Magazine Luiza: digital transformation of their e-commerce platform

About Magazine Luiza

Founded in 1957, Magazine Luiza is a technology and logistics company focused on the retail sector. In 2018, it recorded year-over-year growth of 60% in e-commerce sales, reaching a volume of 7 billion Brazilian reais (nearly 2 billion in USD).

Industries: Technology
Location: Brazil

Apigee, Firebase, and Google Cloud Platform (GCP) have helped Magazine Luiza to become one of the most successful e-commerce operations in Brazil.

Google Cloud Results

  • With the migration of 113 apps in less than 60 days, Black Friday was their biggest ever, registering levels of API traffic that were dramatically higher than before.
  • Apigee helped decouple the front-end and back-end systems.
  • Firebase helped reduce the complexity of building apps needed to reach customers.
  • Today, they offer 4.3 million SKUs (compared to the legacy sales and distribution system, which supported 50,000 SKUs in 2016).

Magazine Luiza supports over 3,300 vendors

“Black Friday 2018 was our biggest ever, where we saw levels of API traffic that were dramatically higher than before. Apigee helped us with our execution, meeting customer demand throughout our platforms, with visibility across all of our API and application activities.”

Andre Fatala, Chief Technology Officer for Magazine Luiza

Adopting mobile e-commerce presented Magazine Luiza with an entirely new challenge—one that required a quick response for them to remain competitive. Brazilian e-commerce players, along with global internet giants, threatened to enter the market. To help achieve their goals, they employed Google Cloud products like Apigee API, GCP, Firebase, and G Suite.

A new level of scalability and innovation

In 2013, Magazine Luiza had an e-commerce platform, and even an API library, but those APIs were accessing an overloaded back-end application built with 150,000 lines of code. Deployment of new APIs was slow: we faced undesirable dependencies and scalability challenges, as well as responsibilities distributed across isolated teams.

Fully aware that they were being threatened by their competitors, the then-chief operating officer (current CEO) Frederico Trajano formed a small team of developers that was walled off from IT governance processes and roadblocks of the larger organization, and granted them access to the company’s entire e-commerce operation.

That’s around the time when they started using the Apigee API management platform, which helped decouple the front-end and back-end systems, making it easier and faster for the team to iterate on new apps, while other teams maintained their legacy systems of record.

Technology that boosts customer satisfaction

Magazine Luiza’s approach accelerated mobile application development, and Firebase played a major role in this process. They began using this app soon after learning about it at Google I/O in 2016. Now they can quickly publish and test new features, and Firebase Crashlytics helps maintain the apps stable and users happy.

After GCP launched its region in Brazil last year, Magazine Luiza began deploying workloads onto GCP. The speed was notable and this is critical for e-commerce applications. They had already been using Kubernetes, which was especially helpful with the multi-cloud strategy. Migrating all the data onto GCP was simple because they used Kubernetes along with their own open-source PaaS.

Due to the need for better performance and stability during Black Friday, they decided to migrate 113 apps to GCP less than 60 days prior to this important date. It was a move that paid off: Black Friday 2018 was their biggest yet, where they recorded levels of API traffic that were dramatically higher than before. Apigee helped with the execution, meeting customer demand throughout the platforms, with visibility across all of the API and application activities.

A digital platform with a “human touch”

In the future, Magazine Luiza plans to migrate their entire e-commerce platform onto GCP, and their Big Data team is moving away from the Hadoop environment to an architecture that uses managed GCP services.

With this newfound ease and speed of spinning up new services and customer experiences and adjusting existing ones, everyone is able to work in small teams of five or six people that handle segments of an application, whether it is for online checkout, physical store checkout, or order management. They now work more like a software company than a retail company.

The Google Cloud technologies helped expand the e-commerce strategy to third-party sellers and create a new digital marketplace. Other merchants can easily join this ecosystem via the API platform. Today, they support more than 3,300 vendors and offer 4.3 million SKUs.

The goal has been to transform from a traditional retail company with a digital presence to a digital platform with a physical presence and a “human touch”—and now they are much closer to that vision. Customers in Brazil enjoy the convenience of ordering from their computers or smartphones, but still appreciate going to stores to pick up their items. In fact, two-thirds of Brazilians buy this way. To make it even easier for their customers, they built 12 in-store apps that their salespeople use to make the once-slow sales process much faster, which helped boost physical store sales 25.8% in 2018.

About Magazine Luiza

Founded in 1957, Magazine Luiza is a technology and logistics company focused on the retail sector. In 2018, it recorded year-over-year growth of 60% in e-commerce sales, reaching a volume of 7 billion Brazilian reais (nearly 2 billion in USD).

Industries: Technology
Location: Brazil
Google Cloud Platform logo

12 Months FREE TRIAL

Try Kubernetes Engine, BigQuery, and other Cloud Platform products with $300 in free credit and 12 months.

TRY IT FREE
Google Cloud Platform logo

12 Months FREE TRIAL

Try Kubernetes Engine, BigQuery, and other Cloud Platform products with $300 in free credit and 12 months.

TRY IT FREE