The shift to composable commerce
Exploring the Benefits and Journey
Milliseconds make millions
A 2020 study by Deloitte Digital found that even a small improvement to page load speed had positive effects on business results. According to the study, a mere 0.1s change in load time influenced every step of the funnel and user journey, ultimately increasing conversion rates and driving better business outcomes.
Out of all verticals studied, luxury brand consumers are the most sensitive to speed improvements. Better speed correlates with longer sessions, and an increased likelihood to convert. In fact, there was a staggering 40.1% increase in users moving from product detail to add to basket.
For retail consumers, the same 0.1s change showed page views increase by 7%, conversions by 8%, with consumers ending up spending almost 10% more.
Key takeaway? Any brand looking to meet consumer expectations and to stay relevant, should make site speed a priority.
It allows developers to choose best-of-breed, performant, cloud-native components and services, ‘composing’ them into a solution to meet business needs with unparalleled velocity. As most companies are looking to speed up digital development, this paradigm has become popular.
The composable approach is based on so-called MACH principles, an acronym for Microservices, API-first, Cloud-native, and Headless. The modular design enables businesses to keep up with emerging technologies, without risking the need of multiple replatforming projects.
In this blog post, we will highlight some of the benefits of this approach, and look into the journey of replatforming from monolithic to composable commerce.
Business benefits
How to boost revenue and margins while lowering TCO?
Let's start by assessing the impact to business.
Increased revenue: Milliseconds make millions. Faster page loads not only drive more organic traffic through search engine optimized, accessible, on-brand storefronts but also increase conversion rates throughout the funnel and customer journey. Each business is of course unique, however modeling the funnel metrics for as-is state and what could be, is a fairly straightforward exercise.
Greater margins and loyalty: As concluded by our sister agencies NoA Consulting and NoA Ignite, 95% of online retailers fail to emotionally connect with their customers and enjoy price premium. By understanding the factors influencing consumers willingness to pay, and turning that understanding into experiences that evoke positive emotions, brands are well-poised to enjoy price premium with a greater strong sense of loyalty.
Business agility: According to a recent report by the MACH Alliance, there’s been a steady growth in companies adopting the MACH principles, and this growth is expected to accelerate in 2023 and beyond. Companies that have adopted the principles within the past 12 months see themselves as ahead of competitors, being able to react quickly to business requirements, market changes and seize new opportunities. Brands that do not prioritize looking into the potential of a composable architecture face the risk of falling behind.
Lower total cost of ownership: By utilizing best-of-breed components, companies can expect drastically lower costs associated with running and maintaining their e-commerce platforms.
Some vendors report a whopping 75% decrease in total cost of ownership after replatforming to a composable stack.
By adhering to the core MACH principles, e-commerce platforms become easier to scale to handle peak campaign loads, and to new markets. With a composable stack, Black Fridays and Cyber Mondays will become like any other day for your brand.
Planned and executed right, composable approach also allows for the replacement of individual components later when needed, mitigating the risk of a vendor or technology lock-in – or both.
Sustainability: MACH principles can also help create and run more sustainable digital solutions. Through flexible, modular, and scalable architectures, resource usage is more efficient, waste is reduced, and ongoing innovation can be better supported. Again, this allows businesses to adapt quickly to market changes, push out new features and optimize their platforms faster, resulting in reduced environmental impact and more sustainable growth.
Creative benefits
Looking for more flexible tooling and omnichannel consistency?
Ok, how about creatives and creators then? Here's how composable will help you.
Greater flexibility: With full control of the presentation layer, designers can craft visually appealing, engaging and accessible customer journeys. Without the need to be bound to a storefront theme or a template, creatives are free to design unique, on-brand experiences that evoke positive emotions – and help drive higher price premiums.
Recently, our sister agency NoA Ignite collaborated with CAKE, the Swedish maker of premium lightweight, electric motorcycles, to deliver an ultimate destination for aspiring customers and brand fans where they could dive into the full experience.
At DK&A, we’ve applied these principles in our collaboration with Reima, the number one kidswear brand from Finland, to enable frictionless experiences across Reima.com, the Reima app – the homebase for loyalty – as well as physical stores.
