Why simply surviving the next demand spike is not ... - Retail …€¦ · The retail calendar is full of spikes: Black Friday, Christmas, January sales, Valentine’s Day, Easter,

Success beyond scale

Why simply surviving the next demand spike is not enough.

Produced by Andrew Jutton Principal Consultant

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Why do so many ecommerce businesses fail at scale?

Why do retail websites fall over in the face of demand that they should have anticipated?

The retail calendar is full of spikes: Black Friday, Christmas, January sales, Valentine’s Day, Easter, Hallowe’en, Golden Week, Singles Day, etc. Yet, too often, simply surviving the next spike dominates IT thinking for ecommerce leaders.

Strategy has boiled down to survival, and avoiding headlines like those suffered by Dell, Currys PC World and Macy in November 2016.1

There is good reason, of course. Not only does a crash mean lost sales in the busiest hours of the year (online firms can take 10% of their annual sales on Black Friday alone), it also means angry and frustrated customers, lost loyalty and a bonus for competitors.

Even poor performance, short of a complete crash, badly impacts business. Research by Dynatrace found that 75% of mobile users would abandon a retailer’s mobile site or app if it was slow or prone to crash. Nearly half of adults would shop elsewhere if a site failed to load in three seconds.2

But, is survival sufficient? Savvy shoppers are demanding more:

• 41% of consumers practice showrooming; combining the online and in-store experience3

• 89% are influenced in their retailer preference by the availability of real-time information on product availability4

• 95% of millennials want brands to “actively court” them5

As CTOs continue to scale up to meet anticipated demand, it can be difficult to step back, take a breath and realise that focusing solely on scale is a limiting strategy. Scale is simply the entry price in today’s ecommerce world.

AT AMIDO, WE WORK WITH LEADING ECOMMERCE FIRMS, HELPING THEM TO BUILD AND OWN SUSTAINABLE COMPETITIVE ADVANTAGE BY EMBRACING THREE ELEMENTS:

RESILIENCE AT SCALE

FLEXIBILITY FOR THE FUTURE

DIFFERENTIATION OF EXPERIENCE

In this paper, we explore how forward-thinking businesses are addressing these issues in their search to meet customer expectations and to build lasting advantage.


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Why does ecommerce fail at scale?

Every year, the post-Black Friday press is the same: a string of premium brand websites crashed, losing sales in the most valuable hours of the trading year. Angry and frustrated customers take to social media to complain, then take their custom elsewhere. Reputations and brands are damaged. Sales and loyalty are lost.

This year, it was Dell, GAME, Currys PC World and Macy’s.6 Problems were reported at retailers New Look, River Island and Missguided,7 while cash-back site Quidco8 and the Royal Mail9 also encountered issues.

The relative novelty of Black Friday attracts the media, but the retail year is full of spikes to survive; from New Year sales, through Valentine’s Day, Mothers’ Day, Fathers’ Day and a string of national and international festivals right round to Thanksgiving and Christmas again.

None of these events is a surprise. So, why can’t businesses cope with the demand they stoke?

The problem of scale is often one of design

Often a system’s inability to cope with demand spikes is rooted in its outdated architecture. Many of today’s leading, enterprise-grade, ecommerce solutions are built to a traditional software architecture intended for an era before the massive scale and flexibility of cloud computing.

Commonly known as monolithic architecture, this traditional approach evolved to make best use of the

technology of its age. A monolithic design comprises a self-contained, interconnected piece of software that provides a single, comprehensive solution covering every aspect of ecommerce from browsing to payment and delivery.

An monolithic application puts all its functionality into a

SINGLE PROCESS

And scales by replicating the monolith on multiple servers

Today, such an approach is widely considered an “anti-pattern”, the antithesis of good software design. However, it has its place and can be ideal for a single, well-resourced implementation. Written as a single piece of code, every step can be optimised to take advantage of its intended hardware.

That said, the monolithic approach was never intended to scale up to today’s levels of demand and the architecture’s original strength of cohesion has become its weakness. It lacks the flexibility to meet varying demand by scaling up and down quickly and easily. Components cannot be scaled independently of each other and the only answer is to deploy ever larger servers, increasing CPU, memory and storage.


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Platform lock-inThe monolithic approach is inflexible by design and inevitably requires a long-term commitment to a particular technology stack.

As a result, it can be difficult to take advantage of emerging technologies (frameworks, programming languages, etc.). For example, adopting a newer platform framework might require you to rewrite the entire application – a decidedly risky undertaking.

Vendors often require any changes to be made by their own or nominated consultants and, once you they have created your “non-standard” deployment, you are locked into expensive re-writes every time the underlying platform is updated.


THIS SCALE UP APPROACH IS INFLEXIBLE AND INEFFICIENT:

MORE PROCESSING POWER FOR, SAY, THE TRANSACTION ENGINE

MEANS WASTE AND REDUNDANCY IN OTHER AREAS: THE SHOPPING

BASKET, DISCOUNTS OR DELIVERIES.

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An increasingly complex code-base

Over time, and with no clear separation between different functions within the ecommerce platform, a monolithic application can become difficult to understand and modify. As a result, the pace of development slows. And, because it can be difficult to understand how to correctly implement a change, the quality of the code declines over time, making failures more likely.

