Solace CTSO shares how EDA can transform online retail

The online retail landscape has become more competitive, and customers want more out of their shopping experience.

Today, many businesses face an uphill battle when it comes to capturing consumers’ attention, as there are so many online marketplaces, brands, and items to choose from. In addition to this, the volatile economy could shake the e-commerce market at any time.

How then can e-commerce businesses remain resilient amid these recurring challenges? Frontier Enterprise spoke with Sumeet Puri, Chief Technology Solutions Officer of middleware maker Solace, on how the use of an event-driven architecture (EDA) could solve many retailers’ headaches.

Year end is usually when more sales events occur, but inflation and lower consumer confidence could make it more challenging for retailers. How can technologies like event brokers and chatbots help them stay competitive?

Event brokers and chatbots have few things in common: Both help retailers by eliminating any friction during the online and offline shopping experience, improving customer experience (CX), and handling demand surges during the holiday season.

However, there are differences too. When consumers are shopping online, chatbots can resolve queries and interact with customers in real time, emulating the shopping experience in a physical store.

In contrast, event brokers and an event mesh serve as a foundational nervous system for retailers, enabling the integration of order management within the supply chain and providing real-time access to inventory management and point-of-sale (POS) information. This level of integration and streamlining of processes allows retailers to react instantly to common actions, such as a product being added to an online shopping cart or a transaction being made. These actions are known as events, and they provide retailers with valuable insights and analytics beyond what a chatbot can offer.

Retailers can leverage technologies such as event brokers and chatbots to gain real-time insights into customer behaviour, both online and offline. This data enables them to make informed business decisions and provide more personalised experiences, ultimately improving customer satisfaction. In Southeast Asia’s highly competitive e-commerce landscape, a seamless user experience is essential for capturing the largest share of the market.

During the busiest shopping season, retailers that rely on batch-oriented processes and lack real-time visibility into inventory, customer behaviour, and the supply chain may struggle to meet customer expectations and avoid downtime. To stay competitive, it’s essential for retailers to have a real-time view of their business with event brokers. This provides a significant advantage that allows them to quickly adapt to changes, make informed decisions, and meet customer demand with ease.

How can using an omnichannel approach help the retail sector, especially during these times? What can retailers do to create a unified, consistent, and real-time experience for customers?

In a rapidly growing digital consumer market, with Southeast Asia’s population of digital consumers projected to reach 370 million by end-2022 and 402 million by 2027, retailers are expected to meet ever-increasing customer demands for a seamless omnichannel experience. Achieving this requires an event-driven foundation that integrates all touchpoints across the retail ecosystem, from online platforms, physical stores, IoT applications, warehouses, to main offices, enabling retailers to receive and transmit real-time information or events. Sustained online shopping activities highlight the importance of this approach.

An event mesh can serve as an architectural layer that connects and dynamically routes events to various systems and services across different environments and channels. This creates a continuous flow of information that enables retailers to become more agile and responsive to their customers’ wants and needs in real time. Global retailers have leveraged the event mesh to provide real-time order tracking, loyalty management, and other CX functions by moving POS events across applications, clouds, and ERP systems like SAP. By achieving paperless transactions across channels and kiosks, retailers can deliver a more seamless customer experience.

Sumeet Puri, Chief Technology Solutions Officer, Solace. Image courtesy of Solace.

With VR shopping experience on the horizon, the event-driven approach becomes increasingly crucial for achieving hyper-personalisation in a 3D environment, while maintaining a seamless omnichannel experience. Digital twins and avatars act as both consumers and producers of these filtered, relevant event streams across various channels, as well as among supply chain, order management, loyalty, inventory, logistics partners, and other systems.

What are some of the challenges faced by retailers today in achieving great omnichannel outcomes?

Retailers face a major challenge when demand suddenly exceeds supply, with both online platforms and physical outlets experiencing immense growth. To accommodate the large influx of traffic, particularly during peak periods like sale seasons, retailers need to ensure that their online platforms can handle the demand and that they can fulfil the resulting orders.

