The Bright, Cloudy Future of E-Commerce

Innovations of the past few years provide an interesting hint at the future of e-commerce. Consider the following scenario:

A CIO of a retail company gets off the phone, sits back, and begins to read his new monthly retail systems contract. The days of dealing with large development teams, countless software products, integration, infrastructure and security are over. All of the systems required to operate a retail business live in a software cloud managed by a provider.

Every selling channel is integrated to the point where the systems platform behaves like one cohesive unit. Every interface into the platform is a Web page that looks, behaves and operates like a polished desktop application. Retail store employees, call center representatives, Web site users, catalog partners, merchandisers, fulfillments specialists, and business administrators use these centralized Web interfaces as their tools for interacting with retail systems. Requests for customizations and additional functionality are fulfilled in days.

Mobile devices retrieve and use information from the software cloud for a slew of functions and, most importantly, the cloud changes based on its understanding of the information moving through the business. The platform thinks, understands, and finds ways to sell more to customers. The entire IT infrastructure of a retail business is an intelligent software cloud with advanced Web interfaces that are accessed for a monthly fee.

On the Horizon

None of this is far off. This scenario can be a reality as soon as a various recent innovations are combined into one package. The last couple of years have brought us Web 2.0, new mobile platforms, rapid application development technologies, cloud computing, advancements in artificial intelligence, and a desire to see all of the selling channels of a retail business work in harmony.

A company that can integrate all of these concepts into one retail package is going to win big and probably own IT infrastructure for the retail vertical.

Over the last few years, retailers have started to innovate around having all of their selling channels work together. Retailers have exciting new tools to support their business: They can tightly connect an e-commerce system with store systems; provide a call center with real-time access to information across any selling channel; and conduct advanced analysis of information coming from numerous entry points.

Companies are finding ways to tightly link everything from merchandising to business intelligence and are continuously developing new integration paths to any system necessary to run a retail business.

Internet as Platform

Another area of innovation with great relevance is cloud computing. Cloud computing encapsulates a number of concepts — including Software as a Service (SaaS) and Platform as a Service (PaaS) — that are going to be a core strategy for most system application companies.

The Internet has clearly become the most practical platform for software. All the necessary systems to run a retail business will live in a cloud that exposes its functionality as a service with an associated fee for its use.

Your POS will be a service, your e-commerce system will be a service, and anything from your merchandising administration to an interface for your drop ship suppliers to fulfill orders will be a service.

A new breed of professional services companies will have their teams work within these software clouds to accomplish customizations for retailers. Simplified APIs and rapid application development tools (RAD) will allow developers to work within the cloud at an extremely rapid pace.

These RAD tools will abstract developers from the complexity of the systems and will hardly resemble traditional programming languages. A large percentage of the development work will be visually setting up how data should move within the system and attaching interface templates to the desired functionality of the system.

The Phone’s Expanding Role

The recent advancements of Web 2.0 also play an important role in this vision. There has been exciting innovation around both the community and interface development aspects of Web 2.0. Web pages are slowly starting to look, feel and operate like desktop applications.

Within the next couple of years, browsers will take a completely different form. The user interface attached to a Web page will be more sophisticated and easier to use than many of the current native applications.

Mobile devices are now sufficiently mature to allow access to useful business applications from a mobile client. With the advancement of Web user interfaces and the ability to distribute different markup to any device, the business usefulness of mobile applications connected to a retail software cloud is becoming infinite.

The next couple of years will bring us exciting new ways of looking at our phone as a selling tool, data collection tool, and enterprise administration interface.

Practical AI

Artificial intelligence (AI) is the last piece of the puzzle. Any mention of AI is usually greeted with a raised eyebrow. The average person would most likely consider AI to be an abstract concept that is too far away to have any practical use today, especially in retail.

However, if the definition of the field is simplified, it is a system that understands its surroundings and makes decisions to expand its chances of accomplishment. In the retail world, this will translate into a retail software cloud that is gathering information about its surroundings through systems integration and data mining of information.

Every customer touch point will capture more information that the system can then analyze to increase the chances of making decisions on how to sell more to customers. The software cloud will be using concepts like expert systems, genetic algorithms, and fuzzy logic to make recommendations on how the business will sell more, what to sell where, who to sell to — and it will modify itself to be able to accomplish these optimizations.

In the end, the winner of the retail systems world will be a company that can encapsulate all of these concepts in one solution. The systems of a retail business will be so tightly integrated that they will look like one product. This one product will be a software cloud driven by concepts like SaaS and PaaS.

Development for customizations will be greatly simplified by new tools that live inside the platform, exposed as services professional services teams can use. Every entry point into the system will be a Web page resembling a native application that can be used on any type of device, including a mobile phone. Finally, Artificial Intelligence concepts will be the spark that brings the software cloud to life.

The end result? The CIO of a retail firm will sign a contract and watch the IT infrastructure grow on its own.

Steve Coy is product development managing director of Fry, Inc., an e-commerce design, development and managed services provider.

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