Why Composable Commerce is the Future of E-commerce

Retail businesses striving for agility, scalability, and personalization are looking at composable commerce platforms as a crucial solution, with Gartner predicting 30% higher revenues for adopters by 2025. Composable Commerce integrates third-party tools seamlessly, enhancing flexibility and growth while avoiding disruption. Read on to know more about the evolution, what may suit you, and the returns that you can expect with best-of-breed microservices.

Choice is often an underrated luxury. Though retail businesses push for more agility, scalability, and personalized customer experiences, it often becomes a catch-up game of trends. Customizations can become a reality only when the tech stack can be adapted to business needs. Composable e-commerce helps retailers stay ahead of the curve with enhanced flexibility and adaptability.

Gartner predicts that organizations pursuing composable investments will enjoy 30% higher revenues than traditional-minded peers by 2025. Imagine being able to swiftly integrate third-party tools, like a top-tier inventory management system or an AI-driven chatbot for customer support, without disrupting your entire platform. Composable commerce allows you to do just that, enabling you to pick and choose the exact components your retail business needs at any given time.

Data Source: Insider Intelligence

How Composable Can Help You Soar

Composable commerce empowers retailers to seamlessly incorporate top-tier applications for specific functions. It meticulously disentangles every facet of the commerce infrastructure, encompassing content management, site search, and personalization. This technology is a progression from headless architecture, extending far beyond the simple disconnection of front-end and back-end systems. Retailers reap the benefits of unparalleled adaptability, wielding the power to modify individual components without the fear of disrupting their entire operation. This agility enables swift adjustments in response to market fluctuations, fostering a climate conducive to scaling innovation.

Here is a snapshot of what composable can do for retailers:

• Efficient Approach: Independent component functionality facilitates swift changes without system-wide disruptions. Avoids the complexities of monolithic systems, reducing development times.
• Cost-Effective Customization: Pay-as-you-use model reduces overall tech costs. Flexible resource allocation based on specific retail business needs.
• Innovative Experimentation: Quick implementation fosters an environment for innovation. Freedom to experiment with new features or business models seamlessly.
• Tailored Solutions: Plug-and-play components adapt to unique needs, enabling omnichannel experiences. Escape proprietary technologies, fostering coding and application flexibility.

Composable commerce serves as a catalyst for transformative change as it liberates businesses from the constraints of rigid, monolithic structures, fostering a dynamic environment where innovation flourishes. The freedom to evolve individual elements independently ensures that updates and enhancements can be executed swiftly and seamlessly, empowering merchants to stay ahead in a rapidly evolving market landscape.

Risks of Ignoring Modern Architectures

In the past couple of years, the buzzword has been composable commerce, which followed the murmur around headless commerce, precisely indicating the pace at which technology is evolving to power retailers.

Headless commerce disentangles the frontend and backend of a web store, allowing flexibility and quick adaptation to user interfaces. Taking this concept, a step forward is composable commerce, isolating additional functionalities like CMS and payment processing, enabling seamless integration of various tools. This architecture empowers businesses to pick and choose components, ensuring agility, scalability, and personalized customer experiences while staying ahead of market trends.

Navigating the Composable Commerce Transition

Transitioning might seem daunting, but with a phased approach, retail businesses can smoothly evolve:

• Progressive Enhancement: Start with a focus on front-end improvements for a cost-effective shift. This strategy offers quick results, lower costs, and the flexibility to migrate services at your own pace.
• Full-fledged Re-platforming: For ambitious businesses, building a new composable system that aligns with current operations is worth considering. Despite the initial costs and the need for extensive testing, the long-term rewards in flexibility, adaptability, and performance are considerable.

Remember, the expenses linked to migration and API testing should be balanced against the potential growth in revenue and operational benefits.

Assessing Requirements Ahead of Investments

The cost of flexibility is high. Developing a composable commerce platform involves high costs due to separate frontend and backend development, but often retail businesses become blind to the hidden costs due to inflexibility that includes the inability to create customer-engaging commerce experiences, rising technical debt, and integration expenses erode the value of all-in-one platforms.

Gartner and other analysts affirm composable commerce's role in TCO reduction; Gartner predicts 30% lower B2C digital commerce platform costs by 2023 compared to 2019. The adoption of composable architectures is anticipated to halve IT expenses for managing SaaS operations by 2024. While inadequate planning can result in increased Total Cost of Ownership (TCO), utilizing out-of-the-box frontend solutions offsets expenses, integrating UI and API orchestration, plus pre-built integrations with major e-Commerce platforms.

Scaling New Heights with Composable Commerce

The ability to transform can be a superpower in times of crisis, and that’s what US-based Mission Linen Supply realized with commercetools. The company, a leading provider of products and services to hospitality, medical and industrial businesses, was hit hard by pandemic closures when it swiftly pivoted using commercetools, leveraging a new B2B online platform. The shift introduced crucial revenue streams—masks, sanitizers, and cleaning products—enabling the company to navigate the crisis.

By May 2020, they launched a digital storefront, expanding their catalog by 200% to over 15,000 items. This strategic move countered the loss of traditional sales channels and personal interactions, ensuring sustained business growth. commercetools empowered Mission Linen to adapt rapidly, strengthening their B2B offerings and establishing a resilient digital presence, marking a pivotal transformation in the face of unprecedented challenges.

Similarly, Ulta Beauty, the top US beauty retailer, achieved pathbreaking success when the company decided to move on from its outdated platform, prompting a complete overhaul for a modern commerce infrastructure. Opting for a headless and MACH strategy was inevitable to swiftly scale and adapt their platform with increased flexibility. The transition empowered Ulta Beauty with commercetools, facilitating a remarkable transformation.

Embracing this approach brought forth impressive results: 1.3 million SKUs, launching Buy Online, Pick Up In Store (BOPIS) feature within seven days, and harnessing the power of 300 Commerce APIs. This strategic shift allowed Ulta Beauty to maintain its position as the go-to destination for cosmetics, fragrances, skincare, haircare, and salon services while future-proofing their tech architecture.

Choose to Get Ahead

A 2022 Incisiv study found more than 50% of retailers suspect their current platforms can’t support their business needs over the next year, indicating the rigidity of the architecture of their legacy platform. “What this ultimately means is you have to make some compromises — but what retailers need now is technology that enables them to meet their customers where they are,” Preseetha Pettigrew, VP, Global Partnerships at Contentstack.

This is your chance to choose. With the right technology partner offering you customized solutions, composable commerce can become the much-needed wind under your wings.