In today’s fast-changing business environment, agility is a necessity. With customers’ expectations continually evolving and the competitive landscape becoming more unpredictable, companies must have the ability to respond to changes to remain competitive rapidly.
Shopping online has become a much more complex process compared to traditional trade. Instead of simply going to the store, looking at the product, and buying it or continuing to look, online shopping requires navigating a long, winding „giant slalom” with many distractions. At each process step, users contact the brand through the website, mobile application, fan page, live video shopping, newsletters, and SMS notifications. A purchase can be made in any of these places. To provide customers with the best shopping experience, modern eCommerce must be flexible, intuitive, and engaging at every touchpoint. It requires a lot of flexibility, which on the one hand, can be ensured by the agile approach guaranteed by composable commerce and, on the other, by all-in-one platforms focusing on user experience at every point of contact with the brand.
As it may seem unclear when to decide on each approach, this will compare both and list some of the pros and cons of each.
- Composable commerce
- How is composable commerce changing commerce experiences?
- What are Package Business Capabilities and how do they differ from microservices?
- What are the benefits of the PBC-first approach for eCommerce?
- How to get started with composable commerce?
- Composable commerce – pros & cons
- When (not) to decide on composable commerce
- From omnichannel to a unified commerce platform
- Examples of unified commerce
- Unified commerce – pros & cons
- When (not) to decide on unified commerce
- Modern Digital Experience Platforms
- Benefits of modular DXPs
- Example of modular DXP
- Composable commerce, unified commerce and DXP in a nutshell
Composable commerce – (R)evolution of eCommerce
Gartner, a well-known analytical and research company specializing in technology management issues, first mentioned the concept of composable commerce in 2020. But this philosophy of creating eCommerce solutions isn’t entirely new. It’s been developing for years, drawing ideas from concepts like headless commerce, microservices, and MACH.
Composable commerce architecture – Headless commerce, microservices, MACH…
- Headless commerce is an architecture in which the front-end is disconnected from the back-end. Both layers communicate with each other via API but operate independently of each other. With this architecture, you can make changes to the front-end without worrying that they will affect the platform’s functionality. Also, the front-end layer is rendered on the client’s side, which improves the performance and User Experience and, if well conducted, the SEO score.
- In the microservices model, a platform or application is made up of many smaller, independent components that each handle a specific task. It allows you to break apart the different parts of the website and make them easier to develop, update, and maintain. It also makes it easier to build independent tech teams working in a specific microservice-oriented niche and focus on making it as great as possible. This brings a lot of advantages to more complex systems such as independence, better management, testability, debugging possibilities and more scalability.
- The MACH Alliance is a community of software vendors and agencies dedicated to creating applications and eCommerce solutions through a decentralized approach following certain principles. MACH stands for Microservices-based, API-first, Cloud-native SaaS and Headless, which serve as the foundation of the alliance mission.
„Composable commerce” is a term that refers to all these concepts and is often used in association with the MACH Alliance and its core values.
How is composable commerce changing commerce experiences?
Composable commerce aims to provide customers with a personalized, seamless experience tailored to their individual needs and preferences. It is achieved by breaking down the entire eCommerce process into small, independent components, or „microservices.” These components can then be assembled, like a Lego set, to create a customized eCommerce solution. In addition, it allows for flexibility and scalability, as the components can be easily added, removed, or modified as needed.
What are Package Business Capabilities and how do they differ from microservices?
Composable commerce emphasizes meeting business needs, which is why the term Packaged Business Capabilities (PBCs) comes into play.
PBCs are collections of functionalities connected via APIs that provide a specific business function. They target specific business tasks, unlike microservices which only sometimes serve a recognizable business capability. They are broader in scope than more granular microservices.
So, what is the difference between microservices and PBCs?
Microservices are a way of constructing applications from small, independent parts. Packaged Business Capabilities are typically composed of multiple microservices that together provide a business value.
What are the benefits of the PBC-first approach (focused on the business value of its modular components) for eCommerce?
Constructing an application with a PBC-first approach may have more advantages than building one from hundreds of tiny microservices.
- Business teams can more easily participate in designing and deploying new experiences when a composable architecture is built with PBCs. By clearly understanding each component’s purpose in the business, both the Business and tech can explain how requests and requirements fit into the application roadmap.
- PBCs make it simpler to provide intuitive tools and dashboards for administrators, merchandisers, service reps, or back-office operations. Building UIs for Catalog, Accounts, Pricing, Promotions, Inventory, Checkout, or Payments is much more practical than constructing UIs for individual microservices, as it saves time and effort.
