The time for retailers to surf the next wave of digital transformation is now

The time for retailers to surf the next wave of digital transformation is now

Manuela Tchoe
Manuela Tchoe
Senior Content Writer, commercetools
Published 21 July 2022
Estimated reading time minutes

More than ever, retailers are eager to experiment with new touchpoints and tools to customize digital experiences, including augmented and virtual reality (AR/VR), social commerce and personalization. Yet, unlocking these opportunities lies in a new wave of digital transformation toward composable commerce.

The time for retailers to surf the next wave of digital transformation is now

It’s never been harder to be a retailer. Declining margins, increased competition, demanding consumers, and, at the forefront of it all, an unstoppable shift to digital accelerated by the COVID-19 pandemic. eMarketer shows that eCommerce sales will reach 24.5% of retail sales worldwide in 2025, a stunning 10.7% growth since 2019.  

Now, online shopping has matured from desktop-based eCommerce toward omnichannel. According to a study published by HBR, 73% of consumers use multiple digital channels along their shopping journey beyond the brick-and-mortar store and webshop, including mobile apps, social media and augmented/virtual reality. Industries like automotive are unleashing specific touchpoints, such as in-car commerce. 

As the B2C and B2B commerce repertoire evolves, encompassing multiple touchpoints, commerce on mobile devices, personalization and search tools, and more, retailers are rushing  to plug emerging technologies to shape customer experiences and loyalty, reduce cart abandonment and, crucially, increase revenue. 

Capturing digital omnichannel opportunities in this fast-moving world is critical for long-term success. The blueprint to achieve this lies in composable commerce.

Compose commerce your way

As the name suggests, composable commerce enables retailers to build customized commerce experiences, like LEGO bricks that can provide unique combinations.

Composable business means creating an organization made from interchangeable building blocks. The modular setup enables a business to rearrange and reorient as needed depending on external (or internal) factors like a shift in customer values or sudden change in supply chain or materials.
Gartner Keynote: The Future of Business Is Composable

Because omnichannel commerce is here to stay, retailers must become more adaptable to market changes and stay on top of customers’ demands. That means relying on rigid all-in-one eCommerce suites presents challenges for retailers, as standardized platforms such as Adobe Magento, SAP Hybris and Salesforce cannot keep up with market and customer needs due to their inherent inflexible infrastructure. 

The paradigm has shifted. Composable commerce is the right strategy for retailers for the second wave of digital transformation, fulfilling core requirements for long-term growth: 

  • Speed: Be adaptable and agile to fast-moving market changes and customer needs. 

  • Best-of-breed: Compose commerce with modular functions that best fit your business needs. It’s about the freedom of using the features you need. 

  • Flexibility: Perform changes and updates easily, adapt frontends without affecting the commerce engine backend, and realize ideas to hook the customer to your brand. 

  • Scalability: Handle traffic peaks on special occasions, such as Black Friday, Super Bowl and other seasonal campaigns. 

  • Customizable and iteration-ready: Create features and add touchpoints on the fly, experiment with campaigns and new frontends and perform A/B tests without a hitch. 

According to Gartner, organizations will deploy new features 80% faster than their competitors with composable commerce. For retail, this translates into a future-proof architecture to stay ahead of consumers’ demands. 

How John Lewis & Partners gained the flexibility to customize digital customer journeys with composable commerce

John Lewis & Partners is a brand of high-end department stores located in Great Britain, Ireland and Australia. The company offers a range of consumer products ranging from home & garden to apparel and furniture and operates to GBP 4 billion yearly revenue. 

Since its early eCommerce days, John Lewis has relied on the legacy platform Oracle ATG. With new consumer demands piling up and the legacy solution accumulating technical debt, the company decided to re-platform away from Oracle ATG to pursue tailored customer experiences via composable commerce. 

John Lewis has partnered with commercetools for their new checkout capability while achieving complete freedom to conduct omnichannel commerce for the first time, designing customized journeys for in-store, webshop, mobile app and any other touchpoint. 

