Introduction to Composable Commerce

Composable commerce is changing the face of digital retail. In fact, according to Elastic Path’s 2023 study, 72% of US retailers have already adopted composable commerce. Furthermore, Elastic Path’s research suggests this number is increasing. So, as composable commerce grows in popularity, getting a handle on the jargon is essential. This is where our introduction to composable commerce will help you gain a comprehensive understanding of key terminology, concepts, benefits, and best practices.

In 2020, Gartner foretold the shift toward composable commerce. In their report, ‘Composable Commerce Must Be Adopted for the Future of Applications’, Gartner emphasized the need for organizations to adopt a modular, cloud-native approach to enhance business agility. They advocated for a shift in architecture to enable more agile and future-proof digital commerce experiences. Suddenly, terms such as ‘Packaged Business Capabilities,’ ‘API-first,’ ‘headless,’ and ‘Microservices’ appeared everywhere.

So, what is composable commerce? What are the key terms to understand before re-platforming to a composable approach to eCommerce? And, what are the best practices regarding implementing new software and services?

This Pimberly introduction to composable commerce will answer all of the above, highlighting its strategic importance and benefits. We’ll also include some contributions from our partner network along the way.

However, if you’re in a rush, click here to jump to our composable commerce FAQ section.

What is composable commerce?

Composable commerce definition: composable commerce is an approach to online retail that involves hand-picking best-of-breed eCommerce components. Then, these components are combined (or ‘composed’) into a bespoke setup tailored to the needs of your business.

Composable commerce leverages a headless architecture and separates the front-end (the user interface) from the back-end (complex code and business infrastructure). Consequently, users can select best-of-breed technologies to construct a resilient and flexible eCommerce tech stack by decoupling the front and back-end.

Key differences between composable commerce and ‘traditional’ commerce

With composable commerce, eCommerce businesses aren’t restricted by a single monolithic application. Instead, Packaged Business Capabilities (PBS) allow retailers to build a modular tech stack to suit their specific needs.

Gartner defines PBCs as software components representing a ‘well-defined’ business capability recognizable by business users. A PBC is a collection of data schemes and services, event channels, and APIs. PBCs ensure autonomy (PBCs don’t rely on external data/services) and are used as building blocks for application product suites for bespoke application ecosystems.

On the other hand, monolithic systems are built on a single software application. This can be convenient—as you have everything in one place—but managing a monolithic system is challenging. For instance, if you want to change a particular module, you must update the entire system rather than a single part.

Composable commerce meaning: orchestra analogy

Think of a symphony orchestra to help understand the meaning of composable commerce. For example, each section—strings, woodwinds, brass, percussion—plays a specific role, contributing to the overall sound and performance. Moreover, the conductor selects the pieces of music, guiding the orchestra and ensuring they work in harmony.

Composable commerce works similarly. For instance, each modular software component and service is equivalent to an instrument. Payment processing systems, inventory management tools, and Product Information Management systems play specific roles. Like the conductor, an eCommerce director selects and integrates components to craft a cohesive platform.

Composable commerce empowers you to tailor your system architecture through a best-of-breed approach, ensuring a seamless alignment with your business requirements.

This approach guarantees a solution that flexibly adapts to your needs, diverging from the constraints often encountered with a monolithic or headless system.

—Michael Møller Christensen, COO & Head of Customer Success, Ucommerce

Comparison Table: Composable Commerce vs. Traditional/Monolithic Commerce

Composable commerce vs. Monolithic shouldn’t be considered a competition. In fact, many companies start their composable journey in a hybrid fashion. Typically, online businesses will transition from monolithic to composable via a gradual approach.

If you’re still unsure of the answer to ‘What is composable commerce?’ Here is a table to understand the critical differences between composable and monolithic commerce:

Feature

Composable Commerce

Traditional/Monolithic Commerce

Flexibility Highly flexible. Easily accommodates third-party, best-of-breed solutions. Less flexible. Limited by the capabilities of the chosen platform.
Customization Highly customizable. Tailor solutions to specific business needs. Limited customization. Constrained to the platform’s native features.
Scalability Easily scalable. Add or remove components where needed. Scalability is a challenge. It often requires a significant overhaul.
Integration Seamless integration with various APIs and microservices. Integration is more complex and requires multiple workarounds.
Maintenance Independent upgrades. Update one component without impacting others. Upgrades are difficult. You must update the entire system to update a small part.
Vendor dependency You’re not locked into a single vendor. You have the freedom to choose from various providers. In contrast, you’re reliant on a single platform’s ecosystem.
User Experience You can create a unique user experience tailored to audience needs. User experience is dictated by what the platform can and can’t do.

