Strategy Before Architecture: The Key to Smart Retail

Published On: March 22nd, 20224 min read

At one point in time, technology drove an organization’s strategy. Companies did their best to choose platforms that would provide the functionality they currently wanted and would adapt their strategy to align with the platform’s capabilities over time. A strategy horizon of five, seven, or even ten years was reasonable to expect, overlaid on an expensive, complex, slow-to-evolve, and monolithic architecture.

Time, and the market, have combined to alter this approach, however. Today, competitive pressures are increasing, consumer expectations are changing rapidly, and the market is constantly adjusting. Retailers need to be nimble to meet shifting demands.

This means that the relationship between strategy and architecture has been reversed. The strategy horizon is now measured in months, not years, and retailers need an architecture that supports fluid plans. Now, many merchants are melding existing platforms with new technologies to adopt instead of waiting for a seismic shift in architecture to provide that support.

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Upending the Strategy-Architecture Paradigm in Retail

The evolution of retailers’ relationships with architecture is apparent. “Companies used to buy something big and executives would literally sit there in rooms and say ‘All right, what can we do with it?’”, notes Jeffrey Oh, Vice President of Sales for DMI. “Architecture dictated strategy. But we’ve now evolved into a new space where solutions are better.”

When monolithic platforms were the order of the day, organizations were constrained by what they were able to do with their technology and, therefore, what they could do with their strategy. Consumer demand was slow to change, and competitors all had equal footing.

The pace of technological change has massively accelerated, however. As consumers interact with evolved digital experiences, they expect to see the same level of ease and innovation in every application. A Vanson Bourne survey conducted before the pandemic reported that 70% of consumers feel account creation should be instantaneous, for example, while 92% expect fast, frictionless digital experiences.

Since then, the pandemic forced all retailers — B2C, B2B, and even B2B2C — to speed the digitization of their business. Unified digital transformation means having applications that can be nimble and support strategy changes across more than eCommerce, too. Systems must support dynamic change across retail organizations, from brick and mortar stores to e-commerce new shopping venues like TikTok and Instagram.

The underlying technology ecosystem needs to be as dynamic as the evolving strategy of the business. It’s why many organizations are moving away from large, inflexible single platforms and developing a digital architecture that relies on individual, composable components that can meet the speed of customer and market change. Leveraging component-based architecture, like microservices and headless platforms, creates an ecosystem that meets changing needs instead of driving the strategy.

Adapting to Strategy-First

Once an organization makes the conceptual shift to strategy-first, its current architecture can seem lacking while a major transformation seems overwhelming. However, the move to a contemporary ecosystem doesn’t need to be all or nothing.

Lowes is a perfect example of an organization that has embraced a strategy-first approach while managing through its existing, monolithic architecture. Like many enterprise retailers, Lowes used IBM’s WebSphere for both front and back-end digital retail services. Realizing that the platform didn’t allow for the flexibility needed in the home improvement space, the company began reimagining its architecture.

Creating a front-end experience that could meet the needs of homeowners and contractors alike was a priority. Lowes shifted to MACH (Microservices, API-first, Cloud-native, and Headless) architecture for the user experience, but maintained the back-office services on Websphere. APIs enabled communication between the headless front end and the existing backend. This offers a means of supporting new retail strategies and shifting market demands without tearing the existing technology out, root and stem. This steps the organization toward a composable architecture while meeting the needs of the customer today.

Companies are discovering that, while the infrastructure of the past served their needs at that time, it no longer provides the flexibility needed in a modern retail environment. A single monolithic platform may no longer be ideal. But the move to a more agile architecture doesn’t need to be done all at once. The existing platform can be seen as part of the composable environment, letting an organization reimagine the most crucial technology elements that need to be changed and make other updates over time.

Assess Where You Are to Get Where You’re Going

Digital transformation is an evolutionary process, not an explosive one. The move to a composable business model, using an architecture like MACH, moves an organization to a position where strategy drives technology solutions, and the underlying ecosystem becomes end-to-endless instead of static and unchanging.

This is more than technology adoption. It’s a combination of business strategy, planning, and implementation. Retailers need partners, like DMI, that can see the bigger picture and where transformation sits as an integral part of the business, not just another IT project. That evolution must start from where you are at.

That’s why DMI created a free, 60-minute Commerce Strategy Assessment. Our experts in the retail space review and score a company’s current online experience and technology stack, and provide actionable steps toward improvement. Request a Commerce Strategy Assessment today to start on the path to a more responsive and nimble retail strategy. Learn more about our commerce strategy services here.

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