After a long period of uncertainty, caused by the COVID-19 pandemic, in which retailers and e-commerce were forced to adopt new digital initiatives, the so-called “new normal” brought with it new challenges for this industry, such as the exponential increase in online business, higher advertising costs, high traffic spikes, and threats to the security of your applications.
As a result, the development of computer solutions to face these challenges has become essential, since online businesses must quickly overcome problems such as speed, security and availability of their applications, in addition to guaranteeing an optimal customer experience, if they want to remain competitive.
In this article, we present some of the main challenges of e-commerce and how edge computing can help transform the online shopping experience once and for all.
Challenge Space
Increasing Agility
The ability to move swiftly in response to change provides a massive advantage in times of high competition, making agile business practices a top priority. Sudden changes in consumer habits last year resulted in increased e-commerce traffic, changing traffic patterns, and differences in what people were buying.
The new e-commerce trends derived from the COVID pandemic have brought with them the need for digital businesses to have a flexible and scalable infrastructure that can meet the demands of modern workloads, quickly adapt to traffic spikes and enable companies to bring innovation to the market faster.
But while the decision to embrace agility is simple, figuring out how to implement it is considerably more complicated. One widely discussed solution for increasing business agility is transitioning to microservices, a new type of application architecture that atomizes monolithic applications into small, loosely coupled modules that can be independently scaled and replaced.
However, transitioning to microservices can be a time-consuming and complex process, taking developer hours away from other projects and potentially requiring companies to take their applications temporarily offline—both risky propositions in a rapidly changing market.
Unfortunately, the scalability benefits of moving from legacy infrastructure to the cloud are minimized without adopting cloud-native microservices architecture. Due to the size of some monolithic applications, replatforming as-is may result in even more resource waste when scaling applications. As a result, replatforming to the cloud as a quick fix to gain agility may result in less flexibility in the long term.
Reducing Costs
For e-commerce, the need to keep costs low is especially difficult because it is a low-margin business, where the cost of producing goods is almost as high as their sale price. This leaves very little margin for error, requiring e-commerce companies to reduce operating costs and improve efficiency wherever possible to keep net incomes positive. In a period in which competition is increasing, this is especially important as retailers often rely on high volume to offset low profit margins.
In addition to this, e-commerce companies need to contend with mounting operational costs. Part of this is due to business operations such as the increase in online advertising and customer acquisition costs. However, a major component of this is due to technical operations costs such as cloud egress, inefficient delivery architectures, unoptimized content (such as product images), and complexity in implementing security and compliance. These challenges get particularly exacerbated during periods of high traffic such as Black Friday.
Thus, many e-commerce companies have to struggle to survive in an increasingly competitive environment. According to Statista, e-commerce will account for 20.4% of global retail sales by the end of 2022, up from just 10% five years ago.
Meeting Customer Expectations
Ensuring a pleasant and compelling customer experience is one of the biggest challenges e-commerce companies face. It’s far easier to navigate to a different app or website than leave one physical store and drive to another, so a poor customer experience with e-commerce has much more potential to disrupt a sale than it would at a traditional retailer. At worst, visitors will not return to the site if the first encounter with the store is confusing, difficult and laborious.
In addition, Cisco’s reports that only 17% of users will report problems they encounter. This leaves stores without the opportunity to set things right before the customer abandons a sale, switches brands, or shares their poor experience on social media.
According to the report, the experiences that most frustrated customers include:
- Slow loading site or poor response time
- Service unavailability
- Lack of functionality
- Hard to use applications
- Lack of personalization
Image optimization
Unfortunately, the more dynamic content and high-resolution images you incorporate into your site, the more time it will take to load. That’s because traditional CDNs, which accelerate delivery for many e-commerce sites by caching content in decentralized locations close to users, only cache static content.
Other requests will be passed on to the site’s origin servers, which may be geographically far away from the end user, requiring a much longer round-trip. And although CDNs can cache images, optimizing those images so that they transfer quickly and display perfectly on the wide range of browsers, device sizes, and screen resolutions available today can be a complicated process.