Because services cannot be deployed independently of each other, it becomes difficult to practice continuous deployment of the application. Innovation and the deployment of new features slows down.

Supporting different clients – such as desktop browsers, mobile browsers and native mobile applications – is also difficult. Just think of the problems some major brands still have in providing an acceptable mobile experience.

Inevitably, there are diminishing returns and an increasing resistance to further development. If every minor change requires updating the entire code-base and re-deploying the solution, that can mean taking your site down for 12-15 hours or more. The opportunity cost of lost revenue quickly becomes a serious barrier to innovation. And, of course, the risk of error is large.

The natural constraints of a Scale Up approach

Within a monolithic design, hardware constraints are inevitable.

Data tiers have traditionally been difficult to scale, because a single database stores state for every part of the solution: discounts, delivery, inventory, shopping cart, etc. Monolithic design typically lends itself to having a single database that represents the entire application but, as a result, the database becomes a single point of failure.

In recent years, the capacity of discs has improved. More data can be stored, but it takes an unavoidably longer time to read and this creates a bottleneck that CPU can’t solve.

Geographic distance matters, too. As a retailer, your ultimate goal is to deploy your application closest to where your customers are situated, but monolithic design makes this more difficult. It is more resource intensive and operationally costly to achieve. If a customer in Australia is pinging your server in London, latency soon becomes an issue. Performance and the customer experience degrade.

SCALE-UP

Risking catastrophic failureA further consequence of monolithic design is that when one thing fails, everything fails. Implicit in the approach is recognition that any failure will be a catastrophic event. Catastrophic events result in expensive downtime.

Monolithic architecture is, simply, not the best fit for today’s high volume, high demand ecommerce environment.

A different approach is needed.


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Cloud-first design

Cloud computing enables a very different approach to the design, development, operation and maintenance of software – a cloud-first approach.

Traditional ecommerce architecture is grounded in monolithic, server-first thinking. Even as vendors port their solutions to the cloud, the core architecture often remains monolithic.

However, cloud-first thinking enables microservices architecture, the opposite of the monolithic approach. Microservices deconstruct the

overall system design into a set of manageable, independent and loosely coupled services. Each service is responsible for managing a part of the overall ecommerce business domain.

As a result, services can be resourced and scaled independently of each other.

Rather than Scale Up, a microservices, cloud-first design will Scale Out – adding larger numbers of smaller servers where required, rather than fewer, larger ones supporting the entire edifice.


CLOUD -FIRST DESIGN

SCALE-OUT

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Designed for failure

Software should be designed and built to anticipate and handle failure gracefully. Designing software for the cloud requires a different approach to traditional software architecture. It requires that the possible unavailability of services, servers and network failures must all be factored into the design to avoid possible downtime.

The microservices approach of splitting the architecture into separate services can have a positive impact on availability. If the database in a monolithic solution went offline, the whole site would be offline.

By contrast, in a microservices design, if, say, the discounts service went offline then only that functional area would be offline; the rest of the solution would remain available for the customer. As a consequence, a cloud-first architecture can be more robust and lead to greater overall uptime and availability for the ecommerce site.

Agility and efficient design

Being independent, individual services can be developed and deployed in isolation, providing a significant reduction in “time to market”.

This independence also makes each service replaceable, bringing the freedom to “plug-and-play” with a mixture of custom-built and off-the shelf services.

In a commercial environment, this means a firm can deploy its resources to develop in areas where it is expert, and buy services in areas where others are experts. You might design your shopping cart service, because this is an area of customer experience where you want to differentiate and excel, but you might opt to purchase a carrier management or warehouse management system and simply plug it into your architecture.

A modular approach means you can choose the best solution for each service, deciding whether to rent, build or buy for the best return at every point.

It provides agility too; the ability to adapt as the business environment evolves.

Improving local performance

Microservices also make it easy to service and resource international customers. You can run separate instances of your site in different regions: Australian shopping requests no longer ping your UK servers. And, that means you can flex to meet local demand. If Singles Day (November 11th) is an important date for you, scale up your servers in China. Then scale them down and switch your resources to the US for Thanksgiving.

IMPORTANTLY, AS WE DISCUSS IN THE NEXT TWO CHAPTERS, WITH A MICROSERVICES APPROACH YOU CAN ALSO TAILOR YOUR SERVICE TO LOCAL NEEDS. IT BECOMES EASY TO DEPLOY A DIFFERENT PAYMENTS SERVICE OR INTEGRATE WITH A NATIONALLY-FAVOURED COURIER TO MEET THE EXPECTATIONS OF A DISTINCT REGION.

Using the cloud greatly simplifies global deployments of software and, with the right design, even if your service became unavailable in a whole continent, your business continues to operate elsewhere.


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Cloud-first for scalability, availability and agility

In contrast to the traditional thinking of monolithic, server-first architecture, a microservices, cloud-first design offers granular, cost-effective scalability, higher availability and much lower barriers to innovation.

At Amido, we see many ecommerce firms now adopting this approach, isolating individual areas of functionality from the monolith one at a time and creating new service boundaries.

