June 26, 1974 was a cool, early summer day in Troy, Ohio. At 8:01 a.m., a supermarket cashier scanned a 10-pack of Juicy Fruit gum for a shopper. The cost was 67 cents.
This simple transaction marked a retail revolution as this was the first item ever scanned with now ubiquitous UPC Barcode. One simple scan married data and experience, forever changing our relationship with inventory management, checkout speed, and pricing, thanks to streamlined processes.
I mention this bit of history because the retail and restaurant sector is in the very early stages of an even greater shockwave: serverless computing. I don’t expect that we will ever be able to look back at a specific “Juicy Fruit” moment for serverless, but rest assured the impact will be enormous.
As with barcodes, serverless—for most people—is more about understanding its impact than it is about being 100 percent fluent in the technology. Nonetheless, it is worth taking a moment for a quick definition of serverless computing, to serve as a knowledge base for how it will transform retail and restaurants.
Serverless computing isn’t technically serverless—data is still processed in servers—but the cloud-based servers are only engaged when a specific action is executed and only for the brief period that it takes to execute the action; this as opposed to traditional virtual machine software architectures. Serverless significantly speeds up the amount of time it takes to process each action, since the virtual chain of commands that must be followed is much shorter. This enables retailers to respond to market dynamics in real time by allowing for the integration of event-based inputs from point-of-sale systems, geolocation technologies and mobile apps to create a more efficient and dynamic workflow.
Specifically, serverless lets businesses:
- Much more effectively utilize, for in-store targeting purposes, the treasure trove of consumer data that they have amassed
- Implement testing and measurement incredibly fast—results can be observed in real-time
- Better manage inventory by adjusting in-store messages and promotions in real-time to address SKU management needs
- Turbo-charge customer engagement and increase customer satisfaction by presenting information and special offers tailored to the customer’s specific interests
- Boost sales through more targeted messaging that addresses the needs of individual customers
So, what does this look like in real life?
In the case of a national retail chain or restaurant, think about the cycle of seasonal merchandise or food, and the need to move a summer collection prior to the fall/winter items hitting shelves and menus. Using serverless computing, you can get those items to move much more quickly by leaning in to your sales strategy specifically through a faster and smarter use of your data. Imagine being able to identify customers within a defined radius of the stores who had purchased a similar item in the past and targeting those buyers with text and email messages. And in terms of stepping up the physical experience within a store to promote the desired items, digital signage in the stores could play videos of the piece that needs to be sold. Because of serverless computing, these micro-local campaigns can be integrated seamlessly—and quickly—into the stores’ business flow. Thus, the summer items are sold much more quickly, making way for fall/winter.
Buffalo Wild Wings uses a similar approach by deploying digital screens across more than 1,000 locations in eight countries, displaying messaging based on real-time data to increase sales and provide a better customer experience. For example, if wraps are not selling well at store A on a given day, digital message boards in that store are updated in real time to promote the wraps to customers. Meanwhile, customers in store B might be seeing specials for desserts, if that’s what that particular store needs to push.
A somewhat different approach is being taken by Nordstrom, which about two years ago developed serverless capabilities in-house. The company’s Technology Acceleration Group rolled warehouse technology, ecommerce, and physical retail into one platform, called Hello Retail allowing for a streamlined process in terms of introducing a new product into the retail space. By automating photographer registration and product creation through event sourcing, allows for smoother processes as well as establishing intelligent data updates.This bold, in-house approach isn’t for everyone, considering the level of management buy-in that is required and the need to hire a team of a-list tech talent that may or may not be available. But it is working for Nordstrom, however, as the company now has dozens of teams using serverless functions and on any given day has hundreds of millions of serverless invocations.
Looking at my crystal ball, I see 2019 as the year that brands get their data cleaned up and in order so that it is ready for the coming serverless wave. The following year, 2020, is likely to be one of testing as we head into 2021, the year that serverless computing will emerge as a must-have functionality for retailers.
While serverless computing might not have a single “Juicy Fruit” moment, its impact is likely to be even more revolutionary than the UPC Barcode. The bottom line: If you’re not thinking about serverless computing now, the revolution might pass you by.
Trent Dethloff is President and Co-Founder of HEROFi, which infuses physical places with the same speed, convenience, and relevance customers now expect from the digital world. He can be reached at email@example.com.