In the same vein, the lack of real-time inventory visibility across channels is a major hurdle, especially with customers increasingly expecting options like store pick up and kerbside delivery. Retailers need to have a real-time view of store availability or warehousing to offer these services effectively.

The key to reducing costs through spot pricing and utilising warehouse capacity is having real-time visibility of the supply chain. Retailers can achieve this by aggregating customer interactions both online and in-store, enabling them to gain near real-time insights that can lead to reduced bracketing and improved profitability.

Efficiency of order fulfilment is another challenge. Take quick service restaurants as an example: For such businesses, identifying the location of customers or delivery persons can help restaurant staff prioritise orders, rather than using a first-in, first-out approach. This, in turn, drives better efficiencies and fresher food. For apparel retailers, bracketing and merchandising are also huge challenges, resulting in wastage and margin loss, due to a lack of understanding of customer behaviour by store area or served area.

With an omnichannel retail platform, retailers can also tap into customer insights generated from event streams. For example, each customer interaction point – such as orders, wish lists, payments, and updates to delivery address, customer loyalty point and tier updates – can be modelled as events. When these events are set in motion in the event mesh, ops teams and insights systems can be updated in real time across channels, resulting in a better customer experience. The ability to handle these events in real time across channels provides retailers with the agility needed to meet their customers’ needs quickly and effectively.

In our previous interview, you shared that Solace is seeing some experiments with metaverse applications and linking them to existing apps via an event mesh. Could you talk more about this? How have those experiments turned out?

Although there are next-generation VR kits in development, the metaverse is still in its early stages. Mainstream retailers are only beginning to explore this new frontier, testing the waters before diving in fully.

At this moment, augmented reality is gaining traction with retailers, especially with shoppers actively returning to physical shops in droves. In the past year, we have witnessed the industry leverage AR in stores in some really interesting ways. For example:

  • Nike lets shop visitors scan QR codes to unlock virtual boxes that contain 3D-scanned assets taken from Nike’s archives.
  • Technology firm Reactive Reality connects in-store smart mirrors with the online actions of customers. This enables shoppers to view and try on clothes with a personalised avatar on their mobile devices.

Slowly but surely, the “be your own model” trend and possibility is increasing, where people can try on apparel virtually in the metaverse.

These AR and VR innovations are newer channels and should not develop as silos. Implementing an event mesh can help integrate them to produce and consume similar event streams across various channels, including POS and e-commerce, as well as CX and marketing tools.

Any forecasts on how the event-driven architecture space is going to develop during the next couple of years?

There is no doubt that event-driven architecture will continue to grow in market adoption over the next few years. A recent Solace global survey of 840 C-suite and IT management respondents showed that 85% recognise the critical business value in adopting EDA, including improved application responsiveness and optimised customer service delivery using real-time information.

This shift towards EDA is also being echoed across the industry, which underscores the importance of this technology in this new era. At the 2022 Gartner Symposium, Yefim Natis, a distinguished analyst, spoke about the concept of event-driven “thinking” – where IT is changing from being the custodian of data to an enterprise’s nervous system. He also stressed how, in this fast-paced world, it is no longer enough for enterprises to just be ready to change. Instead, they need to be operating in real time to stay competitive, and that requires them to be event driven.

Companies need to be event driven and operating in real time to stay competitive. Image courtesy of Gartner.

Similarly, at the recent AWS Reinvent conference, the Amazon CTO discussed how “Synchronous is an Illusion.” He explained that the world, as well as systems, are asynchronous, and he used the example of customer service in a restaurant to illustrate the point. This idea of synchronous versus asynchronous processes has been previously described as the “Waiter Pattern” by myself and others.

Fortunately, with the current speed of networks and the growing need for real-time processing, event-driven thinking is now becoming mainstream and is here to stay. The increasing adoption of 5G over the next couple of years will be influential for improved connectivity and network efficiency. The event mesh, as well as the event portal as a capability, will enable retailers to make sense of the events circulating on the mesh, connecting businesses and stakeholders more closely than ever in a rapidly digitalising age.