Cloud-first thinking gives ecommerce firms the ability to cost-effectively scale – up or down – at a service-geography level, well beyond the limits of traditional, monolithic, server-first architecture.

“When delivering transactional systems at hyperscale, understanding your enterprise’s target service architecture is only half the battle; the war is won by knowing how to break apart your existing monolithic systems and phase in your new services in while keeping the lights on in the meantime. Like any large scale re-platforming initiative, life gets materially more complicated before the benefits are fully realised. Amido are committed to helping our clients on this complicated journey.” Simon Evans, CTO, Amido

WHAT ARE MICROSERVICES?

Microservice architecture is an approach to software design that breaks down large projects into a set of manageable, independent and loosely-coupled services. Each microservice manages a part of the overall ecommerce process and is reusable across different clients such as browser or mobile-based applications. Individual microservices can range in size and scope from a small, closely defined and discrete business task, to a whole area of operation such as Delivery or Discounts.

A microservice architecture offers significant advantages over traditional, monolithic applications. Each service can be designed, developed, tested, deployed, managed and maintained independently of the others. It is an approach that can dramatically reduce the time to get new features into the market. The result, if designed well, is a more scalable, resilient and flexible solution that lowers the barrier to innovation by removing any long-term commitment to a particular technology stack.

A microservices approach allows you to build the services you are expert in and rent or buy services where you are not. This lets you focus on your unique areas of competitive advantage, helping you stand out from competitors.


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Flexibility for the future

The ability to scale seamlessly, up or down, is not enough for success in today’s ecommerce environment.

Retail ecommerce continues to grow in size and importance. As a share of total retail sales, ecommerce is forecast to rise from 8.7% of global retail sales in 2016 to 14.6% by 2020.10 In the UK, one of the world’s most mature ecommerce markets, 27% of retail sales now happen online.11

But, the pace of change is accelerating too with more confident, more savvy, online consumers demanding more features and better service. The growth of omni-channel and trends like showrooming (checking competitors’ prices and availability online while standing in your store) means that ecommerce is even more important than the visible, online revenue it generates. Sixty-eight per cent of millennials expect an integrated and seamless experience regardless of channel. That’s not just between PC and smartphone, but between online and in-store, too.12

In such a fast-moving environment, it is critical for retailers to be flexible and responsive to change, whether that change comes from customer demand or from the firm’s desire to seize unexpected opportunity.


2016

2020

8.7%

14.6%

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Traditional ecommerce solutions are constrained

Agility is vital in today’s ecommerce environment. Companies want to develop and deliver new capabilities as quickly as possible, focusing their time and money on the problem at hand. This requires a responsive and flexible platform that allows for targeted development.

To meet market demand and stay ahead of the competition, you want to avoid the added complexity, cost and time required to apply changes to a monolithic application.

Yet, many large retailers find they have no choice. Traditional, enterprise-grade ecommerce platforms often rely on a code-base written, in the pre-cloud era, for a single, monolithic installation. Such designs often prevent any meaningful flexibility or customisation and customers find themselves locked into the vendor’s platform. Typical experiences include:

• The vendor requires that you pay them to design the architecture you need;

• The vendor requires that you only work with nominated implementation partners;

• The software only works effectively with other software from the same vendor. There is extremely limited interoperability.

There are no minor tweaks for such an architecture. Even small changes can require an update to the entire code-base and the associated downtime of a complete redeployment.

If every lost minute costs thousands of pounds in sales, that’s a serious disincentive to change.

“THE TECHNICAL CONSTRAINTS

THAT TRADITIONAL E-COMMERCE

VENDORS PLACE ON RETAILERS

ULTIMATELY IMPACTS THEIR

ABILITY TO PROVIDE AN

ENGAGING AND COMPETITIVE

CUSTOMER EXPERIENCE AT

GLOBAL SCALE. RETAILERS

NEED MORE CONTROL OF

THEIR DIGITAL CHANNEL THAN

A FINISHED PRODUCT CAN

POSSIBLY GIVE THEM, NO MATTER

HOW DEEP ITS CUSTOMIZATION

CAPABILITIES ARE. HYPERSCALE

SERVICES HOSTED IN THE CLOUD

REMOVE THESE CONSTRAINTS

AT A COST COMPARABLE

TO IMPLEMENTING BOXED

PRODUCTS. FURTHERMORE, THE

USE OF PLATFORM AS A SERVICE

CLOUDS KEEPS THE COMPLEXITY

OF SUPPORT DOWN TO A

MINIMUM.”

SIMON EVANS, CTO, AMIDO


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Flexibility for customer delight

Mobile commerce is huge. Nearly half of the UK’s online retail sales come via a mobile device13 and top retailers like Argos and Tesco now get more traffic from mobiles than from desktops or laptops.14

Today, mobile-first is the watchword for ecommerce design yet retailers initially struggled to deliver mobile-ready websites. Even now, many sites would be better described as “mobile-compatible” than mobile-first.

