As e-commerce becomes an increasingly popular way for consumers to shop, businesses must find new and innovative ways to improve their sites in order to remain competitive. By providing speed, increased availability, real-time analytics, and security in the last mile, edge computing can give retailers a competitive advantage. This blog post will examine the benefits of edge computing and how it can be used to deliver three key needs for e-commerce businesses: high performance, custom experiences, and building trust with customers.
What is Edge Computing?
The Open Glossary of Edge Computing defines edge computing as “the delivery of computing capabilities to the logical extremes of a network … by shortening the distance between devices and the cloud resources that serve them, and also reducing network hops.”
Like cloud computing, edge computing resources are virtualized and highly scalable, making them ideal for cloud-native architecture like microservices and serverless. Unlike cloud computing, edge computing places compute resources across a constellation of geographically distributed locations, rather than concentrating its computation resources in a handful of centralized locations. This spatial configuration results in a number of principle advantages, such as:
- lower latency
- improved availability
- real-time analytics
- optimized resource use; and
- last-mile security.
Each of these benefits represents a tangible improvement that can not only improve and transform websites, but help e-commerce improve conversions and maintain customer loyalty. As e-commerce grows increasingly competitive and customer expectations continue to rise, it is imperative that retail sites and applications shine with high performance, responsiveness, and building customer trust.
As monitoring and analyzing customer behavior becomes increasingly prevalent, one thing has become abundantly clear: performance matters. One of the biggest reports in how speed impacts e-commerce is Google and Deloitte’s joint study “Milliseconds Make Millions,” a 2020 study which tracked the mobile performance of 37 brands across the U.S. and Europe to determine its effect on companies’ bottom line. The study found that even a .1s improvement in speed improved customer engagement at every level, including:
- An 8.4% increase in retail conversions
- A 9.2% increase in order value
- A 5.7% increase in bounce rate for product listing pages
- A 5.2% increase in retail customer engagement
However, due to the lack of user-reported issues with websites, it can be hard to rectify or even understand customers’ pain points. As noted in Cisco and AppDynamics’ 2019 App Attention Index, “83% of customers are likely to experience problems with digital services without notifying the brand and giving them a chance to put things right.”
The App Attention Index noted in their research that after a poor experience, customers are “now far more likely to take decisive action – deleting applications, turning to the competition, and sharing their negative experiences far and wide.” This finding serves as a cautionary tale and warning to retailers on the importance of customer experience. To avoid permanently losing customers and damaging their brand reputation, companies must take proactive measures to improve performance with improved bandwidth, lower latency, and higher fault-tolerance.
Edge computing trims the travel distance of data delivery and moves processing closer to end users, lowering latency and reducing traffic congestion. In addition, it reduces the points of failure on the network and alleviates the load on a retailer’s origin infrastructure. As a result, content delivery and online store availability is both fast and guaranteed.
Collecting and analyzing data on how users interact with e-commerce sites is vital to responding to customer needs. In addition to helping developers monitor and troubleshoot application performance issues, analytic tools can play a big role in improving e-commerce sales, providing sites with answers to key questions such as:
- Which items are making (or losing) money?
- Who is the target audience for different products?
- How should buyers be segmented for targeted ads or offers?
- Which products should be upsold or cross-promoted?
However, customer data is only an asset if it is cost-effective to obtain and immediately actionable. Having metrics on whether a customer is likely to buy a certain product is only useful while they are browsing a site; if data can’t be collected, analyzed, and acted upon in that timeframe, it becomes useless. Likewise, the more expensive it is to collect and analyze data, the smaller the return on investment. As a result, sending huge amounts of data to and from the cloud would limit the data’s usefulness and be prohibitively expensive.
That’s why edge computing plays a key role in providing e-commerce companies with cost-effective and real-time insights on customer behavior. As LFE’s 2020 State of the Edge report states, edge computing will “obviate much of the delays, costs, and complexities of sending all the collected data back to a centralized location for processing.”
Content that is customized to a customer’s specific tastes, location, buying history, and other indices is not only necessary for upselling and cross-promoting products—it’s increasingly becoming a hallmark of a positive customer experience. As noted in the 2019 App Attention Index, consumers increasingly expect content that is tailored to their interests, with 70% expecting online content to be more personalized than face-to-face experiences. However, balancing the need for high performance with the desire for customization can be tricky. Although static content can be cached by CDNs, highly personalized content is dynamic, requiring lengthy trips to and from the cloud for processing. With the ability to cache dynamic content at the edge, edge computing enables personalized content to be delivered with the same high performance as static content.
