Future Opportunities and Challenges of Edge Computing in Retail Industry
The past few years have been a rollercoaster ride for the retail industry. The pandemic has brought a severe blow
to different aspects, including the supply chain disruptions, loss of customers in physical stores and raising prices of
raw materials, etc. With technology increasingly becoming a competitive differentiator for retail industry, edge
computing plays a pivotal role to help business run and grow in this post-epidemic era.
As the retail industry is becoming more and more competitive, customer engagement and user experience are
becoming more important than ever. Edge computing involves bringing data processing closer to where it is created,
offering a more efficient way of handling extensive data and reducing latency. This technology has huge potential in
the retail space to revolutionize customer experience and enhance servicing. By reducing the frequency of data
sending to the cloud, it offers faster processing speed, increased security, and optimized network performance.
Efficient data processing performed by edge computing can help retailers to improve their online service, enabling
customers to have a satisfying experience.
Modernizing the Retail Experience
Customers’ Shopping Experience
With the help of edge computing, customers’ shopping experience become more convenient and personalized. From small grocery stores to big shopping malls, customers can find what they are looking for much faster, get help when needed and check out quickly. By combining digital signage with computer vision, customer types can be classified and quantified, allowing retailers to present real-time advertisements relevant to specific customers. The Point of Sale (POS) systems can capture customer purchasing habits and utilize the acquired data to generate new product recommendations for customers. Digital signage can collect data about the shopping habits of specific customer, leading to more tailored service according to customers’ shopping patterns and preferences. Moreover, self-checkout kiosks equipped with edge devices make it easy and fast for customers to purchase items by avoiding long queues. Contactless payment also makes transactions faster, smoother and easier.
Inventory Management
To ensure that customers receive their products on
time and minimize lost sales, inventory management
plays a crucial role to a retailer’s success. When
customers visit a physical shop or shop online, most of
the time they are seeking for some products
intentionally. So finding exactly what they need and
receiving the product on time are important reasons
why customers are likely to return and recommend
the retailer. Lack of proper inventory management can
lead to increased holding costs due to excess
inventory, missed sales opportunities and customers
dissatisfaction caused by understocking. With the help
of edge computing, retailers can better manage stock
levels, forecast demand, and make smarter
purchasing decisions.
Online Shopping
Edge computing helps retailers better understand
behaviours and needs throughout the customer
journey. What online shopping outweighs traditional
retailing is that, it has the ability to monitor product
interaction, detect repeat customers, and gain detailed
insight into choices made by customers. This
technology not only enables the creation of an even
better shopping experience for customers, it also
provides an effective way for retailers to collect and
analyse data which includes identifying trends,
purchasing patterns and personalizing customer
interactions. By capturing and using customers’ data,
retailers are able to provide more personalized
experiences and offers to customers. Online retail
stores are competing against each other using the
powerful capabilities of edge computing. In the future, it
is certain that physical and online stores are working
together to create better shopping experience for
customers.
Challenges
Though edge computing brings great benefits to retail
industry, there are still some challenges they need to
face.
Increased Complexity
As the number of devices and sensors increases, the
architecture of edge computing is more complex than
traditional computing and it is also more difficult in
terms of management. The installation and subsequent
maintenance processes of hardware and software are
more complicated. In addition, edge computing requires
stable network connectivity between devices and
servers. If the network connection is lost or unstable,
the system can breakdown easily, impacting the
performance and reliability of the entire system.
Higher Costs
Edge computing can be more expensive than traditional
computing architectures as it requires additional
computing and data storage resources. Businesses with
limited budgets and resources may find it challenging to
adopt this kind of new technology.
Data Security and Privacy
Edge computing can present data management
challenges, as businesses must ensure that data is
processed and stored securely and efficiently across
multiple devices and servers. Privacy is a huge
concern. Data can be confidential and sensitive as it
reveals the information about one’s behaviour and
preferences. Therefore, it is essential for businesses to
implement data protection and privacy measures, such
as encryption, anonymization and
pseudonymization to safeguard the data from being
hacked.
In conclusion, edge computing is a powerful and reliable
technology which provides significant benefits for
business operations including the retail industry. It is
suitable for companies that want to improve their digital
infrastructure. As retail businesses are continuing to
become more digitalized, edge computing plays an
important role in driving growth and innovation.