As explained in one of our recent posts, image optimization is a bit of a balancing act. Large file sizes need to be compressed for transfer and storage, but the more an image is compressed, the greater the chances of noticeable degradation. And visible degradation may vary considerably between users who access the store on a large, high-resolution PC monitor and those who are browsing on a mobile phone. Images may also need to be sized or cropped to fit different screen sizes or reformatted to display in different browsers. Between uploading, configuring, and managing different versions, even adding a single image to your site can turn into a labor-intensive task.
Adding to these difficulties are customer expectations for always-on services and increasingly high speed. At times of peak or unexpected demand, maintaining speed and availability requires either intensive resource management or overprovisioning—two unappealing options for e-commerce companies who need to keep overhead low.
Security
Another of the concerns of e-commerce when it comes to guaranteeing customer satisfaction is the security of their websites and applications. Currently 32% of e-commerce experiences cyberattacks annually. Furthermore, the data breach costs in 2021 amounted to $4.24 million.
In this context, businesses consider the need to help themselves with modern solutions that allow them to protect their applications, users and networks and prevent data leaks, as well as common attacks such as DDoS or credit card fraud.
Solution Space
Azion provides stores with the tools they need for the current challenges of e-commerce. Through serverless computing, companies can create more agile applications and reduce overhead, while delivering from the edge gives e-commerce stores a necessary competitive advantage by providing customers with a fantastic user experience.
Meeting Customer Expectations with Edge Computing
With Edge Application, e-commerce customers can use edge computing to meet customer expectations for performance, personalization, and design by performing workloads at the edge of the network. Modern e-commerce, which rely heavily on dynamic content and APIs and require complex image processing workflows, is a problem for traditional last-mile delivery services like CDNs that can only cache static content. Edge Application not only caches content, but moves computing to the edge, shortening the distance data has to travel for processing, and scales automatically to ensure availability while reducing overhead.
With Edge Application, e-commerce companies can:
- Perform precise customer targeting by region using Edge Cache rules
- Improve resilience and availability with a distributed edge network that scales automatically
- Speed up applications and websites by delivering from the edge
- Escape cloud vendor lock-in with multicloud and hybrid load balancing
- Automate image processing to reduce operational tasks
- Enable application acceleration for even faster service requests that bypass rules and reduce origin requests
Increase Agility and Lower Costs with Serverless
Edge Functions is Azion’s serverless computing solution that enables e-commerce stores to build event-driven functions that run at the edge of the network, without the need to scale or manage resources. This enables companies to easily break up monolithic applications, gaining more agility and flexibility while reducing—rather than adding to—the day-to-day operational tasks of managing and scaling applications. In addition to the cost savings from reducing operational tasks, automatic scaling enables companies to pay for resources on an as-needed basis, reducing waste and lowering overhead.
With Edge Functions, e-commerce companies can:
- Perform A/B tests with and quickly add new features to make applications more intuitive and easier to use
- Easily integrate APIs to expand payment methods
- Reduce operational costs and overhead from overprovisioned resources
- Manage the retail supply chain through systems integration
- Segment customers to enable more targeted personalization
- Boost savings with more efficient resource use than competing products
Speed, Security, and Scalability with JAMstack
Another great option Azion provides for building and running e-commerce platforms is the JAMstack approach. JAMstack enables modern applications built for speed, security, and scalability using the principles of decoupling and pre-rendering. Rather than forcing users to wait for data to be fetched from a database and rendered on a server with each request, JAMstack sites are pre-rendered at build time and use HTTP APIs to shift functionality from the back-end to user’s browsers. This not only provides significantly faster load times, but enhances security through a smaller attack surface.
By building a JAMstack application on Azion’s platform, e-commerce companies can host their sites entirely at the edge or create Edge Functions to personalize sites and enhance them with payment methods, authentication, and third-party APIs. Moreover, JAMstack’s clean decoupling of services enables APIs to be highly secure and easily integrated—two necessities for e-commerce companies that must protect users’ payment information and adapt quickly to usage patterns.
Find out what Azion can do for your company by creating a free account and trying out our serverless edge computing products today.
