While the one-size-fits-all approach may work wonders for some clothing items being sold in a store, for retailers building enterprise tech stacks this doesn’t necessarily yield the best results as it can restrict a business’ ability to adapt to new market conditions or customer preferences, which can often change at the drop of a hat.
Instead, enterprises often need the flexibility to build a technology stack that fits their unique requirements and gives them the mix of tools and platforms to adjust as needed. Composable commerce allows businesses to pick and choose the e-commerce, content management, CRM and other components required to make up an end-to-end seamless, coherent, effective and complete experience for customers and users alike.
In this article, we’ll break down composable commerce and explain why brands adopt it to unlock new customer retail experiences.
What is Composable Commerce?
Composable commerce is an approach to building an e-commerce stack that involves choosing best-of-breed components and arranging or composing them into a tailored solution that meets business needs.
Rather than relying on a solitary vendor that provides a monolithic e-commerce stack, composable commerce is achieved through packaged business capabilities (PBCs) that share information mostly via APIs.
As Gartner highlighted when the term was first introduced, “fixed application experiences no longer meet business and customer requirements.” They added that businesses should instead turn to composable architecture and packaged business capabilities.
PBCs express distinct capabilities that often consist of groups of microservices that serve and process the specific functions of a capability. For example, in a modern composable commerce stack, a company may use different PBCs to handle commerce, content management, payments, fulfillment, and product discovery. These PBCs can be arranged in whatever way suits the organization best, and unlike in a monolithic system, each PBC should be able to be replaced without affecting other parts of the overall system.
With composable commerce, a different vendor can provide each PBC, which enables businesses to avoid the drawbacks of a monolithic or one-size-fits-all approach. It also allows them to take a granular approach to building their stack using multiple tools or simply a few.
Composable Commerce vs. Headless Commerce
Enterprises considering a composable commerce approach may be familiar with headless commerce. While there are similarities between these two approaches, their differences are notable.
Headless commerce refers to an approach where the frontend presentation layer of an ecommerce store is separated from the backend commerce functionality. Built on the same principles as a headless CMS, it enables businesses to build an e-commerce storefront on any channel so customers can shop where they want. Digital kiosks in the mall, mobile apps, smart TVs, and many other touchpoints have suddenly become a potential shopping channel with the same experience across touchpoints.
While headless commerce decouples the frontend, that doesn’t mean the same flexibility is available in the backend. Taking content management as an example, businesses can take a headless approach with a traditional CMS like WordPress and deliver content to channels other than just a desktop. Yet, they won’t be able to easily integrate with other tools or platforms on the backend and loosely integrate with other systems how they want to.
The same is true for some legacy commerce systems that offer headless architecture, but not enough modularity to truly be composable. Headless commerce is a starting point of composability. But composable commerce goes a step further to provide the same flexibility for the entire tech stack so that businesses can connect different tools to the commerce solution via APIs on the backend and have the flexibility to adjust.
Why Brands are Adopting Composable Commerce
Traditional commerce solutions were ideal for businesses a decade ago when e-commerce hadn’t grown to its current size and had fewer requirements than today. Headless commerce provides flexibility on the front but can still leave enterprises struggling to break free from a monolithic stack. Retail businesses are adopting composable commerce to provide the flexibility to deal with the challenges of the modern environment and growing expectations of customers .
Retail and E-commerce Landscape Changes
The customer journey has changed from the times of traditional commerce. The number of consumer touchpoints has increased tremendously. Whereas customers may have only shopped with a brand in a brick-and-mortar store or on their desktop, they now interact via social media platforms, tablets, mobile apps, smart speakers, and other IoT devices. Managing the customer experience across these multiple channels is increasingly difficult with traditional commerce systems. Hence, composable commerce has emerged as a suitable solution.
Modern customers demand retailers provide them with a high-quality and personalized experience, and 56% of them flat-out expect it when they receive an offer. They want to find exactly what they’re looking for when they want it and be treated as an individual with their own unique preferences.
However, consumers will just as quickly move away from any brand that doesn’t provide them with this type of experience, and 76% of them will be frustrated with the businesses that fail to deliver the personalized experience they crave.
Retail brands are also adopting composable commerce due to the advancements in technology. The traditional commerce approach worked well because e-commerce was still in the early stages. As such, the all-in-one suites were more than capable of providing what most businesses needed.
However, today, technology has advanced rapidly, providing more options for customers and businesses alike. Now, no single system can serve everchanging requirements and enable companies to continually innovate while adopting new technologies. But with composable commerce, brands can build and customize the best solution for them.