Omnichannel capabilities: By being touch-point agnostic by default, a composable approach allows brands to deliver frictionless, consistent experiences across multiple touchpoints (online, mobile, in-store, social), further driving customer experience and loyalty.
Enhanced collaboration: The composable approach fosters collaboration between creatives and developers, streamlining their workflows. Creatives can focus on creating compelling experiences, while developers can concentrate on shipping new valuable features and look into performance optimizations.
Improved tooling: Composable content platforms like Contentful and Sanity offer user-friendly, modular tools for managing content, digital assets and products across multiple touchpoints, whereas composable commerce engines (e.g. Shopify Plus, Commerce Layer, commercetools and Centra) focus on smooth transactions, essentially allowing any digital surface to be shoppable. Composed together – complemented with e.g. search, personalization, promotion engine, – these allow smooth collaboration on content, products and user context, powering dynamic, relevant, online experiences.
Seamless personalization: Adopting a composable approach allows brands to easily integrate powerful personalization engines such as Uniform into their e-commerce platform. This enables creatives to craft tailored, contextually relevant experiences for each user, which boosts customer engagement and satisfaction, fostering long-term relationships.
Developer benefits
How can composable help boost productivity and velocity?
And what's in it for the developers?
Easier customization: Driven by technical innovation, most API-first products are made for developers by developers. Whenever a feature or custom logic is not provided out-of-the-box, developers can use webhooks to connect custom microservices, activate workflows, integrate to external services (e.g.identity providers, custom payment gateways, promotional engines, or notification services).
Enhanced productivity: As the composable approach allows developers to work with their preferred frameworks, tools and services, they can focus on engineering highly-performant solutions with smaller maintenance footprint. With emphasis on new feature development, it’s easier to demonstrate value and contribution to key business goals.
Improved velocity: Working with best-of-need components, design systems, modern application infrastructures such as Vercel, static site generation and smart pipeline management, development teams can work with unprecedented speed, enabling faster cadence and value delivery.
The composable commerce journey
The transition to composable commerce should be considered a strategic initiative to enable business agility, more sustainable growth, a seamless customer experience and driving loyalty.
The journey can be divided into four phases:
Planning for replatforming
Replatforming
After replatforming
Ensuring future growth
Each phase comes with specific focus and activities to be carried out. Let’s take a look at each at a time, along with our recommendations.
Planning for replatforming
Assess maturity
We recommend talking to experienced partners and taking an honest assessment to your organization’s digital maturity. Ensure that your organization has a strong foundation or interest in modern engineering practices such as agile methodologies and DevOps. If there are clear gaps, these should be addressed and planned for before making the move to composable commerce.
Clarify vision
Once the groundwork is laid, we recommend creating a long-term vision by first assessing your current omni-channel customer experience and the technology stack powering it. To enable a future customer experience, envision the ideal customer journey. Consider which touchpoints and interactions should be enhanced to deliver a seamless and engaging customer experience across channels. Make the vision tangible and validate it with real users, and take in the learnings.
Map out a holistic plan to transition to a composable architecture, prioritizing areas that need most improvement. Talk to experienced and insightful partners, research products and platforms that seem to tick the boxes for your key requirements, and avoid the temptation to simply carbon copy what other companies have done. Composable commerce is more about finding what’s best of need, it doesn’t necessarily have to be the best of breed.
Rethink how to engage with partners
Rethink your approach to partner and platform selection by opting for a lightweight RFI process to narrow down potential partners and platforms. Discuss your vision with them, and conduct a targeted proof-of-concept (PoC), a limited production-grade pilot, or even a time-boxed hackathon to demonstrate value and determine the best fit for your needs. This should not take more than a couple of weeks up to two months.
The PoC or pilot will give you greater confidence in proceeding on the journey, and it will allow your in-house team to work with potential partner(s) and technologies, gaining valuable hands-on experience. After all, the goal is to be able to choose the partner and platform that will work best with your organization.
For learning and holistic evaluation, try to think of the PoC or pilot end-to-end in terms of experience, from storefront UI to order fulfillment and product data management for different roles (B2C/DTC, B2B, merchants, creatives, and developers), as well as getting a feel how it would be to work with the selected partner and technologies long-term.
