Composable commerce is the most recent technological iteration of the ecommerce industry. While it's not a brand-new term, it seems like everyone is talking about it these days. Why is that?
In this article, we will share about the concept of composable commerce, why it has remained a trend, and what advantages it brings to your ecommerce business.
How we have arrived at composable commerce
In the early stages of the rise of ecommerce, companies were able to build online stores with limited capabilities that could meet the demands of consumers in relatively small markets. It was a time when the primary concern of digital shoppers was the security of entering their credit card information. Do you remember?
Back then, a successful transaction was considered an excellent customer experience, and consumer expectations were quite low. These days, however, things are completely different.
Nowadays, ecommerce is a trillion-dollar industry that handles one out of every five retail transactions worldwide. In fact, Insider Intelligence projects that global ecommerce revenues will reach $6.3 trillion by the end of 2023, and the projection remains upward at least until 2026.
Following the impact of the COVID-19 pandemic in 2020, virtually all retailers were forced to create or enhance their digital presence. As expected, the increase in online competition exposed the shortcomings of older ecommerce platforms.
Traditional online stores, if we can call them that, were built on monolithic platforms or models that kept the frontend systems tightly linked to the backend architecture. This integrated system created complications when developing customized solutions for particular markets. Something remarkable with the emergence of social commerce, where conversation is a key element.
The so-called conversational commerce marked the demise, or at least the beginning of the end, of monolithic ecommerce platforms. The demand to talk with customers and personalize the experience are trends that have marked the search for an agile and adaptable architecture.
Instead of trying to fit their ecommerce requirements into their existing architecture, companies now need systems to work backwards. This is what ultimately fueled the rise of composable commerce.
What is composable commerce?
Coined by the consulting firm Gartner, composable commerce is a modular, flexible, and configurable approach to building and managing digital commerce solutions. In a composable commerce architecture, each component can be deployed and scaled independently, giving digital commerce companies the freedom to choose the software components that provide commerce capabilities to meet their unique business requirements.
Therefore, this new approach makes it easier for companies to build and customize their own ecommerce platforms, through the combination of independent components and modular services.
Instead of relying on a monolithic ecommerce solution, the composable commerce approach allows companies to tailor and combine various services and functionalities according to their specific needs. This implies the use of microservices, open APIs and a component-oriented architecture.
Flexibility and agility. These are the main objectives that composable commerce offers to companies that adopt this new approach. Thus, they can more quickly adapt to market changes and offer a personalized shopping experience to their customers. By making it easier to integrate third-party services and technologies, companies can create a highly scalable and adaptable ecommerce infrastructure.
Composable Commerce vs. Headless Commerce
Headless commerce has been the fundamental technology that introduced the separation of the frontend presentation layer and backend functionality. Composable commerce is a further evolution of this technology. Since it allows a company to divide its platform into individual services.
In a headless system, the system or front-end components often depend on a single backend. In a composable system, each business capability is independent. For most companies going down the path of composable solutions, a decoupled frontend is a great starting point for their digital transformation and evolution journey.
What are Packaged Business Capabilities (PBC)?
The composable commerce includes components known as Packaged Business Capabilities, or PBCs. These are a collection of microservices, that is, small independent services that work together and are bundled with Application Programming Interfaces (APIs) and event channels.
PBCs are designed to function as the building blocks of custom applications, such as composable commerce. More importantly, the design of each PBC is closely related to a specific and well-defined business capability.
When companies are looking for solutions to address specific problems, business teams often look for specific PBCs that provide the right answer to their needs.
To differentiate a microservice from a PBC, think of the former as the related components that make up the latter. An example of a common PBC is the digital store. For this store to work optimally, you need to have microservices that work as components.
In this case, the digital store will need the following microservices:
- shopping cart,
- payment process
- and customer information.
Each microservice can work independently of the others, but when implemented together, they can serve as an online store.
When the market needs morph once again—they will for sure—and you need more features, you can revisit your PBCs to incorporate additional microservices. Conversely, you can split PBCs with multiple microservices into smaller, more manageable ones with fewer components.
