Last updated: Composable commerce: Pros, cons, examples

Composable commerce: Pros, cons, examples


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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.

Text stating SAP is named a leader in the 2023 Gartner Magic Quadrant for Digital Commerce. You can click the image to access the report.

What is composable commerce?

Composable commerce is a modular, building-block approach to digital commerce. It extends the modularity principles in which business users can construct commerce experiences using low-code tools. Composable commerce makes it easier for B2B and B2C businesses to use building blocks based on their own unique needs, making personalization and great CX a reality within large 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.

Fully composable commerce with microservices is modularized instead of monolithic, meaning that commerce functionality is arranged as a collection of loosely-coupled, fine-grained services, communicating through lightweight protocols. A monolithic approach has tight coupling between front-end and back-end components.

Composable commerce is a more comprehensive approach than headless commerce, which is the de-coupling of a web store’s front-end from the backend.  Headless architectures enable companies to innovate faster on the front-end while composable commerce enables a fully customized e-commerce system.

What’s driving demand for composable commerce?

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:

  • Webstore – desktop and mobile
  • Mobile apps
  • Marketplaces
  • Kiosks and digital point of sale
  • Internet of things – smart speakers, smartwatch, etc.

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.

Benefits of composable commerce: LEGO-like building blocks, customizable, flexible, and fast

Composable commerce offers the promise of greater flexibility and freedom to choose best-of-breed solutions. Similar to LEGO bricks, the final creation can be custom-built. This gives an organization full control of each function and tailor it to exact business needs.

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:
  1. Modularized (vs. monolithic)
  2. Flexible/extensible (swap parts out as needs change without affecting the core, which avoids lock-in)
  3. Tailorable for unique experiences (but some custom development may be required)
  4. Leverages best-of-breed or custom-built solutions (vs. native functionality)
  5. Delivered via microservices-based architecture

Reality bites: The downsides of composable commerce

The benefits of fully 100% composable commerce platform are certainly appealing, however, there’s a big tradeoff to gain that extra freedom and flexibility.

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:
  1. Not suited for digitally immature organizations
  2. Usually requires experienced and often expensive developers (there’s no instruction manual)
  3. Often requires a fairly modern technology architecture (doesn’t play well with old systems)
  4. Temptation to build things because you can and some cases must (UIs, etc.)
  5. Requires managing multiple vendors and maintaining critical “connective tissue” (opposite of vendor lock-in, but still problematic)

Boost CX and profits with composable commerce. Learn more HERE.

Composable commerce examples

Examples of composable commerce are everywhere, but you might not know it.

Here are some examples of composable commerce and how it integrates into front and backend experiences: 

  1. Integration with digital shopping carts for a faster, frictionless/seamless shopping experience. (Example: Bolt Financial, Inc.)
  2. Integration with an order management system to optimize order fulfillment, lower shipping costs, and provide real-time visibility of inventory from all channels.
  3. Integration with personalization solution to create more targeted marketing campaigns and tailored recommendations that drive higher conversion and basket sizes (Examples: SAP Emarsys and Coveo)
  4. Integration with marketplace vendors to increase product selection and drive more revenue. (Example: Mirakl)
  5. Integration with payment providers to give shoppers options on method of payment (Example: Adyen and PayPal)

Taking a hybrid approach

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.

Best of both worlds: Striking a balance with your commerce platform

Moderation is best for most things in life, including a commerce platform. There are benefits with both the traditional, monolithic approach and the newer fully composable with microservices method.

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:
  • Flexible and extensible to enable experimentation and differentiation
  • Scalable and reliable to support any demand peak
  • Secure and trustworthy to ensure privacy, integrity, and authentication
  • Functionally rich (including industry-specific capabilities)
  • Continuous innovation to help you take advantage of new opportunities
  • Easy to integrate (and pre-integrated) to allow for frictionless experiences
  • Full API coverage for quick to access each commerce function
  • Support for any business model or channel to help you expand into more markets
  • Easy to consume and seamless to upgrade
  • Built with the business user in mind to shorten the learning curve
  • Modular and headless to enable new digital channels

Fit for the job, good for business

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.

Welcome to composable commerce.

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