ACCORDING TO GOOGLE, 40% OF CONSUMERS WILL LEAVE A SITE THAT TAKES LONGER THAN THREE SECONDS TO LOAD, BUT THE AVERAGE LOAD-TIME FOR A RETAIL MOBILE SITE IS STILL 6.9 SECONDS.15


RETAILERS HAVE STRUGGLED TO MEET CONSUMER DEMAND

FOR AN EFFECTIVE MOBILE EXPERIENCE. HOW WILL

THEY COPE WITH WHATEVER INNOVATION NEXT CAPTURES

CONSUMERS’ ATTENTION?

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Possible candidates include the following:

REAL-TIME CUSTOMISATION

ONE OF TEN ECOMMERCE TRENDS FOR 2017 AS PREDICTED BY ABSOLUNET,16 REAL-TIME CUSTOMISATION WILL BUILD ON THE PERSONALISATION ALREADY SEEN ON SOME SITES TO DELIVER INSIGHTFUL, INTUITIVE, REAL-TIME RECOMMENDATIONS.

In real-time customisation, every visit to your retail site will be different, each deeply personalised and informed by previous visits and other, contextual personal data.

Achieving this in a way that is neither intrusive nor irrelevant will require the ability to connect disparate data sources from both sides of the corporate firewall.

How easily can your ecommerce platform integrate customer insight from other departmental siloes or from external sources like social media?

CONVERSATIONAL COMMERCEA phrase coined by Uber’s Chris Messina, conversational commerce uses chat, messaging and other natural language technologies to enable interaction between consumers and brands.17 The brand-side interaction can be driven either by human users or bots. As Messina foresees:

“The net result is that you and I will be talking to brands and companies over Facebook Messenger, WhatsApp, Telegram, Slack, and elsewhere before year’s end, and will find it normal.”18

An estimated 1.4 billion consumers used mobile phone messaging apps last year,19 but the concept reaches even wider than that with the emergence of intelligent assistants like Cortana and Siri.

Intelligent home devices like Amazon Echo are taking the concept further still. Amazon recently partnered with Capital One to enable customers to check their bank balances and make payments using their voice.20

According to Absolunet, users of live chat spend an average of 5% - 30% more and the buyer conversion rate is five to ten times higher following a chat session.21

How easy would it be to integrate either human-to-human messaging or intelligent chat-bots into your existing ecommerce infrastructure?

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PROGRAMMATIC COMMERCEHere, regular, everyday products are ordered either automatically, or by a simple, low-involvement technology. To be effective, the technology has to be simpler (or more appealing) than writing the item onto the bottom of your shopping list. With Amazon Echo, you can ask the device to add toothpaste to your shopping list. The Amazon Dash button22 is a low-cost, product-branded device that you stick around the home. For example, stick an Aerial washing powder button on your washing machine. When you find you’re running low on detergent, simply press the button and it’s added to your shopping list.

Waitrose’s pilot of the HiKu device23 combines the options of voice-ordering or bar-code scanning.

Such devices bring us a step closer to the mythical, milk-ordering fridge, but again, how will your current platform interoperate with these services?

OTHER ADVANCES

• AR and VR – a number of retailers are experimenting with augmented and virtual reality technologies such as the Microsoft HoloLens to demonstrate their products in context24

• Touch – Fashion retailer Farfetch recently launched a touchable video ad – touch any products you like in the video and they are waiting in a basket for you at the end.25

• Geolocation – many retailers are exploring the possibilities that come with knowing a customer is near (or in) your store.

360

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Flexibility for international expansion

Ecommerce is international. Shoppers can reach your .co.uk site from anywhere in the world. If you wish, you can register a “local” domain name, like .com.au, and run it from your UK data centre.

But, performance quickly becomes a problem. If every web request pings around the world, the user experience soon slows to an unacceptable level. The problem is exacerbated for more complex designs, for example, if your site is hosted in London, but translation is outsourced to a service in the US.

This latency might be invisible if you ping your site from Stratford, but intolerable for a shopper in Sydney.

Retailers with a serious strategy for international expansion soon find they need to replicate their site more locally, perhaps in regional data centres for the US, APAC etc.

Beyond simple technology issues of performance, international ecommerce also requires localisation. But language translation and local currency pricing is only the beginning.

Local sales tax

Retailers expanding internationally sometimes find their existing platform simply can’t handle the requirements for local sales tax. Whereas VAT has a similar form all across the EU (albeit with different rates for different goods), sales tax in the US varies in structure and rate at a state and even at a county level.

Integrating with local solutions, such as point-of-sale for physical stores, or accommodating international requirements within a monolithic, but national, design can be expensive problems.

Locally preferred payment methods

Britain is at ease using credit cards for online payments. Germany is not. The payments market in Germany is dominated by bank transfers. In other markets, cash on delivery is preferred (half of Amazon’s customers in India pay cash-on-delivery26, 80% of online sales in Russia are CoD27). Elsewhere, even across Europe’s single market, there are nationally preferred cards and payment methods.

Would every new market require an expensive update to your payments engine?


BritainCredit cards

GermanyBank transfers

IndiaCash on delivery

RussiaCash on demand

EuropeNationally preferred cards and payment systems

Locally preferred payment methods

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Deliveries and logistics

Different countries favour different delivery methods. Sometimes, it’s as simple as using the local, market-leading courier. Other times, you need to facilitate cash-on-delivery (as above) or navigate opaque address conventions. Expectations of acceptable delivery times vary locally, too.