Did you achieve the velocity you set out to? How did your in-house team feel about working with them? What blockers, if any, were uncovered and how did you handle them together? Done right, you’ll have established agile working practices with your partner, and you’ll also have key elements of the infrastructure already in place after the PoC.
Prepare business case
After the PoC, it’s all about communicating the long-term vision for your management, paired with a solid business case including TCO, expected return on investment and a high-level roadmap. An experienced and knowledgeable partner will help with all of this.
Replatforming
With the go-ahead and green light from management, it is essential to establish a structured and iterative process for the design and engineering of the new platform.
Holistic, incremental & evolutionary
Working seamlessly as one team with your select partner(s), begin by high-level planning, breaking down the project into manageable phases, product increments consisting of epics, and empowering your team. Keep focus on what is the value you’re looking to deliver to your customers, and what is the best way to enable and capture it.
Do you start the work with B2C / DTC in mind, looking to pilot the new platform on smaller markets to gain experience and learnings? Or how about starting with a potentially underserved B2B segment?
Should you look into creating a Design System as you go to ensure brand consistency and scalability across touchpoints?
What is your approach when it comes to pricing, inventory strategies, stock optimisation, order fulfillment and omnichannel use cases?
Ideally, you’re looking for a gradual, evolutionary approach that ensures that the platform is well-designed and executed to create more value to its internal and external users, while being flexible and responsive to new emerging needs.
Transparency & inclusivity
Collaborate closely with your partners, ensuring that key stakeholders have a clear understanding of the goals, timeline, and expected impact. Maintain open communications, share updates across teams to foster a collaborative environment e.g. by arranging regular, open-door demo sessions to show progress in a transparent way.
Together with your in-house team and partners, focus on automated testing, continuous integration, and continuous deployment to ensure that high quality code is pushed to environments quickly and efficiently, and make it easy for key stakeholders to review releases when needed. Ensuring accessibility, first class SEO, a well-thought data and analytics set-up is an integral part of the phase, too.
After replatforming
After replatforming and launching the first release, it is critical to monitor and optimize the platform to ensure peak performance and seamless customer experience with real users. Work towards a clear, established process and responsibilities with your in-house experts and partners for following production performance and health metrics, analyzing anomalies, identifying areas for improvement, and working on changes.
As believers in DevOps, we think the development team should be responsible for resolving these anomalies as their first priority. Modern application infrastructure allows zero downtime deployments and rollbacks. With larger scale, international e-commerce operations, having 24/7 incident management is a must.
Looking at the concrete results from replatforming to composable stack, there should be an immediate positive impact on store performance across KPIs including organic traffic, conversion rates, average order value and revenue.
Through close collaboration with your in-house experts and partners, there should be a deliberate focus in training and equipping your in-house team with the skills and knowledge necessary to maintain and also update the platform. This will foster a culture of continuous improvement and help keep your organization ahead of industry trends and technological advancements.
Ensuring future growth
The work doesn’t end once your stores are replatformed and launched. Ongoing, data-driven activities should be undertaken to optimize value throughout the funnel, ensuring price premium and profit optimization. Some build this capability in-house, some rely on partners with a proven track record. Data-driven marketing based on powerful customer data platforms (CDP) are also key enablers for smooth CX. At DK&A, we collaborate closely with our sister agencies Bluebird Media and NoA Connect.
Alongside continuous business performance improvement, take a proactive approach to innovation and allocate time to explore new value opportunities. Stay up-to-date about industry trends, best practices, and competitor activities to identify new opportunities and potential threats. Encourage a culture of experimentation and learning within your organization, allowing your teams to explore new ideas, shape creative solutions to challenges, develop and validate with real users.
Foster strong relationships with your partners and platform providers, as they can offer valuable insights and support in navigating the ever-changing digital e-commerce landscape. Assess emerging technologies that could enhance your platform’s performance and maintain an architectural runway. Together, ensure that your architecture enables seamless expansion as your business grows and evolves.
Sound business decision
At DK&A, we believe that transitioning from a monolithic platform to a composable one is a sound business decision. This shift can help boost the topline, drive down total cost of ownership, enable a new level of business agility, create more engaging customer experiences, and build loyalty, even leading to price premiums. All of this with unparalleled velocity and scalability.
Are you ready to transform your e-commerce and outshine your competitors?
