There is no denying that composable commerce is officially a buzzword in the world of commerce. Gartner® touts it as the future of commerce, kicking off their Hype Cycle™ for Digital Commerce 2023 report with the statement, “Composability is a strong theme this year, not only for the core digital commerce platform, but also ecosystem applications, such as DXP and product configurators.” It was also a hot topic at NRF 2024 and is sure to be on everyone’s lips at Shoptalk 2024. The thing is, most business leaders are still trying to grasp the concept and understand the benefits.
To help leaders understand all things composable, we released the white paper Why composable commerce will change the way you run your business. This guide spells out in understandable terms why composable commerce matters now, what it offers businesses and how commercetools Composable Commerce products are able to deliver better outcomes than solutions offered by other vendors. We also teamed up with Google Cloud to bring together a group of experts to share insights on the positive outcomes composable commerce brings to businesses across all industry sectors. Here, we offer a recap of the enlightening conversation.
Marlies Isabella Riepl, Senior Global Alliances Marketing Manager at commercetools, moderated How Composable Commerce Translates into Business Success, a panel discussion featuring Tina Lykke, composable commerce expert and former IT Director of The Sinful Group, Maria Emmanuelli, ISV Partner Engineer, Retail, at Google Cloud and Nina Jonker-Völker, Business Owner, GTM commercetools Frontend at commercetools.
Marlies kicked off the conversation by offering her theory for why composable commerce has become such an industry buzzword — ”It’s simply because it is able to solve the main challenges businesses are facing today.”
She continued, providing more specific details. “One, they want to be more flexible to offer the best possible customer experiences and capabilities. Two, they want to be able to scale more efficiently and reduce the risk of downtimes due to high traffic. And, of course, three, they want to do all of this whilst reducing the total cost of ownership without spending the majority of their IT budgets on maintaining their tech stack. Composable commerce offers them just that: flexible components, a cloud-native solution and a tech-agnostic approach to enable rapid and cost-efficient roll-ups.”
Tina, who has worked on composable commerce implementation projects with both the Salling Group and the Sinful Group, shared that while the two projects were vastly different, flexibility was the key driver for both organizations. For Salling, a 100-year-old Danish retail company, it was all about tech flexibility, as the company had a labyrinth of disparate systems created from decades of building up IT stacks.
For Sinful, a 13- year-old company, it was about having the flexibility to grow. “When you're acquired by an investment fund, all of a sudden you need to grow rapidly. That can be all sorts of growth — merging with external companies or just scaling into new markets — and there wasn’t really a plan in place. So, that was really the reason why we [Sinful Group] wanted to go composable. To keep our options open, so to speak.”
Maria said that regardless of industry or company size, she has discovered that many of the challenges businesses face are similar, pointing out that this is why commercetools has acquired such a diverse customer base. “It encompasses B2C, D2C and B2B, across all sorts of industries from consumer goods all the way through to telecom companies, automotive, steel and manufacturing.”
Composable commerce is absolutely an industry agnostic approach. It's much more about the underlying topics and challenges that organizations want to address and achievements that they want to realize than it is about a single industry or vertical or certain use case.
BUSINESS OWNER GTM, COMMERCETOOLS FRONTEND, COMMERCETOOLS
Tina agreed that the capabilities of composable commerce benefit all types of business and said the differences quickly become evident. “Before composable was an option, you needed to set aside one to two years every time you replatformed. During that period of time, you're going to be able to deliver very little incremental business value to your existing stack, and nobody can really afford to keep doing that.
The way eCommerce is evolving, and becoming more and more the preferred way for people to shop, you can't stand still on your stack for that many years.
BUSINESS OWNER GTM, COMMERCETOOLS FRONTEND, COMMERCETOOLS
And, it’s the flexibility to incrementally build a new, better tech stack, making changes that deliver value, while maintaining ongoing operations that Tina believes is the number one reason to migrate to composable commerce, “The promise of composable is that you'll really be able to manage the lifecycle of the individual components rather than having to do everything at once.”
She pointed to access to competency as a second selling point, explaining that previously when you chose a solution, you had to have developers that were trained in that specific solution. The competency pool was limited, which often made finding and hiring talent difficult. Since composable is tech-agnostic, this challenge has been eliminated and you no longer have to struggle with the hiring and maintaining of specialized talent.