To delight local customers in a targeted market, sellers prefer to plug in locally relevant delivery services to their ecommerce infrastructure.

Again, how easy would it be to integrate local logistics with your existing ecommerce solution?

Agility for the unforeseen

Retailers locked into a monolithic software package often find their ability to adapt to international or emergent requirements is restricted.

It can be hard to provide consistent performance around the world when you operate from a single, core database. It can be prohibitively expensive to adjust your offering to local needs, especially where required downtime can cost tens of thousands in lost revenue.

And, it can be impossible to innovate to meet customers’ expectations. ASOS CTO Bob Strudwick described this situation in a recent Microsoft TechDays Online video:

“The software stack that had taken us from the first day of trading was no longer the thing that was going to take us to the next stage of ASOS’ growth. It was a decent platform, but it was increasingly hard to innovate. It was increasingly hard to introduce new capabilities. So, we took the decision across ASOS to start again.”28

The solution for many firms like ASOS has been to move to a cloud-first, microservices approach.

This can be done in a low-risk, incremental way. Firms have prioritised the services that give them greatest concern and built additional, replacement services around the monolithic core of their existing platform. In this way, they can replace inflexible services one by one, reducing the risk of a wholesale replacement and design their own ecommerce solution, in the cloud, on their terms.

Cloud-first thinking gives ecommerce firms the flexibility to delight customers with great services and consistent performance, wherever they are. It delivers agility beyond the capabilities of traditional, monolithic, server-first architecture while also reducing the risk of change.


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Customer Experience – the last differentiation

The growth of ecommerce represents a fundamental change in consumer behaviour.

Step back even a decade and success in retail was all about product range, quality, price and service.

Ecommerce turned that on its head. E-tailers could offer a product range impossible for a High Street store to match (even if the online inventory was backed off by third party fulfilment deals). An off-High-Street cost base enabled lower gross margins and with scale came economies that enabled even more aggressive pricing.

For a small group of first movers, early success brought the opportunity to invest heavily in the supply chain and in (often automated) customer service.

The result is that – even as ecommerce has become a vital channel for every retailer, whatever your product range or positioning – success has grown ever harder to achieve.

In ecommerce today:

• Resilience at scale is a fundamental price of entry – you simply cannot afford to fail at periods of peak demand,

• Flexibility of platform is a vital strategic requirement, but …

• Differentiation is the decider.


DIFFERENTIATION OF THE ONLINE

EXPERIENCEWhy do customers buy from you instead of the similar store along the street or just a click away? Often, the answer is the customer experience. In traditional, physical stores that was the sum of various factors: a pleasing environment, friendly, knowledgeable staff, a “fair” package of pricing and service, credibility and trust.

One of the biggest challenges facing High Street leaders is replicating that experience – their “brand promise” – in an online environment. The fact is that, beneath a thin skin of brand image, many ecommerce offerings are indistinguishable.

For many large retailers, this is at least partly due to the restrictions created by their choice of ecommerce platform. There is a relatively small pool of enterprise-class ecommerce vendors each offering a very similar set of constrained functionality. They offer nothing new to help retailers differentiate their offering and attract shoppers to their store rather than a competitor’s.

Worse, these platforms effectively prohibit any meaningful customisation of the customer experience. Retailers frequently find that any promised flexibility simply doesn’t exist. The out-of-the-box experience is disappointingly vanilla and, if the retailer attempts any customisation they find themselves locked into an ongoing cycle of expensive upgrades: whenever the underlying solution is updated, they must pay the vendor to reapply their customisations in order to work with each new version. As one retailer stated, “It’s complete vendor lock-in. Once you’ve spent £10 million, you’re not going to write it off. You just keep spending because you have to make it work.”

Even as they promote their move to the cloud, often these packages still operate on a monolithic, pre-cloud architecture that makes any degree of customisation difficult, expensive and time-consuming to achieve. Any sort of differentiation can be impossible to achieve without re-writing, and then redeploying, the entire code-base.

Effectively, many ecommerce businesses find themselves locked into a platform that prevents them from offering the customer differentiation that is vital for success.

The problem is compounded by historic, “Me Too”, follow-the-leader, thinking. As they used to say, “no-one got fired for buying IBM.”

But, buying the same constrains you to only ever being the same. It’s an acknowledgement that the best you can achieve is to mimic the best.

Ultimately, a strategy of follow-the-leader represents a failure of ambition.

We see many leading retailers now asking, “If ecommerce is a core part of our business, why are we locking ourselves into a platform of compromise?”

If ecommerce is at the core of your business, you need to own that, on your own terms.

Customer Experience - the last differentiation

OWNING YOUR ADVANTAGEIncreasingly, we see leading ecommerce players breaking free from vendor lock-in and seeking a better solution. One of these is ASOS, the UK’s largest independent online fashion and beauty retailer.

