A New IT Paradigm for Retailers: The Cloud Services Technology Framework

The retail industry has long suffered from anemic investments in information technology that have saddled many companies with aging IT systems unable to keep up with rapidly changing customer demands and market dynamics. Industry CIOs and CTOs have been searching for a solution, and many have found an answer: A new retailer application architecture offering a powerful and agile approach to driving business innovation.

Many IT leaders have considered microservices frameworks that abstract application services. But they have yet to define a broader application strategy for how this impacts their entire application strategy.

AWS has pioneered a new approach, called the Retail Cloud Technology Framework. It’s based on a set of core architectural principles that:

• Leverages mature, enterprise-ready cloud platforms providing unlimited scalability, security, and resilience.
• Delivers advanced network connectivity to stores, powering new digital strategies that deliver distinctly compelling customer experiences.
• Exploits modern microservices architectures that help developers accelerate business innovation via discrete, easy-to-manage application components that build on each other.

Inside the Retail Cloud Technology Framework

The Retail Cloud Technology Framework was designed by AWS in order to help retail industry CIOs and CTOs tackle their most pressing challenges. These include meeting the changing demands of modern consumers and business customers, managing the legacy IT infrastructures burden, and transforming IT organizations to be leaner, faster, and more productive.

But the framework is not simply about moving your existing systems to the cloud. Its core tenet is to utilize the cloud as an opportunity to migrate to a state-of-the-art application architecture that is more agile, efficient, and capable of driving retail growth and innovation.

The concept of abstraction powers our framework. This means separating business and customer-facing applications from the underlying business logic, which are exposed as services to power applications. By taking advantage of this abstraction layer, front-end developers can focus on what really matters: transforming the experience of your customers and business users. Developers control the business logic by accessing a set of microservices—via APIs—that conform to enterprise-wide schemas and security standards.

Broadly speaking, our framework defines these concepts practically so that IT leaders can chart a more effective and successful application strategy for their organization and the enterprise as a whole.

Let’s look at the framework, layer by layer, starting at the top.

• Retail Innovation Applications. Great innovations turn market followers into market leaders. All are made possible in this layer, as development teams creatively integrate underlying enterprise services to quickly erect compelling new applications and services. This is how Amazon built its market leadership in advanced cashier-less checkout solutions, voice ecommerce capabilities, and new AR/VR tools that are driving the next wave of virtual customer experiences.
• Enterprise Services. In this layer, your retail application teams work in tandem with the pre-packaged retail cloud services (developed by your cloud provider) to create unique business capabilities, such as recommendation engines and targeted promotions. This is where competitive differentiation and innovation begin to pay off.
• Retail Cloud Services. This layer consists of a set of cloud services developed by your cloud services provider in order to provide popular business capabilities, such as demand forecasting, personalization, and order management. These building-block services harmonize with your existing applications while providing you the flexibility to migrate away from these legacy apps at your own pace.
• Enterprise Tech Debt. Many retailers feel trapped by their previous investments in commercial-off-the-shelf (COTS) systems, such as ERP or POS systems. Our framework outlines a path for retailers to eliminate this technical debt by moving away from these costly, inflexible systems, and then embracing next-gen retail cloud services over time. During the transition, you can progressively drive more innovation and value from your new cloud solutions until you’re ready to phase out your legacy apps.
• Cloud Core Services. Not to be overlooked, the framework foundation is composed of a set of cloud-based IT infrastructure services that provide the raw computing and networking services to power your technologies. What is the right provider for your retail business? Start by looking beyond simple cost comparisons, and investigate features like ease-of-use and scalability that will help cut IT overhead and offer greater returns in the long run.

Redefining IT

Retail leadership may sometimes believe that IT is too slow or costly to meet the latest competitive threats and market demands in one of the world’s toughest industries.

Our framework lays out practical strategies to help your business successfully tackle these growing challenges. Start by getting out of the IT infrastructure business and reaping the benefits of a leaner and more sustainable cost structure. Even better, this frees up your resources to focus on creating innovative new services—the top framework layers—at an accelerated pace.

The framework also encourages the radical transformation of your organizational culture, as you build a new generation of teams energized by access to modern development tools and cutting-edge architectural approaches. Now you have the power to attract the top IT talent you need to fuel future innovations for your business.

To learn more about the Retail Cloud Services Technology Framework, download our latest e-book, Transforming Retail in the Cloud: A CIO’s Handbook. And, if you’re ready to begin your digital transformation journey, then visit our AWS Retail Overview page or contact your account team today.