This is another example of the flexibility and future features of composable commerce. Instead of technology defining the capabilities of your equipment, now your needs will define the capabilities of your technology.
Main advantages of composable commerce
Composable commerce offers a number of advantages or benefits for companies looking to improve their ecommerce businesses. These are some of the most important:
Flexibility and agility for companies.
Composable Commerce allows you to choose the components within your electronic commerce systems that best suit your needs and requirements. With a modular approach to software components, you can select and configure the components that best align with your strategy and goals. Clearly, this may take a bit longer to set up, but it can greatly improve future business agility as you won't be locked into a monolithic solution.
Increased efficiency and profitability.
A modular approach allows you to select components that fit your business needs, reducing time and resources spent on unnecessary or inefficient items. This can save time and money in the long run by allowing you to focus on what matters: serving your customers and generating revenue.
Improved user experience.
With composable commerce, you can choose best-in-class components like content management systems and marketing automation software. That enables targeted and personalized shopping experiences, including personalized product recommendations and tailored content.
The challenges of composable commerce
It must be said, composable commerce can be more complex than a traditional all-in-one platform. By considering the following factors, you can decide if a composable commerce approach aligns with your needs and goals:
Proper integration between your different PBCs and services is crucial, as these components must work together to create a unified and consistent experience for customers. However, this can be complex and time consuming, especially if you and your team lack technical expertise. Each component can have its own unique set of contracts, APIs, data structures, and dependencies, which can be challenging to manage. Ultimately, unless your company is digitally mature, has an experienced engineering team, and has complex implementation requirements, composable commerce is probably not right for you.
In a composable commerce architecture, you have to pay for the individual components of the solution, which, depending on the number of PBCs from different vendors, can quickly lead to maintenance and upgrade costs. Keep this in mind in your strategic planning.
Slower speed to market.
If you want to launch quickly, composable commerce may not be the best solution for you. Since it's still a pro-code environment, it's best to adopt a platform that allows you to compose various aspects of your architecture, while allowing you to quickly get pre-built commerce components up and running.
How to get started with composable commerce
If after analyzing your case, you decide to move your business towards this new approach, it is good to know that the best thing about the transition to composable commerce is that you do not need to abandon your current technological platform at once. At Orienteed we believe that an incremental approach is much preferable, where you can decide which capabilities need to be decoupled and which modules need to be turned into microservices.
To help you get started with your transition to composable commerce, make sure you have team members who can work on your backend modules through an API-first approach.
In addition, you will also need your design and UX team to develop a consistent design for all of your proposed microservices and PBCs. This is especially crucial considering that composable commerce will likely lead you to purchase modules from different vendors.
Finally, you will need to decide on a trading platform and choose the necessary modules. For this task, you'll need to compare and contrast each provider's offerings in terms of ease of use, cost, modularity, and quality of customer support.
More importantly, you need to make sure that the platform you choose is API-first so that your integrations are truly business-focused. You should also remember that composable commerce means having the agility to adapt to the latest market trends. The chosen vendor's systems must not only be future-proof, but also deeply flexible.
Now is your turn!
If you've made it this far, you already know that the composable commerce approach offers a number of exciting and compelling advantages for businesses looking to take their eCommerce to the next level. Being modular and flexible, it allows companies to adapt and customize their ecommerce systems according to their specific needs and objectives. This provides greater flexibility and agility, allowing companies to choose the components that best suit their strategies and offer an exceptional user experience.
In addition, composable commerce helps drive efficiency and profitability by enabling companies to select and use only the necessary components, reducing time and resources spent on unnecessary items. This means that companies can focus on providing exceptional service to their customers and increasing their revenue.
The improvement in user experience is another prominent benefit of the approach. By choosing best-in-class components, companies can deliver highly relevant and personalized shopping experiences, resulting in more satisfied and loyal customers.
If you are looking to transform your ecommerce business and stay ahead in a constantly changing industry, contact us here, we would love to accompany you on this exciting and productive journey.
Digital Marketing Manager at Orienteed.