Composable commerce has gained a lot of traction in recent years as companies build out their digital commerce platforms. The concept has lured many brands with promises of speed, agility and long-term cost-effectiveness.
But the results haven’t always been up to par. In fact, some attempts at fully composable commerce have been dismal failures.
It’s important to get past the hype to understand what this emerging model means, the pros and cons, and whether it’s right for your business.
Composable commerce is a modular, building-block approach to digital commerce that allows businesses to create tailored commerce experiences by integrating best-of-breed components. It leverages low-code tools, making it accessible for business users to assemble commerce functionalities based on their unique needs.
At its core, a composable commerce architecture relies on Packaged Business Capabilities (PBCs), which are modular, functionally complete software components like search, checkout, and payments. These PBCs communicate through APIs, enabling flexibility and scalability.
Unlike traditional monolithic platforms, composable commerce platforms use a microservices-based architecture that separates front-end and back-end systems, enhancing agility and innovation. It also embraces cloud-native and headless principles, ensuring seamless integration and adaptability. This approach not only supports high personalization and superior customer experiences (CX) but also provides the agility needed to quickly respond to market changes, making it an ideal solution for both B2B and B2C enterprises
Gartner coined the term in 2020. Andy Hoar, CEO of Paradigm B2B and former Forrester Research VP and research analyst, interprets it as the “concept of weaving together a collection of modular and functionally complete “Packaged Business Capabilities (PBCs)” (e.g., search, PIM, payments solutions) to deliver a differentiated digital commerce experience.”
Organizations that have adopted a composable approach will outpace their competitors by 80% in terms of speedy implementation of new features, according to Gartner.
A composable commerce architecture achieves its modularity through the use of microservices. These microservices are loosely-coupled, fine-grained services that communicate via lightweight protocols. This differs significantly from monolithic approaches where there is tight coupling between front-end and back-end components, leading to less flexibility and higher maintenance complexity.
Furthermore, composable commerce solutions extend beyond the principles of headless commerce. While headless commerce involves decoupling the front-end from the back-end, allowing for faster front-end innovation, composable commerce takes it a step further. It provides a fully customizable e-commerce system where every component, from search to checkout, operates independently yet cohesively. This comprehensive approach enables businesses to innovate rapidly and create highly personalized customer experiences, all while maintaining the flexibility to adapt and scale as needed.
The all-in-one suite once dominated the B2C space, but headless commerce (also referred to as microservices) is emerging as the latest way to purchase commerce capabilities, with retailers moving towards cloud-based, service-oriented architectures that implement commerce solutions in a more modern fashion.
In the present “age of the customer” and with the rapid rise of AI in enhancing customer experiences, e-commerce businesses must be agile to meet evolving customer demands. Retailers who fail to integrate new functionalities and technologies will struggle to attract and retain customers. Composable commerce facilitates meeting specific business needs and quickly responding to market changes. By adopting a composable commerce system, retailers can spend less on customer acquisition while staying competitive and adaptable in the fast-paced digital landscape.
Agility is crucial for businesses aiming to thrive in today’s market. Composable commerce allows companies to adapt swiftly to changing customer demands and technological advancements. By using microservices and APIs, businesses can rapidly implement new features and updates, ensuring continuous innovation and maintaining a competitive edge.
Composable commerce offers unparalleled flexibility, enabling businesses to experiment with new models and integrate advanced technologies seamlessly. This modular approach lets companies select the best solutions for their specific needs, fostering innovation and enabling quick strategic pivots without the constraints of traditional systems.
Composable commerce empowers businesses to deliver personalized and seamless customer experiences across all touchpoints. By leveraging modular components, companies can tailor their e-commerce platforms to individual customer preferences, enhancing satisfaction and loyalty. The integration of best-in-class tools ensures a consistent, high-quality experience across all channels.
A significant advantage of composable commerce is its ability to future-proof a business’s digital strategy. By avoiding vendor lock-in and maintaining technological independence, businesses can adapt to new trends and technologies with ease. This approach allows for incremental upgrades, safeguarding current investments while positioning businesses for long-term success in a constantly evolving digital environment.
With the digital commerce platform at the center of digital interactions and engagements, more brands are eyeing composable commerce.
In a recent Oxford Economics survey, nearly half of B2B executives said digital commerce has become the primary channel for selling engagements.
Customers now have many more digital channels than ever with which to interact with businesses, including:
Organizations need to be super agile and quickly adapt to ever-changing customer behaviors and expectations. Customers want seamless omnichannel experiences, fast responses to inquiries. top-notch order fulfillment, and personalized and engaging product recommendations.
Interest in headless commerce solutions is surging, but some vendors are creating confusion about the technology. Learn what headless commerce really is – and what it's not.
With fewer limitations, digital marketers also can create unique experiences to drive greater engagement and customer loyalty.
According to an Aberdeen Strategy & Research report, 45% of CX leaders say the top challenge for keeping up with changing customer expectations is that increased competition requires differentiating based on customer experiences.
An advantage of composable commerce is that a brand can deploy changes faster; it doesn’t need to update the entire commerce application; the specific microservice can be updated instead of all components.
In the Master B2B Un-Webinar: Is Composable Commerce and All or Nothing Proposition, Hoar listed the benefits of composable commerce as:In order to succeed with fully composable commerce, you need a high degree of digital maturity and skilled IT resources (more on that below).
And expect higher initial costs since this approach usually means stitching together multiple best-of-breed solutions, which brings another layer of complexity, from licensing costs to maintenance.
Summing up the drawbacks of composable, according to Hoar: Digital transformation in retail is now mainstream. Find out how much e-commerce has grown and the best retail strategies for success.
Examples of composable commerce are everywhere, but you might not know it.
As Joe Cicman, senior analyst, digital transformation at Forrester wrote, digital maturity should dictate what technology to use.
Most organizations simply aren’t equipped to take advantage of a fully composable, microservices-based solution. These solutions require a high-level of digital maturity, technical resources, and time to stitch everything together to create the digital experience they envisioned.
A better method is a hybrid system where you have the freedom to leverage a composable approach on key capabilities that provide differentiation and leverage out-of-the-box functionality for other capabilities.
Usually, organizations can leverage the built-in capabilities that are API-enabled and get 80% of the way, then augment it with micro and macro services to tailor to their unique business needs.
This approach saves both time and resources, and reduces headaches while achieving your goal of an agile commerce platform that’s purpose-built for your business.
However, technology should be an enabler to the business goals of an organization, not the goal itself. The goal should be to increase agility to meet changing customer demands and grow the business.
Look for an agile solution that provides the following capabilities and benefits: Digital commerce encompasses all of the touchpoints and processes in the consumer journey. This means that all of the tools, processes, and technologies used to create the online offer are critical to the overall definition.
A fit-for-purpose approach accomplishes this by taking the best aspects of monoliths and fully composable commerce models. It provides the core commerce functionality out-of-the-box with extensibility features to cover unique business cases.
A fit for purpose approach helps accelerate time to value, reduce costs, increase scalability and agility, while reducing headaches and the need for large developer resources.