Understanding composable commerce architecture

Composable commerce is an API-first modular approach to commerce. Essentially, composable commerce enables online businesses (and their IT teams) to leverage many best-of-breed tech stacks to deliver on key business goals.

However, to understand composable commerce, it’s essential to identify where the need for modular architecture came from. The short answer is that legacy eCommerce platforms cannot provide robust functionality to deliver modern customer experiences. Instead, a solution with powerful functionality to meet specific business requirements was required.

Subsequently, the inability of traditional eCommerce platforms to meet specific requirements led to the introduction of headless commerce. Going ‘headless’ involves decoupling the front and back-end, giving developers more say in designing front-end experiences. However, composable commerce takes things a step further.

The innovations that headless commerce brought with it (decoupling the back-end and front-end components) mean it’s easier to customize their platform and make any fixes where required.

Type of Commerce Architecture Flexibility Scalability
Composable Commerce Modular, API-driven High, easily adaptable Highly scalable
Headless Commerce Decoupled front-end/back-end High front-end flexibility Scalable, flexible
Monolithic Commerce Integrated, tightly-coupled Limited, difficult to change Scalable but challenging

image of a graph detailing how the front-end and back-end are decoupled in a composable framework

Fundamental principles of composable commerce

The core principles of composable commerce involve an open ecosystem, integrating business-centric solutions, and modular architecture.

Modular Architecture

This refers to the ability to build bespoke eCommerce experiences by integrating microservices. Nevertheless, modular architecture allows you to manage upgrades on the fly, improving customer experiences across different touchpoints and accelerating your time to market.

Open Ecosystem

Fostering an open ecosystem means your development team can quickly add PBCs to the front-end and back. Seamless integrations connecting your best-of-breed eCommerce components to your central commerce services will drive business efficiencies sky-high.

Business Centric Solutions

Composable commerce allows you to utilize and implement specific solutions for your business. So, you cau can select solutions from various vendors to equip yourself with tools that precisely fit your unique business goals. Leverage the most suitable eCommerce tools for your specific market, product line, and target audience.

Composability is like striking an uncut diamond; each merchant will strike it in different ways based on their own priorities. Everyone needs some composability; no one tool does everything. But if you keep decomposing, you end up with a shattered mess that provides no business value and causes a lot of headaches.

—David Meakin, Head of Partnerships & Solution Engineering, Shopline

Composable Commerce vs. MACH Architecture

As we explore composable commerce, it’s essential to consider a concept that often gets confused: MACH Architecture. Both terms are often used interchangeably. However, they aren’t the same thing.

Composable commerce vs. MACH Architecture isn’t a fair way to match each other as it isn’t a competition. In fact, MACH architecture can exist without composable commerce and vice versa.

That being said, MACH makes implementing a composable commerce tech stack easier. Leveraging components built on the principles of MACH architecture will allow you to scale more effectively. But, the concepts fit together perfectly.

MACH—Microservices-based, API-first, Cloud-native SaaS, and Headless–is an approach to software development that focuses on leveraging modular microservices to scale your business. In other words, MACH architecture combines multiple technologies to create a modular commerce ecosystem.

Here are the fundamental principles of MACH technology:

  • Microservices: These small individual and modular services work together to form a more extensive application. And, each microservice can be developed independently.
  • API-first: This approach prioritizes the development of Application Programming Interfaces (APIs) for functionality. An API-first approach ensures all system components can communicate, making it easier to integrate tools as and when they’re needed.
  • Cloud-native: This principle involves leveraging cloud computing. This is because cloud-native applications are designed to be scalable, resilient, and flexible, taking full advantage of cloud environments.
  • Headless: In a headless architecture, the front-end (or the ‘head’) of an application–what the customer–is decoupled from the back-end. Nevertheless, this allows for more flexibility in how content is presented, enabling businesses to use the same back-end to feed data to different front-end systems.

Ultimately, combining the principles of MACH with the dynamic framework of composable commerce allows you to develop an agile digital framework.