- Bounded collections of APIs deployed as a unit in PBCs make setting up, maintaining, and changing business logic simpler, faster, and more cost-effective.
It is predicted that 30% of digital commerce organizations will use PBCs to construct their application experiences by 2024.
How to get started with composable commerce?
Gartner recommends that companies move away from a monolithic architecture to a more flexible one by:
- Developing a roadmap to transition from a digital commerce monolith to an incremental, modular approach utilizing packaged business capabilities.
- Creating a composable commerce platform to secure their digital commerce strategy.
- Selecting delivery options that retain business user control of the presentation to maintain business agility and control.
To get the most out of the transition, businesses should prioritize capabilities that directly impact the customer experiences, such as search, personalization, new touchpoints, and mobile UX, as this is where they can find quick wins and gather momentum.
Pros of Composable commerce
- Flexibility: Merchants can quickly and easily assemble various components and services to create a custom digital customer experience.
- Scalability: Because the components are modular, merchants can scale up or down as their customer base changes.
- Cost savings: By using existing services and components, merchants can reduce their development costs and get to market quickly.
- Personalization: By assembling components and services tailored to their customer’s individual needs, merchants can create a more personalized shopping experience.
Cons of Composable commerce
- Complexity: Assembling components and services can be complex and may require a skilled developer.
- Fragmentation: Assembling components and services from multiple sources can lead to fragmentation and inconsistency in the customer experience.
- Security: Assembling components and services from multiple sources can weaken security and increase the risk of data breaches.
When to decide on composable commerce
Composable commerce is a great solution for businesses that require a lot of flexibility and scalability regarding their online store. It’s also great for businesses that need to adjust their eCommerce system quickly as the business grows or changes.
It may be a good solution:
- For merchants who need the ability to scale up or down quickly.
- For merchants who need to personalize their customer experience in various ways using standardized cloud offerings from different vendors.
When not to decide on composable commerce
Composable commerce is not the right choice for every business. For example, it may be too costly and difficult to implement for businesses with limited resources, such as smaller businesses, startups, or those without any experience in eCommerce. Additionally, it may not be the right fit for businesses with a simple product offering or those without the technical knowledge to build and maintain complex systems. It could also be a bit tricky to use for those who are innovators or use eCommerce in a very complex variation.
It may be a bad solution:
- For merchants who are not comfortable with the complexity of assembling components and services from multiple sources.
- For merchants who need a fully integrated commerce platform that has been pre-built and configured.
Digital transformation: from omnichannel to a unified commerce platform
As we live in a digital world, businesses must keep up with the ever-evolving digital landscape to stay competitive. That’s why digital transformation is so important. When leading multiple sales channels, one of the key components of digital transformation is the shift from single to omnichannel commerce.
Omnichannel is a strategy that enables businesses to bridge the gap between online and offline shopping experiences. It involves integrating multiple sales channels, such as website, mobile, brick-and-mortar stores, and social media, to create a harmonious, consistent customer experience. This integration is achieved through both business and technological solutions, such as warehouse management, customer service, and pricing and discount policies. By merging these channels, businesses can provide customers with a seamless, unified shopping experience tailored to their needs.
It means customers can shop on their phones, tablets, and laptops, and the experience will be seamless no matter their device.
Unified commerce is the latest evolution of the omnichannel strategy, intending to establish seamless communication between the business and its customers. This strategy allows companies to manage customer interactions across physical stores, online stores, and mobile applications through a single platform. It facilitates a smooth, effortless transition between channels, allowing customers to switch between them according to their needs.
In comparison to the omnichannel, unified commerce involves the integration of all sales channels into a single platform with centralized information management. This structure allows for improved communication between different tools and greater data exchange. Thus, unified commerce provides a more streamlined approach to enterprise digitization.
Examples of unified commerce:
- The customer places an online order and returns it to a physical store or checks the stock online before visiting a physical store.
- The customer can access a loyalty program that works across all locations and channels.
- The customer can skip the queue, browse the articles, or place an order via the application. After adding products to the cart, the customer can choose a payment method (e.g. credit card or Apple Pay).
The magic behind the scenes
The best solutions help create magical moments for your customers while staying ahead of the market’s needs.
Implementing a unified warehouse policy for both online and offline purchases can significantly enhance the customer experience. It will enable customers to quickly identify which store has the desired product, reserve it in a physical store, or sign up for an alert when the product becomes available again. By accessing this information, customers can make their purchasing decisions more quickly.