The company opted for a long-term phased migration with a clear goal of minimizing disruptions. In a nutshell, John Lewis’ success based on commercetools Composable Commerce shows that bold actions toward digital transformation pay off.

5 benefits for retailers to transform toward composable commerce

Modernizing your commerce infrastructure with composable commerce brings a range of benefits for retailers. 

#1 - Create unique omnichannel customer experiences

Omnichannel commerce has become mainstream and, more than ever, retailers need to implement cohesive and personalized consumer-brand interactions across channels and devices. Because of its modular nature, composable commerce enables retailers to plug and play touchpoints at any time while creating connections for seamless experiences, no matter where the customer starts the shopping journey. 

Creating unique experiences means increased conversion repeat purchases in the long run, a benefit experienced by the fashion retailer 66°North. Because the company has modernized its commerce system with composable, it unlocked more design options for its frontends as the foundation for unique experiences that resonated with customers. The result: an increase in repeat purchase rate by 75%

#2 - Innovate faster

Gartner revealed that fostering business innovation is the primary catalyst for 65% of organizations investing in digital commerce. Indeed, it’s through composability that retailers can get innovations to production faster because they are implemented without dependencies in a modular, agile way. 

For example, by implementing composable commerce, the fashion brand Express has been able to add five significant capabilities to its digital experience in only three months. 

#3 - Reduce total cost of ownership 

Instead of significant upfront costs associated with all-in-one suites, retailers can select third-party vendors that best fit the business needs, both technological and financial. With composable commerce, retailers can subscribe to a single needed resource — like John Lewis and Checkout powered by commercetools — instead of paying for an entire platform with an unnecessary feature-set.

We have lowered our operations costs, reduced our time-to-market, made it easier to recruit talented employees and vastly improved our mobile experience. We received an award for the best German connected retail solution and...we’re just getting started.
Tina Likke Kristensen

Senior Manager, Non-Food Commerce, Salling Group

Over time, retailers can reduce the total cost of ownership (TCO), as expenses related to extensions, feature development, deployments, etc., are optimized. 

#4 - Increase sales and revenue 

Using composable commerce enables retailers to automate sales journeys and engage customers the way they want. This translates into increased revenue, as experienced by the Denmark-based manufacturer of high-end consumer electronics, Bang & Olufsen.  

The company aimed to strengthen D2C sales online and decided to take commerce to the next level with composable. They integrated all sales channels into a single omnichannel strategy, leading to a 60% increase in conversion rate across 28 webstores. 

#5 - Make complex commerce simple 

Commerce is complex, especially when retailers have multiple brands and are present in several markets. These lead to a high amount of data, frontends, touchpoints and vast catalogs. Handling this complexity is only possible with modularity, best-of-breed and maximum flexibility powered by composable commerce.  

For example, the conglomerate of brands Berlin Brands Group required a solution to handle the complexity of creating a unique look and feel for 10+ web shops across the European Union. Composable commerce helped them fulfill complex requirements and fully customize experiences.

Berlin Brands Group has multiple brands under one roof and sells a large catalog of products in several European countries. Choosing a best-of-breed composable architecture with a powerful API platform underneath from commercetools was the only answer. Now they can tailor each of their brands' web presences to be distinct and add multiple currencies and languages to their online stores seamlessly.
Hauke Rahm

VP Customer Success, commercetools

In the evolution of eCommerce — from desktop and mobile to omnichannel — retailers that previously relied on all-in-one suites are switching to composable commerce and don’t look back. This future-proof transformation will establish the foundation for captivating customer experiences, innovation and revenue growth.

Manuela Tchoe
Manuela Tchoe
Senior Content Writer, commercetools

Manuela Marques Tchoe is a Content Writer at commercetools. She was a Content and Product Marketing Director at conversational commerce provider tyntec. She has written content in partnership with Facebook, Rakuten Viber and other social media platforms.

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