Having recognised that its existing platform was limiting the firm’s ability to innovate, ASOS took the decision to start again. CTO Bob Strudwick describes his design goals as the team built its new solution:

“We made two big decisions. The first was to create a microservice based architecture. And the second was that we would target Azure as the hosting environment.”29

Those two decisions were critical for ASOS to differentiate its customer experience.

A microservices approach, where each piece of the ecommerce offering (e.g. the shopping basket, the delivery module, payments etc.) is designed, built and deployed as a separate and independent service, gives unparalleled agility.

As Strudwick explains, “We wanted independently enhanceable services. We wanted to be able to innovate rapidly across those services.”

Not only can each service now be upgraded or altered without affecting the rest of the platform or

requiring the downtime associated with a complete redeployment, but ASOS is free to select the best-of-breed solution for every service. The firm can rent, buy or build from scratch the best solutions to create a unique customer experience. The breadth of services available in today’s SaaS market allows for a true hybrid solution of custom built and rented software.

ASOS’ decision to deploy on Azure complements the microservices approach. The firm divided its IT infrastructure between Commodity and Competitive Advantage. Azure’s PaaS service provides the commodity functions that are essential to running an ecommerce platform. As Bob Strudwick describes:

“[It] gives us the potential for our software engineering capability to be directed at those things which bring competitive advantage rather than the commodity functions of maintenance, backups etc.”30

Forward-thinking firms are dividing their infrastructure between commodity and differentiator. They buy commodity off the shelf, at the best possible price, but they build their differentiation, keeping close control of their strategic advantage.

Cloud-first thinking gives retailers the ability to differentiate their customer offering in ways that are impossible with traditional, monolithic, server-first solutions.


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Beyond retail

The challenges of an effective ecommerce platform are not unique to retailers. They affect any business with extreme peaks in transaction volumes, that requires the flexibility to adapt to changing circumstances and that faces competition from similar service providers.

Bookmakers

Unsurprisingly, betting firms face huge spikes in demand around big sporting events like the Grand National, FA Cup final or Wimbledon.

For the 2016 Grand National, betting firm William Hill expected £200 million to be wagered on the “biggest horse race in history”.31

Coinciding with other big events like the Masters, Champions League and Premier League football, the industry enjoyed the biggest weekend of betting ever seen.

William Hill was set to process 25,000 betting transaction per minute at peak times, which they estimated to be “more than six times as many transactions as Amazon UK on Black Friday.”32

A critical moment crash can be expensive, costing £30,000 per minute in lost revenue by one estimate,33 but poor performance is also a major issue. Especially for time-sensitive events like horse races, slow site response times are enough to drive punters to competitors’ sites.

Financial services

Retail brokers and others experience trading spikes around popular flotations (e.g. Royal Mail in 2013) or market-moving events, such as 2016’s Brexit vote.

The day after the Brexit referendum (24th June) saw trading volumes ten times higher than normal. Some major trading sites like those of TD Ameritrade and Fidelity Investments crashed34 while others, like Hargreaves Lansdown, warned users of problems in reporting prices for certain stocks.35

Frustrated investors vented their anger on Twitter and other social media sites.


19

Charities

Big giving events can pose problems for charities, too. Comic Relief and the like are fantastic for focusing attention and generating donations, but can disappoint if the infrastructure can’t cope with the demand that is generated.

Last year, the US event Big Give SA was a victim of its own success when it suffered a web crash at 9.30 am on its one targeted day of giving.36 Similar problems have been experienced in the past by the UK’s Big Give organisation37 and by JustGiving.38

In many ways, this demand pattern of occasional but very steep spikes is ideally suited to cloud-first design. While a monolithic architecture would require charities to invest in hardware always capable of meeting occasional demand, a cloud-first approach enables the organisation to simply turn on additional server-instances as required. After the event, the additional resources can be just as easily scaled back ensuring that the cost of computing always matches the level of donation activity.

Beyond retail

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The Amido approach

Amido is an independent technical consultancy that specialises in implementing cloud-first solutions. We help our clients build resilience at scale, flexibility for the future and differentiation of customer experience. And, we do this while minimising business-risk and build-cost.

We specialise in assembling and integrating proven cloud technologies, often building solutions around an existing core while enabling clients to prioritise their investment between commodity services and those that deliver competitive advantage. We design solutions that bridge and augment clients’ existing technology, reducing the operational risk of change.Vendor-neutral, we combine our deep understanding of the market with your knowledge of your business to select the best strategic mix of technology to give your company a competitive edge.

We take a pragmatic approach. We won’t charge you to re-invent the wheel, but believe in consuming proven cloud services where possible rather than building anew. We combine the best that is available and then build around the edge. Our strength lies in knowing what is available and how to deploy that in the most effective way.

Founded in 2010, we work with brands such as ASOS, Atkins Global, Channel 4, JLT, Wellcome Trust and CBRE, utilising technology to get you closer to your customer.

