and agility on their list of core competencies, alongside merchandising, sales, service, and traditional retail lines. To accomplish this, they need a commerce engine built for the intricacies of the store that provides the tools to uniquely design, build, and manage every customer engagement so they can differentiate their brand and respond to customers at every touchpoint.
Seizing Control with Retail-as-a-Service
Enter the Retail-as-a-Service (RaaS) platform, the engine that puts critical transaction processing services, including complex store processing, in the cloud to be used by retailers to build the digital experiences they need to be aligned to their business objectives. Since transaction processing is critical to efficient, long-lasting engagement but isn’t a differentiator, a RaaS platform based on a headless architecture empowers retailers to develop their unique commerce experiences iteratively and on-demand.
RaaS provides the answer retailers have been waiting for — efficient, scalable execution of transaction processing without being tied to a software vendor’s user experience. It’s how leaders like Amazon, Alibaba, and JD.com continuously iterate on customer expectations in contrast to most retailers who are stuck with miserly legacy systems and a painfully slow development process that restricts innovation to a single interaction point.
A RaaS platform finally provides forward-thinking disruptors with the tools to keep up with retail juggernauts. Making critical, commoditized store and omnichannel commerce functions readily available as microservices on a cloud-native architecture eliminates complexity and duplication from the retailer’s development efforts and enables agility and speed. RaaS gives retailers full control over the user experience and interface to build out digital experiences at scale. They can build once and deploy everywhere without ever rebuilding backend commerce functionality. This control eliminates one-offs and point solutions and replaces them with iterative delivery to avoid regret spend – a critical measure of operational success in today’s highly digitalized market.
The RaaS platform also solves channel conflicts that have confounded retailers since the introduction of Omnichannel. Retailers who own their unique differentiation across all digital fronts shift their focus from transactional checkout lanes to a truly frictionless customer journey where iteration and innovative development converge. While preserving scalability and reliability for high-volume transaction processing, retailers create unique, transformative journeys with speed and purpose.
What’s more, RaaS allows them to direct transformation investments into areas that support strategic growth initiatives and provide meaningful competitive differentiation. The Retail-as-a-Service ecosystem comprises a contributor/consumer model where leaders and innovators support the expansion of platform functions to meet the needs of their diverse commerce and digital engagement use cases. The RaaS platform expands as leading retailers contribute new functions and services required to support their unique journeys. All retailers can then consume these additional “commoditized” features from the platform without the need to own or maintain them.
The concept is similar to electricity as a “platform” that uses the same “engine” (grid) to power various “experiences” such as appliances, lighting products, computing devices. We don’t have to reinvent the powering service each time we plug in a new piece of equipment that runs on electricity.
Where Does Headless Fit In?
Digital experiences entail a vast number and variety of interaction points, but the real value to a retailer is the engagement, not commerce functions themselves. Think about how the same microchip powers an Apple or Microsoft laptop, yet each provides different user experiences and engagement. These technology powerhouses don’t focus on the chip or “engine” as a differentiator. Instead, the focus is on what they do with the chip by wrapping it in function and experience for their customer’s specific needs and priorities.
Retail today is no different. In traditional commerce systems, front-end functions are tightly coupled to backend processes and therefore can’t be seamlessly modified or shared across touchpoints. The inability for a retailer to use discrete elements of the commerce engine leads to redundant development of backend functions (such as search, add to cart, discount, void, etc.) as retailers work to deliver a specific interaction or touchpoint. Since these backend commerce functions are not differentiating, this leads to a waste of time and resources who are not focused on the competitive advantage that retailers are striving to attain.
Within the RaaS platform, the same transaction engine powers all customer experiences. For instance, in the case of curb pickups and linebusting, nearly all the functions used to manage, prepare, and engage with customers on a pick-up are the same services used to execute mobile linebusting checkout. Functions such as managing quantities, discounts, coupons, substitutions and voids, basket calculations, and more are used from the engine as retailers craft unique and relevant digital experiences that engage their customers based on the use case and objectives.
Unlike traditional legacy applications, a headless architecture separates the CX/UX layer from the backend/functional layer. Retailers can build a customer experience once and deploy it anywhere, which creates the opportunity to align it across all touchpoints without time-consuming, duplicate development efforts. New experiences are created more quickly and seamlessly transcend commerce, web, mobile, or emerging interface technologies (Voice, AR/VR, Mixed Reality).
Headless platform architecture ensures all CX is executed under the retailer’s control independently, allowing the use of the latest UX development tools to focus exclusively on only new, transformative elements of journeys. Retailer teams leverage the RaaS platform for all store and commerce engagement to build a digital experience once and deploy it everywhere.
With a headless RaaS platform, retailers own their unique customer experiences, innovate rapidly, and deliver “commerce of the future” capabilities to any channel or device based on their business and engagement objectives. This agile infrastructure supports continuous iteration and deployment for a true test-and-learn development environment under the retailer’s control.
Empowered, Proactive, and Impactful
Staying relevant requires retailers to look for opportunities to provide additional services and improve existing ones. They must proactively and continuously reinvent and innovate to strengthen connections between their customers and brand(s).
RaaS is the most streamlined approach for delivering new customer experiences and efficiently removing friction points in the customer journey. Amazon returns at Kohl’s, Kroger pick-ups at Walgreens, and full-service banking at Australia Post are a few noteworthy examples of alignments that enhance the customer experience by extending the reach of valuable services while removing friction from digital engagement journeys.
Retailers who want to lead disruption understand the need for independence from software vendors. They value a RaaS platform that allows them to target their investments to create unique, impactful experiences versus “commoditized” commerce functions that, while important in the context of the store, are table stakes that don’t differentiate or deliver value on their own.
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