Tip: Integrating the sales system with the ERP system that supports warehouse management can provide improved control over sales, simplified product location capabilities in warehouses, and the ability to show customers accurate inventory levels.
Unified discount policy
Implementing a consistent pricing and discount policy across both stationary and online stores is essential to incentivize customers to visit more often and make larger purchases. This single system, designed to adhere to unified principles, helps promote sales growth across all channels while preventing overlapping promotions that could lead to unprofitable sales.
Tip: To ensure consistent pricing and discounts across channels, connect a central system that stores all discounts, pricing, and promotional rules (e.g. Customer Relationship Management). It will enable quick changes to be made in any store without the need to adjust each channel manually.
Using analytics to monitor customer behavior and identify trends is a powerful way to gain insight into the performance of each channel and inform decisions about how to optimize the customer experience. With the ability to track customer behaviors across different channels, businesses can gain insight into how customers interact with their stores and what they prefer.
Tip: Using a unified analytics solution can help businesses get a complete view of customer behavior and identify key areas of improvement. It could include analyzing customer buying trends, understanding how customers use different channels, and providing insights into how to optimize to customer expectations.
Pros of unified commerce
- Improved customer experience: It eliminates the need for customers to switch between channels or accounts when making purchases, resulting in a smoother, more streamlined experience.
- Improved data accuracy: By having all customer data in one place, retailers can get more accurate insights into customer behavior, allowing for better decision-making.
- Increased efficiency: It simplifies back-end processes, streamlining inventory management, order management, and customer service.
- Improved scalability: With one central platform, retailers can scale more easily as their business grows.
Cons of unified commerce
- Difficulty integrating existing systems: It can be difficult to integrate existing systems into a specific platform.
- Increased security risks: As all customer data is stored in one place, it is more vulnerable to security breaches.
- Lack of customization: With the little possibility to make changes, all-in-one platforms may not be able to meet specific business needs.
When to decide on unified commerce
Unified commerce is a great option for retailers who are looking to streamline their operations and provide a consistent customer experience across all channels.
It may be a good solution:
- For merchants that want to provide customers with a seamless experience across all channels.
- For merchants that need to have better visibility and control over inventory, pricing, and customer data.
- For merchants that want to capture customer behavior insights and respond to customer needs quickly.
- For merchants that want to have one solution to manage all channels in a single place.
When not to decide on unified commerce
As it may seem an ideal solution for most businesses, it is important to understand when it is not the right time to invest in a unified commerce approach.
It may be a bad solution:
- For merchants with a limited budget: When budgets are tight, there may be better uses of your resources than investing in this approach.
- For merchants that are not sure of customer needs: Before making a decision, you should clearly understand customer needs and expectations.
- For merchants that don’t have the right team in place: This approach requires a dedicated team of professionals to ensure that all your customer touchpoints are integrated and working together seamlessly.
In between: Modern Digital Experience Platforms (DXPs)
Gartner described DXP as a comprehensive set of technologies that allow organizations to create, manage, deliver, and optimize personalized digital experiences for customers throughout their journey.
DXP enables businesses to create optimized digital experiences tailored to their customers’ needs with scalable, flexible, and efficient websites.
DXPs are a new form of enterprise-level content management system that builds on the existing capabilities of the web and headless CMS systems. These DXPs come in different forms, ranging from comprehensive, all-in-one packages to modular, component-based systems.
From an all-in-one platform…
Monolithic DXP is a closed system that relies on a Single Source of Truth (SSoT) for its built-in modules, such as CMS, eCommerce, marketing automation, DAM (Digital Asset Management), or analytics, to collaborate effectively. The SSoT serves as a centralized data hub for user behavior, product, and entitlement data, thus providing a unified environment for the modules to work in.
Monolithic DXPs are comprehensive toolsets that offer various services from a single provider, making it challenging to integrate with external solutions.
Problem: Imagine that one of your organization’s key elements suddenly ceases to function, such as your eCommerce or the entire database that consists of photos and product info. This monolithic, compact, coherent, and stable structure that previously served as an advantage of the DXP platform might now cause its downfall. If one component stops working and cannot be easily replaced, the succeeding components will likely follow, leading to a „domino effect” scenario.
Solution: Examples of major brands such as Coca-Cola, LEGO, Netflix, or Zalando utilizing the MACH architecture demonstrate that transitioning from a monolithic to a MACH structure is both feasible and essential when considering business growth and scalability. For many eCommerce companies, a headless commerce approach with the MACH approach is the optimal solution for business modernization.
