Sep 05, 2021

Composable commerce is a far more flexible and modern approach to e-commerce compared to a ready-to-use, static commerce platform. In this blog post, we talk about how online businesses can benefit from it.

Composable commerce is one of the biggest trends in e-commerce, but what does it actually mean?

Composable commerce refers to combining different modules, which each have a specific function or capability, to create a digital commerce solution.

In business terms this translates to building your digital sales platform using a best-of-breed strategy where every component is optimized to support your business goals and KPIs.

Combining Modules: Packaged Business Capabilities

Each individual module is self-contained and is designed to deliver a specific digital commerce function such as a search, personalization, marketing automation, content management, customer relationship management, or analytics. These modules are often referred to Packaged Business Capabilities (PBC).

Companies can choose what capabilities they want in their digital commerce solution and identify the most suitable modules from across a variety of expert vendors. It doesn’t matter if different vendors provide different modules, as they can all be integrated to work together.

Each PBC shall have a clear business value that maps to your go to market strategy. The idea here is that the combination of the integrated modules should add up to more than the sum of the individual parts.

So, if we have all these parts, is there a commerce platform in this landscape? Yes, the commerce platform is also a PBC that is responsible for orchestrating the commerce part of the equation. It usually has data and workflows for items such as product catalog, order, price, and customers, to name a few. It either accesses this data via APIs (via true MACH architecture) or has it stored and managed in the e-commerce platform. By adding a headless CMS, you can start building the presentation of your online store and create the end-user experience.

As such, composable commerce is a far more flexible and modern approach to e-commerce compared to a ready-to-use, static commerce platform. It enables companies to create the perfect digital commerce solution for their individual business and the best experience for their specific customer base.

What Are the Benefits of Composable Commerce?

Composable commerce is the opposite of the one-size-fits-all approach. As such, it offers a lot of operational benefits to commerce businesses.

For one, it completely changes the way that businesses approach digital commerce. It enables them to put the customer experience first and to build the solution to meet that through their choice of modules.

A traditional e-commerce solution typically has all elements supplied by a single partner. While this has worked well in the past, it’s increasingly difficult for a single company to provide all of the functionality that customers expect from a modern digital commerce offering. Composable commerce lets businesses cherry-pick the best of the best from different vendors and enjoy the benefits in one integrated solution.

A composable commerce solution enables businesses to quickly bring new functionality to market and gain early mover advantage.

In addition, digital commerce has expanded in recent years far beyond the e-commerce website into all sorts of new channels and touchpoints, which creates additional requirements for functionality. Some of these needs can be quite complex for businesses, such as omnichannel personalization, and therefore difficult to create in a traditional e-commerce system.

This modern landscape is also ever evolving. New customer behavior and technologies can go from niche to mainstream incredibly quickly. As such, companies need to move faster than ever to meet these new expectations. A composable commerce solution enables businesses to quickly bring new functionality to market and gain early mover advantage.

Rather than building a new function from scratch, which may not work within their existing set-up, companies can choose a best-of-breed module which can be quickly plugged into the composable commerce platform. In turn, they will know from the start that their chosen module will work alongside the other modules in the composable commerce solution without any conflicts or friction.

The flexibility of composable commerce is one of its biggest strengths. Businesses aren’t investing in a system that will be defunct in a matter of years or months. Instead, their digital commerce offerings can flex with their customers simply by adding or changing modules.

Composable commerce also offers businesses greater control over their digital commerce offering. They get to choose which functionality they want to include rather than being limited by what their choice of platform or provider allows.

The benefits of a composable commerce approach can be categorized in three main areas:

Investment

The expected lifetime of your platform will increase significantly since you will be able to adapt as you go, rather than do a heart and brain surgery every 3 or 5 years. You will also be able to add new sales channels when customer demand change at a lower cost.

Competition

With the ability to move faster you will drastically increase the chances to outperform competition. Gartner estimates that by 2023, companies who have implemented Composable Commerce will be up to 80% faster in adapting to change.

Organization

By utilizing the strength of a PBC strategy you bring your digital commerce deeper into your organization and create a better understanding and awareness of all touchpoints and channels throughout the organization. This, combined with the right tools, will empower your employees and your entire company to be more creative and experimentative. Try-fail-learn (and try-fail-succeed) comes at a much lower cost and breathes creativity.

