Will IoT Save Retail? No, But a Balanced IT Modernization Approach Can
I recently read an article asking, “will IoT save retail”? Indeed, there are several ways IoT can help address issues that keep many retailers up at night. From RFID to help with supply chain cost efficiencies to Beacons that serve to increase marketing and sales outcomes, IoT initiatives are being heavily invested in across retail segments. Moreover, IoT is just one example of an area where digital transformation can help retailers become more competitive and better match their products and services to evolving customer expectations.
Retailers today are facing several headwinds — from an increased interest in experiences over products to nimble market entrants that disrupt existing categories — that can only be solved by smart strategic thinking supported by equally savvy technology investments. Retail technology modernization projects that we at Flux7 have been involved with revolve around starting with the business challenge or opportunity and working backward from it to develop the best technology strategy to ensure business success.
Optimum Performance and Security
Amazon has found that every 100 milliseconds of downtime cost them one percent in sales and Google found that an extra .5 seconds in search page generation time dropped site traffic by 20 percent. Clearly, downtime and poor performance has a direct impact to retailers. So, for Rent-a-Center (RAC), a Fortune 1000 retailer, we implemented best practices to help insure their systems from within against risk factors that would attribute to poor – or worse – no performance online.
To do so, we executed on a Security by Design framework. As you would expect, RAC’s eCommerce site handles personally identifiable information and must meet PCI requirements. As a result, our first order of business was to ensure that our security frameworks were PCI compliant. Not stopping there, we also built CIS benchmarks and security best practices into our frameworks. After all, compliance is an outcome of good security, not the other way around.
Within the architecture we created natural separation of services, created segregation of duties, and put least privilege access in place. We also extensively used Docker which helps reduce the number of attack vectors because when containerized, the only thing exposed is the application, automatically minimizing security threats at the OS level and below. Automated key rotation and an advanced content delivery network for distributed denial of service attacks were also important components of our security strategy. Security is critically important as, according to research by The Ponemon Institute, the average consolidated total cost of a data breach is $3.8 million, or $154 per lost or stolen record containing sensitive and confidential information.
Innovation at the Speed of the Market
For a specialty retailer, we focused on helping increase the efficiency and effectiveness of the company’s Development team who is tasked with supporting the eCommerce site and store systems. To do so, we founded the project on DevOps principles, integrating automation wherever we could. As a result, everything was built as code. And we relied on the use of a Service Catalog for easy button creation of new services and environments. This use of automation streamlined processes, eradicated human error in repeatable tasks, and importantly eliminated downtime as developers no longer needed to wait for IT to create their environments.
Automation allowed us to optimize the developer workflow, which gave way to greater innovation, which could be quickly introduced to the team’s customers. Notably, we were able to radically improve innovation for this retailer while reducing bugs. This is attributable to our templates, automation and source code compliance system. Together they reduce the number of human errors that can be created in the development process while flagging problems much earlier.
While retailers are certainly embracing IoT as a technology to help them combat multiple market headwinds, a majority of retailers, according to Innovative Retail Technologies, are also planning to invest in cloud computing this year as a foundation to IoT and many other technologies. As retailers learn more about its strengths for availability and innovation, they begin to embrace cloud-based DevOps as a template for ensuring availability and consistency, providing a foundation for long-term impact to revenue, reputation, and customer lifetime value.
For further reading on Flux7’s work in retail:
- Compliant, Secure and Highly Agile E-Commerce: SAP Hybris in Docker Containers
- Amazon ECS Service Auto Scaling Enables Rent-A-Center SAP Hybris Solution
- Compliance in the Cloud Using Security by Design
- AWS re:Invent 2016: Deploying Scalable SAP Hybris Clusters using Docker
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