…to a best-of-breed approach
However, modular (or composable) DXPs are Digital Experience Platforms created from a selection of best-of-breed, high-quality components. Following a modular architecture, these DXPs provide more customization than the monolithic option, as multiple tools can be combined with APIs to create unique and powerful digital experiences.
„Choosing an all-in-one solution can be fine for some brands, but it may be as similar to an all-inclusive vacation…It might seem convenient at first, but will it satisfy all your needs in the long run?”
Design a robust digital experience strategy without single vendor lock-in
Modular DXPs allow businesses to customize their digital experience platform to suit their unique needs. In other words, organizations can select the software and features that are most relevant to their particular business objectives. Technically, these systems are connected and integrated through APIs and microservices, allowing for seamless collaboration between different components.
Benefits of modular DXPs:
- Increased flexibility and scalability: Modular DXPs enable businesses to add or remove features as needed, making it easier to scale quickly.
- Lower cost: By breaking down the DXP into smaller, more manageable components, businesses can choose which components they need and pay only for them, resulting in lower overall costs.
- Reduced development time: Modular DXPs are already built, so businesses don’t need to start from scratch, saving time and money.
- Improved security: By breaking down the DXP into smaller components, it’s easier to secure each individual component, improving overall security.
Example of modular DXP – Ibexa
Ibexa is a Digital Experience Platform designed to help organizations create digital experiences that drive customer loyalty and engagement. As a modular DXP, Ibexa offers a range of features and capabilities that can be tailored to meet the needs of a variety of businesses.
It is especially beneficial for businesses that need to roll out new features and capabilities in a timely manner. With Ibexa, businesses can quickly and easily add new components and features to their innovative experiences without starting from scratch.
For example, businesses can use Ibexa to create a website or eCommerce store and then add components such as search, analytics, and content management. It allows businesses to quickly and easily create a digital experience that meets their specific needs and goals.
Effortless content management
Ibexa has a range of content management capabilities that make it easy to create, store, and publish content and manage versions of content over time.
Engaging digital experiences
Ibexa makes it possible for businesses to tailor their digital experiences to meet the needs of their specific customer base with tools for personalization, recommendations, and customer segmentation.
Ibexa provides a range of integrations with other systems, such as customer relationship management (CRM) or enterprise resource planning (ERP). It makes it easy for businesses to connect their digital experiences to the systems they use to manage their business operations.
Ibexa is designed to make it simple for developers to create advanced features with their preferred front-end framework. It provides REST and GraphQL and makes it possible to construct custom endpoints. Additionally, the included GraphQL Playground allows developers to quickly and efficiently use existing data and technology resources to realize their ideas.
With Ibexa, businesses can quickly and easily add components and features to their digital experiences and integrate them with other systems to create a powerful and engaging digital experience.
Ibexa DXP conforms to the MACH architecture by being modular and allowing for the integration of various components and applications. It enables the creation of custom business applications, resulting in the same outcomes as those of the MACH architecture.
In a nutshell
Ultimately, the best approach for your business will depend on your unique needs and budget. A composable commerce solution is an excellent choice for businesses that need to deploy and scale features and capabilities quickly. Unified commerce is ideal for businesses looking to provide an integrated customer experience across multiple channels. And modern digital experience platforms are best for businesses looking to provide a comprehensive customer experience without the limitations of monolithic solutions.
- Uses microservices to break up the eCommerce platform into modular components that are easy to configure and customize.
- Can be scaled up or down as needed, making it a great choice for businesses that need to adjust rapidly to rapidly changing market dynamics.
- Is highly flexible and customizable, allowing businesses to tailor the platform to their specific needs.
Unified Commerce Platform:
- Aims to provide a unified view of customer data across all customer touchpoints.
- Supports omnichannel commerce, allowing customers to shop on any device or channel.
- Is designed to provide an integrated customer experience across all channels.
Modern Digital Experience Platform (DXP):
- Uses APIs to integrate data from multiple sources and create a unified customer experience across multiple channels.
- Is designed to provide a unified view of customer data, enabling businesses to personalize their customer experience.
Deciding on the best approach for an eCommerce project can be a daunting process. Each approach has its own advantages and disadvantages, so it’s important to assess your needs and business requirements before making a decision. If you need help deciding which approach to take, our experienced team is here to help. We can provide guidance and advice in order to ensure that you make the right choice and get the most out of your project.
Contact us today to discuss your business needs, and let us help you find the best solution or even hire our agile team to deliver an eCommerce using one of the above-described ways or a completely different one if required.