What You’ll Gain When Adopting a Composable Commerce Model

Whether in B2B or B2C, it can feel like commerce has never been more challenging. Customers have more choice than ever, prices are highly competitive, and customer experience has become a key battleground. Adopting a composable commerce model could give you the edge to succeed.

But for any manufacturer or retailer embarking on a new commerce journey, with the launch of their own marketplace for example, there is hope that they can flourish and succeed if they go about it in the right way.

Amazon shows signs of commerce weakness that it hasn’t done in decades, so there is a true window of opportunity. To make the most of that opportunity, organisations must be agile, and their commerce platform must be rich in the kind of features that allow for high degrees of personalisation. The answer to achieving this lies with composable commerce.

Amazon on the Wane?

Let’s not pretend that Amazon is down on its luck. But the company’s most recent financial figures (April 2022) suggest a commerce vulnerability that hasn’t been there for years. Amazon’s Q1 2022 results revealed its slowest-ever revenue growth in the first quarter and its first loss since 2015. Most of the areas of modest success can be attributed to AWS, Prime, and Amazon advertising, the latter of which Amazon published financial figures for the first time.

When you consider just the e-commerce part of Amazon, there is even more cause for encouragement. The latest results saw a drop in online sales, but this is merely continuing a trend that started in Q4 2021. Then, North America saw growth of just 9.3% from Q4 2020 to Q4 2021, while internationally, there was a decrease of 0.5%.

When changing B2B and B2C shopping habits are also factored in, it is clear that a real opportunity is emerging. Customer experience is everything – deliver that, and there are no limits to commerce success. Progressive organisations have been utilising composable commerce to differentiate on experience, attracted by its modular, modern and flexible approach to commerce.

Commerce model

What is Composable Commerce?

The term ‘composable commerce’ was originally coined by Gartner in 2020. The idea behind it is that businesses must go down a modular route to commerce. This involves selecting the best-of-breed solutions to ‘compose’ a highly customised tech stack.

In simple terms, composable commerce is all about giving businesses or commerce teams the freedom to select vendors that offer the commerce solutions required for their specific business requirements.

That sounds sensible, but many organisations are still stuck with monolithic ERP environments, which are inflexible and unsuited to modern commerce. While the pace of digital transformation has increased sharply since the pandemic, it is still not fast enough for many organisations.

Composable commerce and legacy systems are like comparing Lego to a toy car. With the latter, you can play with it as delivered, but with Lego, you can build your own toy if you understand how to connect the bricks and make what you want. If you cannot connect the bricks or don’t know what to build, then Lego will not help you.

Reaping the Benefits

The importance of personalisation to commerce success has been well-documented, but it’s especially pertinent now. For retailers to compete against Amazon or B2B firms to launch their own commerce marketplaces, personalisation is essential. Composable commerce delivers this and other benefits, including:

Flexibility – As customers demand more functionalities on commerce platforms or across various touchpoints, businesses need to be agile in responding to the ever-changing business environment. Composable commerce creates the room for this flexibility that an out-of-the-box solution will not deliver.

New Features – Part of personalisation includes the rolling out of new features, interacting with customers via their preferred medium and giving out bespoke prices or offers unique to the customer. This cannot be done with an old and antiquated system and is especially relevant for B2B, where request to quotes processes are common and even expected by customers who want a bespoke price based on many variable factors.

Open Standards – Adopting a composable approach means that applications should be seamlessly integrable and built on open standards. Customers want unique experiences that speak to their individual preferences, and the only way to deliver them is by being flexible enough to adopt the modern technologies that drive innovation.

Cost Efficiency and Control – Picking and choosing what capabilities and vendors are most relevant for a business could help cut down unnecessary costs. Furthermore, vendor lock-in can easily be avoided when there is the freedom to replace components as needed.

The future of commerce

This all suggests that the future of commerce is based around composability. Personalisation is crucial to B2B and B2C customer experiences, and composable commerce is the most effective way to achieve that. Its best-of-breed principle is far more relevant than off-the-shelf bundles, which compel businesses to use redundant or outdated technology.

With Amazon’s current vulnerability meaning retailers have an opportunity to claw back market share, and with B2B firms more focused on commerce than previously, composable commerce has never been more in demand – it is set to be one of the defining commerce trends of the next decade.

Alexander Graf is Co-Founder & Co-CEO of Berlin-based marketplace experts Spryker and author of the bestselling book, The E-Commerce Book.