Why composable commerce should top every application leader’s agenda
The age of static, monolithic digital commerce platforms has passed. To succeed in today’s fast-paced, customer-centric landscape, organizations need to take an approach that allows them to be more flexible and adaptive, outpacing competitors and delivering a multi-channel experience that today’s customer has come to expect. Organizations need to be able to deploy new features rapidly in order to engage and sustain customer interest, and can no longer afford to carry the “technical debt” of legacy systems that require near-constant re-platforming. It’s time for change.
If organizations want to stay competitive and future-proof their operations, now is the time for application leaders to start preparing for a “composable” approach to development. By 2023, Gartner® says, organizations that have developed a composable approach to digital commerce will be outpacing their competitors by 80% when it comes to the deployment of new features and services. Those held back by legacy platforms, unable to meet the constantly evolving expectations of their target market, will inevitably fall into obsolescence.
In this article, we’ll discuss composable commerce in detail, including the key challenges organizations might face and what practical steps they can take today in order to evolve their tech stack and prepare for a composable future.
From platform-centric to customer-centric
The move to composable commerce is part of a wider shift in thinking, from an inward-looking, platform-centric view to one that’s outward-looking and puts the customer experience above all else. Instead of innovating internally and then going to market, today’s organizations need the flexibility to innovate in real-time alongside the market - and that’s what a modular packaged business capabilities (PBC) approach allows in the form of “composable commerce”.
When considering digital commerce and other associated digital experiences, it can be useful to think along three dimensions: the customer-facing journey, the capabilities required to deliver that customer-facing journey, and the technology stack that supports those capabilities. In a monolithic platform this is all tightly coupled, usually with extensions that can be native or integrated, external applications.
A monolithic platform is very limited in terms of what it can deliver, so the customer experience layer cannot be easily influenced without making extensive alterations from the ground up, resulting in added expense and downtime. In essence, for a business to keep pace with digital commerce trends and customer expectations, it would have to undergo expensive re-platforming time and time again.
With a composable approach, however, these dimensions are more loosely coupled. Instead of capability integration happening within a static, monolithic application, it can happen nearer the customer experience layer, using a network of modular, API-first applications that can be independently added, changed, or removed.
This takes away the “technology debt”, allowing organizations to treat their digital commerce operation as an operational expense rather than capital expenditure, making them far more resilient, adaptable and customer-focused.
Within the next two years, 10% of digital commerce organizations will use packaged business capabilities to construct their application experiences, according to Gartner®. But how does that journey begin, and what are the potential roadblocks?
Breaking the monolith
One of the growing realities for digitally mature businesses is that digital commerce can no longer be sustained as a monolithic silo of engagement. It’s not only a question of being able to deliver consistency across channels but of unifying the entire end-to-end customer journey, from initial engagement to post-sale customer support. The simplicity of the “e-commerce” go-to-market is being challenged via requirements that go beyond the traditional core buying journey. Monolithic platforms may not easily integrate with these wider journeys, and productized connectors to ecosystem vendors are usually required. Such journeys will need to include:
- The integration of content and social channels to drive engagement and conversion.
- For retailers - store integration and returns management.
- The ability to support customer inquiries and post-purchase services as a connected experience.
- Support for emerging hybrid digital-physical goods that require retail and subscription models.
- The need to have a unified brand experience throughout the customer life cycle.
For B2B businesses, the ability to manage ongoing relationships with customers via customer portals is becoming increasingly important, as is the need for supply chain transparency and flexible integration with partners to increase revenue channels. All of this requires navigation away from the monolith, and that starts with the technology stack.
An organization’s tech stack refers to the layers of technology it uses to deliver on application capabilities, from the data layer right through to business logic, presentation and orchestration. One example of how the technology stack has evolved is to look at how organizations are now delivering on the digital commerce experience.
In other words, to orchestrate and unify these wider customer journeys, organizations are now taking control of the presentation layer, making it the point of app integration instead of the commerce platform.
Future-proofing a digital commerce strategy with composable
If an organization already has a high level of digital maturity, now is the perfect time to start exploring composable commerce. Packaged business capabilities (PBC) are the building blocks of future composable business commerce applications, and they’re the perfect response to the fading monolith. The Gartner® report says that by 2023, it’s estimated that 50% of new commerce capabilities will be incorporated as API-centric SaaS services, as businesses seek to take control of how their services are presented and orchestrated, week-by-week, as opposed to year-by-year.
PBCs are effective because they are independently deployable, containing all of the business data, logic and processes they need in order to perform a given function. These PBCs interact with other applications via APIs and event channels which we believe allows organizations to alter the customer experience and underlying functionality without risking downtime, disruption or ever needing to re-platform again.
The appropriate granularity of these modules (they are not always “micro”) is defined by business needs, and must balance development flexibility/agility with governance complexity and costs.But one thing is clear, embracing a composable commerce approach that leverages PBCs will ensure that an organization has the flexibility and robustness to not only withstand change but actively thrive in it.
The roadmap to composable commerce
A significant number of organizations may have already taken steps toward composable by leveraging a microservice architecture or enlisting a third party to provide best-practice composable capabilities. However, few organizations (or the vendors they’ve partnered with) are yet to split their products into smaller PBC-like modules such as “product catalog”, “shopping cart”, “promotion engine” or “product recommendation”. In order to truly futureproof themselves and leverage composable architecture to its fullest potential, organizations will need to start selecting vendors that are embracing this PBC future.
“In the future, we see the composable approach becoming the norm across enterprise applications. It just happens that, in the digital domain, especially around digital commerce, that future is already partially here.” - Gartner®
It is already possible to buy or rent capabilities from a single larger vendor, but we believe the real benefit of composable architecture lies in the ability to select best-of-breed technologies from a tapestry of vendors with unique specializations. For instance, an organization could use different vendors for the following services:
- Core commerce (shopping cart, promotions, check-out)
- Content and product management
- Search functionality with detailed filters
- A reviews and rating system
- Customer identity management (access and identification)
- Customer data platform (data/personalization analytics)
- Help desk services
- Chatbots for real-time or automated “self-service”
These PBCs could be vendor-managed SaaS applications, in a public or private cloud - or even on-premise. The benefits remain.
“Using the composable application approach, digital experiences are assembled as required, depending on the customer and touchpoint requirements, and delivery of an “e-commerce site” may be just one of these experience types. The focus shifts to a truly customer-centric view, supporting customer journeys as required, and a single PBC may support more than one.” - Gartner®
Today, the ability to compose brand-new applications from the ground up only exists within the most digitally advanced organizations. Rather than trying to mimic these early adopters using in-house resources, it makes sense for organizations to leverage PBCs in order to tap into the value that has already been created, curating their own unique customer-centric experience that can scale and evolve with the needs of their customers.
Read the full Gartner® Composable Commerce Must Be Adopted for the Future of Applications report to learn more.
Gartner, Composable Commerce Must Be Adopted for the Future of Applications, Mike Lowndes, Sandy Shen, Refreshed 25 August 2021, Published 18 June 2020
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.