The final factor that sold Tina on composable is its ability to infinitely and automatically scale to meet both planned and unplanned events. Tina said that “the old way” required that companies “maintain an unnaturally high baseline for performance and scalability” just to be able to handle peak season.
The promise and the benefit of working with cloud-native systems and components is that someone takes care of all that for you, so you can focus on creating the value for your customer.
COMPOSABLE COMMERCE EXPERT, FORMER DIRECTOR OF IT, THE SINFUL GROUP
Maria reiterated that cloud-native commerce solutions guarantee constant availability, eliminating the necessity to continually monitor traffic, allocate and reallocate resources, and have to pay for capacity even when you don’t need it. “They let you give that responsibility to, for example, Google Cloud, enabling you to scale on demand, “ pointing out that today, you have to always be ready to update to the speed your customers demand, and only cloud-native solutions let you do that.
Maria also stressed that cloud-native solutions have the power to enable organizations to better leverage their data strategy, which has become critically important in today’s digital environment.
Before adopting composable commerce, we see that many eCommerce experiences lack the intelligence to provide super-relevant shopping experiences. Legacy technology may not be able to unlock all the value that's needed from first-party data.
ISV PARTNER ENGINEER, RETAIL, GOOGLE CLOUD
Marlies brought up that while cost is always a major factor when a company is considering migrating to a composable solution, both Tina and Maria believe that the benefits outweigh the costs, and the long-term savings make it a worthwhile investment. Unfortunately, as Nina explained, many companies make technology decisions based on the superficial costs that are often discussed as part of the technology sales process.
The total cost of ownership goes far beyond that. It's a concept that reaches across three or five years, and one that also takes into account the growth that you can actually achieve with a certain technology.
BUSINESS OWNER GTM, COMMERCETOOLS FRONTEND, COMMERCETOOLS
Nina said that while there are costs associated with implementation, companies need to think about what they want to achieve and where they want to go in the future. “As you want to grow and create more customer experience, different customer experiences and really start to work to stand out from the crowd and from your competition, things become even more complex. That's when total cost of ownership becomes even more important because how quickly, how fast, how agile and how easily you can make changes, becomes extremely important.”
According to Tina, this is absolutely true. She said that one of the most significant outcomes of investing in composable is the ability to increase release frequencies. With a monolithic stack, each release takes a long time; with composable you don’t have to test everything from scratch and developers can parallelize developments much more. Another tangible outcome is that the freeze periods before peak seasons can be eliminated. “Of course, you still have to be careful of what changes you do in peak season but you’re no longer locked in.”
The cloud-native aspect of composable commerce plays into both of these outcomes. Maria pointed out that businesses should recognize that when they choose Google Cloud, they’re getting the same reliable, scalable architecture that YouTube, Google Search and Google Maps use. “Faster time to implement an application and faster time to innovate — Google Cloud lets you do that. It lets you build and automate applications and scale them faster, leveraging open source technology and multi-cloud and hybrid approaches to be able to quickly deploy your applications while at the same time avoiding vendor lock-in and offering a flexible environment to run that application anywhere.”
A big part of composable commerce is to be able to pick and choose your solutions and adapt them to the customer's needs. And with solutions like commercetools and Google Cloud, you can easily integrate all of this power to get those outcomes.
ISV PARTNER ENGINEER, RETAIL, GOOGLE CLOUD
These benefits are just the tipping point of how composable commerce translates into business success. The group touched on many more advantages, including the ability to better leverage data to enable more personalized experiences, add new markets quickly without risk, deliver true omnichannel experiences and embrace the future possibilities of commerce.
As more and more organizations actually adopt the composable approach, the more possibilities they have to improve their customer experiences, which in turn will spoil customers, increasing pressure on other organizations to step up their game and become more customer-centric, more driven towards thinking what their personalized customer experience needs to look like.
BUSINESS OWNER GTM, COMMERCETOOLS FRONTEND, COMMERCETOOLS
To listen to the full webinar and gain all the insights from our panel of experts, watch the on-demand video of How Composable Commerce Translates into Business Success.
Anita J. Temple is the Corporate Journalist at commercetools. She was a fashion editor at Women’s Wear Daily (WWD) and W Magazine before launching a career as a freelance writer and creative producer. She has written content and worked on a wide range of marketing projects for companies including Dreamworks, Walmart, Coca-Cola, Verizon, and Adidas.