Benefits of Composable Commerce
Retail enterprises that take a composable commerce approach can realize several benefits that allow them to deliver an engaging retail customer experience and differentiate themselves from the competition.
Freedom and Flexibility
Composable commerce gives businesses the freedom and flexibility to build an ecommerce stack that meets their unique needs. This allows them to choose the components that make up the stack and adjust their requirements over time without pigeonholing into a one-size-fits-all solution that may prove too costly or too restricted for their specific use case. Instead, retailers can select components, technologies, and customer channels with greater freedom than before.
Omnichannel Experiences
The door to omnichannel shopping experiences is opened with composable commerce. Brands can more easily create and manage storefronts on different devices. They can also share data from different systems, including modern content management systems (CMSs) and customer data platforms (CDPs) with the commerce system. This helps them gain a clear understanding of the customer and deliver a seamless experience no matter where they choose to shop.
Scalability
As customer demands increase or business focus evolves, companies must scale their eCommerce stacks. With a traditional commerce approach, this can be expensive and time-consuming as the entire system needs to be replaced. Composable commerce streamlines scalability by enabling individual services to be scaled independently.
No Vendor Lock
The threat of vendor lock is mitigated with composable commerce. Instead of being tied to a single vendor in a tightly coupled architecture, composable commerce allows businesses to swap out individual components if needed. If a more innovative or cost-effective payment processing service becomes available, it can be seamlessly integrated without disrupting the rest of the system. Vendor lock is reduced, and adaptability is increased.
Enhanced Personalization
Composable architectures enable better personalization by allowing businesses to easily integrate specialized services for customer profiling and recommendation engines. With a better insight into the customer journey and the ability to quickly pull data from any source, personalizing the customer experience becomes much easier. Retailers can continually optimize and tailor their customer experiences without overhauling the entire system.
Improved Customer Experience
Omnichannel shopping, improved personalization, and the ability to manage end-to-end experiences all lead to an improved customer experience. Composable commerce makes keeping up with customer expectations and innovating much easier.
Enterprises can swiftly adopt new features that improve the customer experience, such as integrating a chatbot for real-time customer support or a third-party service for advanced product visualization.
Faster Time to Market
Speed is one of the key knock-on effects of composable commerce. Businesses can quickly add or remove tools without it being overly time-consuming. This also helps with launching new storefronts on emerging channels, flash sales, or seasonal campaigns. Building and implementing the new features or adding tools and plugins to support them can be achieved faster.
Building a Strategy for Composable Commerce
Enterprises considering composable commerce need to devise the right strategy that will allow them to safely adopt the approach without increasing their total cost of ownership in the long term.
- Assess company goals
The first step in building a composable commerce strategy is identifying the company goals. Decomposing a monolithic suite and replacing it with modern modular components can be highly beneficial in the long run. Still, there will be increased costs in the initial stages as enterprises enter into new licensing agreements, implementation, integration and migration phases.
Composable commerce should align with the overall business strategy to ensure it is worth it. Suppose a medium-sized enterprise is operating relatively efficiently with their existing stack, and they only want to increase sales by a few percentage points, it may be ineffective to adopt composable commerce. The return on value should be provable and the business case should be clear.
- Assess target audience
The target audience is another factor to consider when building a composable commerce strategy. An enterprise retailer operating in the B2C sector might want to focus on delivering a personalized experience and improving customer engagement, which necessitates personalization engines, recommendation systems and similar tools.
On the other hand, a company focused on the B2B sector might have a target audience who benefit from bulk ordering, customized pricing structures, and robust inventory management to enhance efficiency and streamline procurement.
- Architect components
Component selection is a critical aspect of building a composable commerce stack. Multiple pieces may make up a composable stack, but that doesn’t mean they all need to be adopted at once. After determining the target audience, choosing the architecturally critical components and fit those into the to-be composable architecture is essential.
For example, the B2C retailer mentioned earlier might prioritize a personalization engine and a headless CMS, whereas the B2B company might focus on a new commerce platform first. Regardless, any business that adopts composable commerce will have the flexibility of choice they need.
Unlock a Complete Commerce Experience
Composable commerce can provide an answer for retailers that want to modernize their e-commerce stacks and start building for the future. It offers increased flexibility, reduced vendor lock-in, enhanced personalization, and, most importantly, a way to meet continually changing customer expectations.
You need the right expertise to build the ideal commerce experience for your business. Content Bloom is an enterprise digital agency that works with clients to deliver solutions that improve the bottom line. We have decades of experience working with leading brands across several areas, such as content management, headless architecture, custom development, and digital marketing, all of which play a role in an effective composable commerce strategy.
Ready to get started on your composable commerce journey?