“BY DESIGNING AND IMPLEMENTING A SOLUTION WITH NO VENDOR LOCK-IN, WHICH COULD INTEGRATE WITH OUR LEGACY SYSTEMS AND SCALE GLOBALLY, AMIDO DELIVERED SIGNIFICANT BUSINESS BENEFIT WHILST CONSISTENTLY DELIVERING ON TIME AND ON BUDGET.” BOB STRUDWICK, CTO, ASOS PLC

Microservices Design Facets

Security

EngineeringContinuous

Delivery

Stubs/ Design by Contract

Sharding and Storage

Auto/Scheduled Scaling

Active-Active

Traffic Management

Routing

Multi Cloud

Compute Options

Economics

Deployment Model

Configuration Mgmt

Service Versioning

Access Control - OAuth2

Network Control

Rate Limiting

Anti Tamper

Transort

APM

Alerting

Diagnostics

SLAs

Dashboards

CDN

Second Level

Caching

Low Latency

GeoDR

Disaster RecoveryELT

Feeds

BatchIdempotancy

ACID

BASE

Transactions Scale Out High Availability

Operations Hosting

Competing Consumers

Streaming

AMQP

Events

The Amido approach

TO LEARN MORE ABOUT HOW WE CAN HELP BUILD SUCCESS BEYOND SCALE, PLEASE VISIT OUR WEBSITE WHERE YOU’LL FIND MORE INFORMATION ABOUT WHAT WE DO AND WHO WE’VE DONE IT FOR.

https://www.amido.com/our-work/






Conclusion

The retail calendar is full of spikes. While Black Friday makes the news, Christmas, Easter, Hallowe’en, Singles Day, Golden Week and more all drive peaks in demand.

However, the limitations of leading, enterprise-grade, ecommerce solutions mean that simply surviving the peaks has engulfed IT strategy. In the main, these solutions remain grounded in a monolithic architecture designed for a pre-cloud age of on-premise server farms.

As technology (on both the consumer and retailer sides) increasingly drives the pace of change in retail, a few, leading ecommerce firms are realising that success requires three elements, of which Scale is merely the price of entry. These are:

• Resilience at scale

• Flexibility for the future

• Differentiation of experience

To achieve this, they are moving away from traditional, monolithic architecture and embracing cloud-first designs.

Thinking cloud-first, rather than server-first, enables modular design in which each service can be designed, deployed and scaled independently. The answer to greater capacity and higher availability is no longer to continually scale up, but rather to scale out with more, smaller servers deployed where they are required. It delivers an agility that is impossible under a monolithic design.

Cloud-first enables individual services to be scaled as required. For example, deploy additional server-instances to support your shopping-basket service in

China for Singles Day; then re-deploy to the US for Thanksgiving.

Cloud-first gives the flexibility to deliver market-specific solutions where required. No one-size-fits-all. If your Middle-East markets need a different payments module to handle cash on delivery, that’s simple. If conversational commerce becomes the next big thing, you can respond with agility … and limited downtime.

Critically, cloud-first enables differentiation of the customer experience. When all other ecommerce sites look the same, and when you can no longer compete purely on price or logistics, it is vital that you own the customer experience, on your own terms.

Conclusion

AMIDO HAS A SUCCESSFUL TRACK RECORD OF HELPING SOME OF THE UK’S LARGEST ECOMMERCE FIRMS DEVELOP CLOUD-FIRST SOLUTIONS.

GET IN TOUCH IF YOU ARE INTERESTED IN FINDING OUT MORE ABOUT AN APPROACH THAT DELIVERS THE SCALE, FLEXIBILITY AND DIFFERENTIATION THAT YOU DESIRE WHILE MINIMISING YOUR OPERATIONAL AND BUSINESS RISK.

mailto:london%40amido.com?subject=Hyperscale%20commerce%20enquiry

mailto:london%40amido.com?subject=Hyperscale%20commerce%20enquiry

22

ENDNOTES

1. Tibus.com (2016) Which websites crashed on black Friday 2016? Available at: https://www.tibus.com/blog/which-websites-crashed-on-black-friday-2016/

2. CNBC, Bowden, M., Images, G., Source, Mlyn, S. and Gustafson, K. (2016) Cyber Monday: Why retailers can’t keep their sites from crashing. Available at: http://www.cnbc.com/2015/11/30/cyber-monday-why-retailers-cant-keep-their-sites-from-crashing.html

3. Accenture (2016) Who are the Millennial shoppers? And what do they really want? Available at: https://www.accenture.com/us-en/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail

4. Accenture (2016)5. Accenture (2016)6. Tibus.com (2016) Which websites crashed on black Friday

2016? Available at: https://www.tibus.com/blog/which-websites-crashed-on-black-friday-2016/

7. Tibus.com (2016)8. The Register (2016) Black Friday: Cashback site Quidco goes

TITSUP* on payday. Available at: http://www.theregister.co.uk/2016/11/25/cashback_site_quidco_goes_titsup_on_payday/

9. Tamebay (2016) Royal Mail report problems with online tracking on Black Friday weekend. Available at: http://tamebay.com/2016/11/royal-mail-report-problems-with-online-tracking-on-black-friday-weekend.html

10. eMarketer Inc. (2016) Worldwide retail Ecommerce sales will reach $1.915 Trillion this year. Available at: https://www.emarketer.com/Article/Worldwide-Retail-Ecommerce-Sales-Will-Reach-1915-Trillion-This-Year/1014369

11. InternetRetailing.net, Rigby, C. (2016) UK online spending rises by 11% to £114bn in 2015, and by 12% to £24bn over Christmas: IMRG. Available at: http://internetretailing.net/2016/01/uk-online-spending-11pc-up-at-114bn-in-2015-and-12pc-up-at-24bn-over-christmas/

12. Accenture (2016) 13. IMRG (2016) IMRG Capgemini e-Retail Sales Index. Available at:

http://www.imrg.org/index.php?catalog=2591.14. Ofcom (2016) The communications market report 2016. Available

at: https://www.ofcom.org.uk/research-and-data/cmr/cmr16. During the survey month of March 2015, see The communications market report, page 368 for details.

