Over the past 30 years, retailers have seen many changes in the way they do business. Creating an ecommerce storefront was once an afterthought to the brick-and-mortar presence that made up the bulk of a retailer’s revenues.
Yet simply having a digital storefront isn’t enough anymore. Retailers need a strategy that addresses not only the customer journey but also the technical stack that supports their online commerce promotions. The growing trend of composable commerce illustrates the move away from the monolith of a single platform for a retailer’s storefront.
Software giant SAP was quick to jump on this trend. What is driving the interest? Riad Hijal, global head of marketing and solutions for SAP Commerce, told Multichannel Merchant there has been a shift towards best-of-breed over best-of-suite, where the former drives value, differentiation and ROI. It’s also about getting away from composing everything from scratch, or having any single vendor be too dominant.
So, what exactly is “composable commerce” and why does it matter?
Building blocks that work together
Composable commerce, a term coined by Gartner, refers to a system of constructing and managing digital commerce programs that relies on individual or modular building blocks to create custom and flexible solutions. This approach allows brands to choose the software components that fit their unique business requirements.
Each component can be deployed and scaled independently. These individual pieces are referred to as packaged business capabilities (PBCs) and each serves a specific business function, all of which are connected via application programming interfaces (APIs). For example, the individual pieces may include:
- Core commerce (shopping cart, promotions, checkout)
- Customer identity management (access and identification)
- Customer data platform (personalization analytics)
- Search and search merchandising
- Ratings and reviews
- Service (customer support and FAQs)
- Intelligent chatbots
Why composable matters
According to Gartner, composable commerce will continue to grow in importance for enterprise software strategy, particularly for ecommerce. In a recent report, Gartner stated organizations with a composable approach will outpace the competition by 80% in terms of the speed of new feature implementation.
This shift is more than simply separating the front-end experience from the back-end technology powering retail sales. That separation is known as headless commerce. While headless is a good place to start for retailers looking to build a composable architecture, composable commerce takes this technical evolution a step further. It gives retailers the ability to divide their platform into individual services that all work together for one cohesive experience.
How composable commerce benefits business
It’s hard not to consider taking the composable path when you consider the many upsides, from flexibility to happier (and returning) customers. The main benefits include:
- Increased efficiency and profitability: With the choice of how to construct their solution, retailers can pick and choose what’s needed with little or no vendor lock-in. This flexible model for storefronts also allows them to eliminate the components they don’t need and focus instead on core business practices.
- Flexible business solutions: They can pick and choose which technologies are a fit. Retailers don’t have to commit to just one technology or one platform and be burdened by any limitations of those singular solutions.
- A better user experience: They can choose from best-in-class components, such as content management systems (CMS) and marketing automation software that better enable targeted, personalized shopping experiences. This includes customized product recommendations and personalized content. A strong solution should also incorporate intelligent search. Retailers don’t want to lose the customers they worked hard to get to their site simply because they can’t easily find what they came there for, or they don’t quickly see relevant content.
When it might not be ideal
There are also some challenges to consider and scenarios in which composable commerce may not be the ideal fit. For all its benefits, it can be complex and hence take longer to implement, while requiring more upkeep, technical knowledge and staffing. The challenges include:
- A longer path to market: An important decision factor with composable architecture is the time is takes to define and set up all the pieces Some retailers that have time limitations may be better off adopting a platform that enables customization of various elements but offers pre-built commerce components, giving them the ability to open shop quickly with a hosted solution.
- Intricate details require expertise: One significant hurdle to composable commerce is the technical know-how required to integrate your various PBCs and services. The components need to play together nicely to create a unified, seamless customer experience. Each component may have its own set of requirements, APIs, data structures and dependencies. Composable storefronts are more aptly suited for digitally mature companies with experienced engineering teams or partnerships in place to help bridge this divide.
- The sum of the parts may be high: With composable commerce architecture retailers pay for each component. If a large number of components is necessary to meet your storefront’s goals, maintenance and update costs associated with PBCs from different vendors can add up quickly.
There are many compelling reasons to build composable storefronts. Ultimately, the decision will depend on a variety of factors including the size of your organization and the time and budget requirements associated with your business goals.
Sergio Iacobucci is Senior Director of Ecommerce Marketing for Coveo