The Language of Modern Commerce: A glossary of technology terms to embrace

Every industry has its own language — often one that involves more than a few acronyms — and the technology industry is no exception. As a particularly technical field, the words used in the industry can sound particularly foreign to a layman while also being difficult to explain in simple terms. Before the internet and eCommerce, this really wasn’t an issue, because business leaders didn’t need to have a large technology vocabulary. Today, however, at least when it comes to large, enterprise companies, technology is a key component of any go-to-market strategy. This is especially true for B2Cs, B2Bs and D2Cs, all of which have become increasingly dependent on digital sales to drive business growth.

The fact is, more and more of the decisions business leaders have to make are technology related. As commercetools has established itself as a commerce technology leader, we thought it would be helpful to put together a glossary of the most relevant terms used in the language of modern commerce. We’ll be publishing one blog per month for the rest of the year (maybe longer). Not only will we define three terms in each one, but we’ll also use the word in a sentence and where applicable, provide an analogy to aid in understanding the term.

So, with no further adieu, here is the first installment of our Language of Modern Commerce series.

API is an acronym for Application Programming Interface. An application is any piece of software with a distinct function, while an interface refers to a contract of service between two applications, hence an API is a software interface that facilitates communication between two different computer programs. Basically, for every action a consumer takes while shopping online, there’s an API that delivers the information to the computer system of the business so it can keep track of what the consumer is looking for and what they ultimately purchase.

Example usage:  “We were ahead of the curve in using APIs and headless. commercetools has really helped our development team because they can see how we built our APIs, and can then model their own custom APIs off of what commercetools does. — DAVE PATTISON, CIO AND VICE PRESIDENT OF INFORMATION TECHNOLOGY, MISSION LINEN SUPPLY

Analogy: 

Think of an API as a super fast and efficient waiter. You’re hungry, so you go to a diner, call over the waiter and tell them what you want. The waiter then takes your order to the kitchen. The cook prepares it for you without you giving a second thought to what’s going on in the kitchen. All you care about is that the waiter is going to bring you back exactly what you ordered. 

That’s exactly how APIs work, only instead of going to a physical restaurant, you're using an online service, like a website or app. And instead of telling a human waiter what you want, you're sending a message to an API. Maybe you’re looking for the best burger near you or a real-time weather update; perhaps a sweater for your dog? It doesn’t matter, the API understands what you're asking for, and knows exactly where to go to get it. It takes your request and goes off to fetch the information you asked for. And before you know it, it sends back exactly what you want, in the same way that a waiter brings your food to your table!

Adaptive usage: API-first

Technology companies often use the term “API-first” to describe products and solutions. This is an approach in which developers build each application from the ground up using loosely coupled, replaceable components (interfaces) that enable them to talk to other applications using a system of requests and responses.

The “cloud” is a term used to describe a global network of servers, each with a unique function, that operate as a single ecosystem. Before the cloud, companies owned and maintained their own servers to manage and store their data. Today, modern companies work with multiple software vendors who leverage a server network  — such as the Google Cloud Platform (GCP), Amazon Web Services (AWS) and Microsoft Azure — to provide services to a plethora of customers.

Example usage: “As a scalable cloud solution, commercetools takes care of all the background commerce processes, without us having to worry about updates and maintenance. — RONAN TIGHE, CHIEF PRODUCT OFFICER, MOONPIG

Analogy:

Imagine you’re having a dinner party. You can either cook for everyone or have it catered. Either way, the meal will be delicious. But if you cook, you have to do all the prep work, as well as make all the dishes, serve and clean up. If you have it catered, you can focus on your guests and probably enjoy the party a bit more. Plus, catering companies always bring extra in case unexpected guests show up. Choosing the catering company is like choosing to run your technology in the cloud — instead of you handling all management and maintenance of your data, a third-party provider does it for you, so you can put your energy and resources into delivering exceptional customer experiences.

Adaptive usage: Cloud-native 

Technology companies use the term cloud-native to describe the strategy employed to deliver the commerce functionality they offer. When a company describes its products as cloud-native, they mean the software was built to host, store and scale in a private, public or hybrid cloud. This eliminates dependencies on servers and enables them to deliver the services brands need more quickly and economically.

Coined by Gartner® in 2020, composable commerce is a development approach that enables businesses to “leverage packaged business capabilities (PBCs) to move toward future-proof commerce.” The philosophy behind composable commerce is that by providing a set of APIs that deliver a single business function such as search, cart or checkout, PBCs act as building blocks for businesses to use to "compose" a modern commerce solution that fits their exact needs and provides flexibility as those needs change.

To embrace a composable commerce approach, businesses must have a technology infrastructure that enables PBCs to be integrated easily and without risk. This is accomplished through MACH™ architecture, which establishes the flexible, agnostic development environment needed. Thus, the two approaches — composable commerce and MACH architecture — are intrinsically connected.

Example usage: “As we dove deep into what the business benefits would be if we went the route of composable commerce, we knew that we would be able to deliver a much more differentiated commerce experience that really stood out.” — KYLE BARZ, GLOBAL DIRECT TO CONSUMER PRODUCT OWNER, MARS WRIGLEY

Analogy:

Building your tech stack using the composable commerce approach is like ordering a custom pizza instead of one of the ones the pizzeria has on the menu. With the pizza, you get to choose the crust and toppings you want based on your personal preferences. It’s the same thing with composable commerce. You first choose the core components and then add the capabilities and features you want. Since all vendors that embrace composable commerce provide MACH-based products, they’re compatible with one another and fit together easily. In the same way that you end up with a custom pizza that’s perfect for your taste buds, you ultimately get a composable solution that's perfect for your business.

Adaptive usage: 

Composable commerce is often referred to as composable architecture or the composable approach. Both of these terms mean the same thing as composable commerce. You’ll also find it compared to the experience of playing with Lego® bricks. As Casper Rasmussen, Group SVP Technology at Valtech, recently explained to a news reporter, “Each brick represents a digital ability that is core to its digital business, which the company can put together and re-configure in different ways. The company can thus select the bricks they want to use to build exactly the type of digital solution needed for a particular channel and purpose.”

To learn more about the benefits APIs, cloud and composable commerce offer enterprise businesses today, download Buy AND Build: A Blueprint for a Composable Commerce World.