15. Thinkwithgoogle.com (2016) Why marketers should care about mobile page speed. Available at: https://www.thinkwithgoogle.com/articles/mobile-page-speed-load-time.html

16. Absolunet (2016) See: http://10ecommercetrends.com/ 17. Chatbots Magazine, Quoc, M. (2016) 11 examples of

conversational commerce and Chatbots in 2016. Available at: https://chatbotsmagazine.com/11-examples-of-conversational-commerce-57bb8783d332#.ane4gt7v5

18. Chatbots Magazine, Quoc, M. (2016) 19. eMarketer Inc. (2015) Mobile messaging to reach 1.4 Billion

worldwide in 2015. Available at: https://www.emarketer.com/Article/Mobile-Messaging-Reach-14-Billion-Worldwide-2015/1013215

20. Shopify Business Encyclopedia (2016) Conversational commerce definition - what is conversational commerce. Available at: https://www.shopify.com/encyclopedia/conversational-commerce

21. Absolunet (2016)22. BBC.co.uk, Cellan-Jones, R. (2016) Amazon dash - who wants to

live in a push-button world? Available at: http://www.bbc.co.uk/news/technology-37224691

23. Internet of Business, Drinkwater, D. (2016) Waitrose: Customer choice is key to IoT innovation. Available at: https://internetofbusiness.com/waitrose-customer-choice-is-key-to-iot-innovation/

24. PYMNTS (2016) Lowe’s and Microsoft put the HoloLens to work. Available at: http://www.pymnts.com/news/merchant-innovation/2016/lowes-customers-renovate-with-microsofts-hololens/

25. See https://www.farfetch.com/uk/editorial/the-nutcracker.aspx 26. Fortune.com, Walt, V. (2015) Amazon invades India. Available at:

http://fortune.com/amazon-india-jeff-bezos/ 27. Ecommerce News Europe (2016) Ecommerce in Russia. Available

at: https://ecommercenews.eu/ecommerce-per-country/ecommerce-russia/

28. See https://channel9.msdn.com/Events/TechDaysOnline/UK-TechDays-Online--Future-Decoded/Evolving-ASOS-to-Azure-Microservices



31. William Hill plc (216) Grand national: Biggest ever betting bonanza! Available at: https://www.williamhillplc.com/newsmedia/newsroom/media-releases/2016/grand-national-biggest-ever-betting-bonanza/

32. William Hill plc (2016)33. Quilton, D. (2016) Betting websites slow during Europa league

quarter finals. Available at: https://capacitas.co.uk/betting-websites-slow-europa-league-quarter-finals/

34. Reuters (2016) Investors left fuming as some financial Websites crash after Brexit. Available at: http://www.nbcnews.com/tech/tech-news/investors-left-fuming-some-financial-websites-crash-after-brexit-n598521

35. Connington, J. (2016) Brexit: Investors struggle to buy as trading volumes hit 10 times normal levels. Available at: http://www.telegraph.co.uk/investing/news/brexit-investors-struggling-to-buy-as-trading-volumes-hit-10-tim/

36. Taylor, R. and Serna, S. (2016) Big give SA to accept donations Wednesday in response to website failure. Available at: http://www.ksat.com/news/big-give-sa-press-conference-on-technical-difficulties

37. Third Sector (2011) High demand forces temporary suspension of big give Christmas scheme. Available at: http://www.thirdsector.co.uk/high-demand-forces-temporary-suspension-big-give-christmas-scheme/communications/article/1107655

38. BBC (2013) JustGiving fund-raising site crashes. Available at: http://www.bbc.co.uk/news/technology-21798834

Amido is a technical consultancy specialising in assembling and integrating proven cloud technologies.

We work with brands like ASOS, Atkins Global, CBRE, Global Radio and Channel 4 to remove friction from their customer’s online and mobile experience to drive revenue and engagement.

From social sign-in to smart content delivery and smooth, scalable transactions, we help brands build loyalty through customer recognition by bridging systems in a powerful and unique way, yielding real-time results for brands and their customers.

Our passion is finding the right strategic mix of technology to give your company a competitive edge and your customers the best experience possible.

Follow us @weareamido www.amido.com [email protected] Level 4 Lafone HouseThe Leathermarket11/13 Weston Street London SE1 3ER

http://@weareamido

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Why simply surviving the next demand spike is not ... - Retail …€¦ · The retail calendar is full of spikes: Black Friday, Christmas, January sales, Valentine’s Day, Easter,