Perhaps the most important tool that can be used for responding to customers’ needs is agility. The ability to quickly add new features and functionality allows companies the ability to test various versions of a site or application, enabling them to streamline the purchase and checkout process and add features that improve the customer experience, like popular payment methods or digital signatures.
Companies can gain this agility by embracing modern application architectures like serverless computing or microservices, which atomize monolithic applications into smaller units that can be deployed and scaled independently. These edge-native architectures enable applications to be designed from the ground up so that more latency-sensitive functions or microservices can run closer to the edge while allowing heavy workloads to scale out to the cloud.
Keeping customers’ information private and secure is key to building trust in customers. Data leaks, malware, and fraud can damage a brand’s reputation. Furthermore, ransomware and DDoS attacks which result in service outages not only harm a company’s image, but may result in further losses, such lost revenue opportunities from legitimate customers who can’t access the site.
Costs from cyber attacks may include:
- payment of ransomware
- lost customers and business opportunities
- legal or regulatory penalties
- high usage fees from increased DDoS traffic
- cost of rebuilding destroyed or damaged operations
- loss of intellectual property
Edge computing can help mitigate the damage and costs associated with security breaches by providing security in the last mile, filtering out malicious traffic before it reaches a business’s origin infrastructure. Furthermore, edge computing companies like Azion that provide zero-trust security tools designed for modern microservice applications and a mobile user base, replacing the outmoded system of a corporate perimeter with a system that protects geographically distributed workloads, users, networks.
Online shopping differs from traditional retail in that buyers can’t physically examine the goods they are purchasing; as a result, e-commerce must build trust that they are accurately representing products. High-definition images and videos not only showcase the retailer’s products, but provide useful information, such as how to use or assemble a product after purchasing it.
A 2020 article from PayPal’s Business Resource Center cited that, “E-commerce merchants from many industries report that videos work, seeing positive effects like more time spent on their website and increased conversions. Benefits-focused product videos are a good start, and how-to videos are popular for tech and electronics merchants.”
However, high-quality images and videos can use significant resources, eating up bandwidth and driving up the cost of each pageview. Edge computing can not only minimize bandwidth use by reducing the distance data has to travel, but by optimizing images for various devices and screen sizes, providing a major advantage over traditional CDNs which only cache and serve static content.
In conclusion, edge computing can help to drive e-commerce sales with:
- speed gains that improve order size, bounce rate, conversions, and engagement;
- real-time analytics to segment buyers and tailor offers to their tastes;
- the ability to personalize sites to a user’s location, preferences, and buying history;
- localized security that protects origin infrastructure from cyberattacks; and
- high-definition images and videos delivered with lower cost and bandwidth.
Azion’s Edge Platform not only delivers on these benefits, but further enhances cost savings through serverless computing. In a serverless computing model, customers pay only for the resources they use, rather than provisioning ahead of time, eliminating overhead from resource waste and reducing the barrier to entry. Instead, server-side tasks like resource management are handled by Azion, freeing up businesses to focus on improving on customer experience (CX).
Azion’s Edge Platform includes a suite of edge computing products that can help e-commerce improve their applications:
- Edge Functions lets you run A/B tests, quickly debut new features, and easily make changes to adapt to user feedback.
- Edge Application can accelerate applications, optimize images, cache dynamic content, and balance the load on your origin to improve performance and reliability.
- Edge Firewall enables a zero-trust policy with custom rule sets to protect applications and networks from a range of threats such as DDoS attacks or OWASP Top 10.
- Edge Analytics provides real-time insight into user behavior and application performance and integrates with your Big Data, SIEM, or storage service.
Azion is trusted by major e-commerce worldwide, including Lojas Renner, Brazil’s largest retail clothing store. Through their partnership with Azion, Renner has been able to:
- retain triple digit growth in online sales;
- increase application downloads by over 250%;
- handle Black Friday access peaks of 13,000 requests per second;
- drive up sales conversions; and
- improve organic traffic and SEO performance.