Living on the Edge
We have seen an explosion in all things digital over the last 2 years in retail. Expectations are changing rapidly; retailers need to keep up. But one change that is expected to be permanent is the increase in data processed at the edge.
Edge computing is all about shifting power and responsibility away from data centres out to where it’s needed quickly and reliably: nearer the customer and in store. It's often defined as how devices and processing power is “in close proximity to the last mile network”. In other words it’s putting the analytical ‘heavy lifting’ much closer to the source of the action, where IT and the physical world collide.
The intelligent edge is avoiding the limitations imposed by offsite processing, whether in data centres or cloud. Analytics capabilities that were restricted to on-premise data centres or any mixture of public or private clouds can now be relied upon where and when it matters most: much closer to the user.
We look at the “three Cs of the intelligent edge”:
Connect: Devices, people, or things connect via networks, generating exchanges which create new data.
Compute: This data is processed and new information and insight gleaned.
Control: These insights are used to drive actions, either associated with the devices at the edge or within the organisations (or people) responsible for them.
Companies and geographies are using edge computing to create smarter buildings, engaging workspaces, consumer personalisation and compelling consumer experiences. There is a widespread feeling supported by a common message at NRF, that retailers could and should be doing better to embrace opportunities aligned to the edge, and is notably behind other sectors such as FSI and healthcare.
The retail sector – no stranger to disruption – is about to feel this acceleration.
THE ADVANTAGES OF THE INTELLIGENT EDGE
There are many benefits, but here are five broad advantages of edge computing as we see it:
- Minimize latency. The more important a business function, the more critical it is that the compute element takes place at the edge, as any latency represents a level of risk
- Reduce bandwidth. Transferring big data back and forth in the cloud can use up colossal volumes of bandwidth and result in an associated cost upswing. Edge computing lowers bandwidth and expense, and increases efficiency.
- Improve security. Having to transfer more data across greater ‘distances’ inevitably introduces more vulnerabilities. Processing data at the edge (i.e. without having to transfer it) improves security, and helps maintain compliance when laws are looking more closely at the remote transfer of data.
- Improve reliability. Moving data around the whole time inevitable introduces potential for corruption. Edge computing improves Quality of Service; and as it moves the focus away from the core computing environment, it limits the potential of a single point of failure.
- Generate new insight. Greater volume and diversity of data sets necessarily improves statistical accuracy; using more data from the edge means better predictions and prognoses.
BENEFITS TO RETAIL
So what might all of this mean, for retail, in reality? At a high level it will help retailers operate more efficiently and effectively, reduce costs, generate more revenue, and feel more confident about security. Here are four real-world retail examples:
Customer Experience Instore
Connecting everything up holistically will revolutionise what we have come to expect from the store. Edge computing will accelerate the uptake of smart shelves and smart tags which can dynamically adjust pricing depending on input factors. The store will become fertile ground for data and insight harvesting enabling retailers to get quicker and more granular understanding of their customers and thereby optimise store layout and promotions accordingly.
Backroom and Supply Chain
Edge computing makes ‘real-time’ inventory management a reality and can support innovations in automation – for example, automatic reordering without the need for manual intervention or validation. The edge has the capability to put greater confidence into the supply chain.
New Revenue Streams
The Internet of Things represents a brave new world for consumer engagement and employee empowerment instore, which is expected to drive innovation and thereby new revenue streams. More reliable synchronization between channels and platforms should also promote better customer loyalty and new thinking.
Supply Chain and the Last Mile
In her NRF presentation ‘Tech innovation: What consumers want and where retailers should invest’, Michelle Evans, Senior Head of Digital Consumer at Euromonitor International identified that 40% of retailers see the role of IoT as increasingly important in delivery initiatives. The eCommerce acceleration over the pandemic has meant a huge increase in deliveries and pressure on logistics. Michelle’s research indicates that half of consumers would welcome innovation in delivery choices which might include automated and robotic delivery – more food for thought for loT technology.
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A FUTURE ON THE EDGE
The future of edge computing inevitably and inescapably will go hand-in-glove with the maturity and success of the Internet of Things. And while there has been an immense amount of talk and investment in IoT, many argue that the real impact of the IoT in retail has yet to be felt.
At NRF, CDW hosted a well-received session about future retail where we were joined by David Dobson of Intel as a guest speaker. David was very clear that the immediate opportunities around edge infrastructure and edge AI are very exciting, and talked through an example instore video cameras with advanced detection capabilities. But he also cautioned around the inestimable importance of getting the security piece right.
Companies that have implemented successful IoT projects have seen efficiency improvements, costs savings, and improved satisfaction scores for workforces and customers. IoT needs planning, and security, careful implementation and rigorous monitoring.
The Intelligent Edge is an exciting place, which places analytics and processing closer to IoT devices and the people that use them. It’s rapidly becoming the new battleground for customer satisfaction, which means the retail sector is taking note.
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This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.