Webinar on-demand

The C-level Guide to Composable Commerce

In this webinar you'll learn how to build your business case for composable commerce and get your C-suite onboard with a new approach.

What Are the Cons of Composable Commerce?

There is always a flip side of a coin. While the benefits well exceed the negatives there are some implications that you need to be aware of when considering a composable commerce setup for your business.

With multiple modules or best-of-breed solutions comes multiple vendors. Do you have the time and resources to manage these different vendor relationships? If not, you might want to look for a partner that can take on the entire responsibility and act as your single point of contact.

Different applications may also involve different SLA levels, different traffic spikes and multiple user interfaces for your back-end team. Here it is important to ensure you have the right resources and competences to monitor and manage this to ensure you maximize outcomes from each best-of-breed solution.

In the past you would also hear that the initial investment of composable commerce is high. I would say that this is no longer true. System integrators have adapted to the new era by creating pre-packaged solutions which gets you up and running much quicker. The combined value of short time to first release and modularization is flexibility; if there is one component that is better suitable for your company, it won’t be a big investment to adapt that before or after the first release.

Is Composable Commerce Suitable for All Businesses?

There is a widely held misconception that composable commerce is only for companies with a high level of tech savviness in combination with their core business. A couple of years ago that was probably right. Today, the technology has adapted much more towards “mainstream”.

Some technical proficiency is required (as in any other platform being implemented for your company), but composable commerce is actually less a matter of technology and more one of mindset.

It is also important to understand that it does not have to be composable or not. Instead, you should think about it as a composable scale where you can start small by utilizing existing systems in a way that is beneficial for your company, and then set a roadmap towards fully composable.

Where you, as a company, land on that scale is based on 4 parameters:

How do you see your market and customer requirements and expectations change in the future and how fast do you need to respond to that?
How are business models evolving in your industry or over different markets?
How much will your value proposition and your got to market strategy shift in the future?
How is your IT roadmap set for the future?

This means that, to some degree, composable commerce is suitable for any online business that is thinking about the future – which should be every business, be it B2B, B2C or D2C.

Composable commerce is actually less a matter of technology and more one of mindset.

How Does Composable Commerce Drive Creativity?

As discussed in the benefits section above, composable commerce lends itself to reinvention. It offers an evolutionary take on development by enabling companies to quickly switch out and add in new functionality as their business grows and customer requirements shift.

As such, a composable strategy brings your digital commerce deeper into your organization and creates a better understanding for all channels and customer touchpoints throughout the entire business. It will also empower your employees to be more creative and foster an experimental, “try and fail” (and “try and succeed”) culture.

From an ROI perspective composable commerce offers real value long-term by lowering the cost of ownership and enabling companies to develop new feature implementation quickly.

What Are the Key Elements of a Successful Composable Commerce Project?

Some of the most important considerations in composable commerce is to prepare your organization, setting the goals, and choosing the right partner, preferably one that has the experience of building successful composable solutions for similar businesses.

By working with a composable commerce expert, companies can ensure the success of their project through using a proven model for understanding needs and translate that into your future platform.

Another important element is defining the scope of the composable commerce system. The possibilities in composable commerce are almost endless which means projects can quickly spiral in terms of time and cost if there isn’t an end goal in sight. By identifying what your business wants and needs from the composable commerce system, you can set limits in order to ensure the project gets delivered on budget and on deadline.

The great thing about composable commerce is that this initial scope can always be built upon and expanded further down the line. This means your teams can feel empowered to innovate in the digital commerce solutions with the knowledge that things can easily be changed or added if required. They don’t have to worry about being stuck with something that doesn’t work as they expected.

The great thing about composable commerce is that this initial scope can always be built upon and expanded further down the line.

Composable Commerce in Modern Commerce

Ultimately, composable commerce demonstrates the key principles of modern commerce.

Modern commerce isn’t a fixed concept. It can actually look quite different from one business to another. This is because modern commerce recognizes that the commerce landscape is always evolving, and change is happening record-fast.

As such, modern commerce isn’t tied to any specific channel, tool or technology because these are the elements that are always changing. Instead, modern commerce is defined by processes and management style.

Similarly, composable commerce is not restricted by specific technologies or platforms. It is an open, modular approach that offers flexibility to commerce businesses. Instead of trying to predict exactly what will happen in order to build a digital commerce solution that serves a single future, composable commerce allows you to respond to whatever the future holds – even the unexpected.

Contact Avensia to learn more about commerce solutions.