MACH promotes companies to benefit from the best of both worlds – the Buy & Build strategy. An overarching question you need to consider when thinking about build versus buy is what are the consequences of buying? If you are looking at a digitally differentiating capability, will buying a commoditized solution truly give you a competitive edge?

Will you be able to extend the solution to add differentiating experiences and digital services later on? What does the licensing model look like – if it turns successful, are you able to cost-efficiently scale it use? If you can say yes to that, then you should probably buy it, and focus on building the capabilities that differentiate your offer.

—Casper Rasmussen, President, MACH Alliance

Could you explain Microservices in more detail?

Microservices are a distinctive approach to software architecture. A large solution is divided into small, independently deployable services. In addition, these ‘microservices’ are responsible for completing a specific task in conjunction with other services to create a cohesive application ecosystem.

In a traditional monolithic setup, all components are deployed as a single unit. Furthermore, because microservices are independently maintained, they’re easier to scale, identify faults, and support unique and diverse tech stacks.

In short, microservices enable modular and flexible design, allowing businesses to adapt rapidly to changing demands.

The benefits of composable commerce

As we’ve explored, composable commerce is transformative. However, implementing it can be a headache. So, if you want to get key stakeholders on board, here are some key benefits of composable commerce.

Agility

One of the main benefits of composable commerce is that a modular approach improves business agility. Composable ecosystems foster a flexible environment, allowing you to easily (and quickly!) switch things up to react to changing consumer demands.

Convenience

Because composable commerce is modular, each component can be replaced without impacting other technologies. You can easily update parts of the system without causing disruption or downtime.

Flexibility

Assembling a bespoke eCommerce stack means you have the flexibility to manage every aspect of your business. And, because the front-end and back-end are decoupled, you can refine customer-facing experiences and optimize how the company operates behind the scenes.

Scalability

By definition, composable commerce’s agile architecture means you can quickly scale to create experiences that best resonate with your target audience. Because composable systems are a collection of interconnected services, they offer high levels of flexibility. So you can tailor your platform to suit the specific needs of your customers.

Lower Total Cost of Ownership

Monolithic systems often lock businesses into a specific vendor/technology. By contrast, composable commerce allows companies to choose from various vendors and technologies. And, switching vendors is costly and time-consuming.

Overall, embracing composable commerce means you have a lower Total Cost of Ownership (TCO) and is far less expensive than re-platforming.

Faster time to market

The ability to add and remove components at a moment’s notice means your business can respond to market changes. As technology constantly evolves, this is crucial for staying competitive.

Best Practice in Composable Commerce

If you’re looking to adopt a composable commerce solution, then here are some essential tips you and your team must consider:

  • Define your business goals: Ensure your goals align with the strategy of your business. Ultimately, clear business goals will help you define the necessary components to build the best composable commerce tech stack for your business.
  • Embrace a Microservices-Based Approach: Each component of composable commerce technology (from back-end to front-end) must be a standalone service. Consequently, this allows for more accessible updates and maintenance. And, it means you’re not just building another monolith!
  • Choose the right partners and vendors: Select vendors offering best-of-breed solutions for each function. When researching and demoing components, ensure their solutions align with your business objectives. Ensure your vendor’s technology can be easily integrated into your tech stack.
  • Introduce composable commerce in phases: Replatforming from a monolithic solution to a composable set-up comes with costs and risks. To achieve quick results, it’s best to adopt a step-by-step approach. Identify areas where you can achieve quick wins. For instance, if you want to optimize order processing and fulfillment, consider implementing an Order Management System (OMS) first.
  • Adopt an agile and iterative approach: Roll out changes in stages, testing and gathering feedback at each step. Then, regularly update and refine the components in your tech stack based on new technologies and customer feedback.

Composable commerce enables retailers to build a commerce stack by connecting individual ‘best of breed’ technologies.

This approach allows retailers to select the best tech to suit their particular requirements, with the beauty of being able to replace them should the individual component not keep up with the retailer’s demands.

—Bruce Wright, VP Sales & Partnership, Pimberly

Composable Commerce Services and Platforms

Below, find a selection of some of the best composable commerce technologies on the market:

Ecommerce Platforms

The core of your system, your eCommerce platform enables the day-to-day management of your online store. Typically, these platforms offer functionalities like product management, order processing, and customer management.

System Integrators

System integrators play a crucial role in connecting composable commerce platforms to one another. Furthermore, system integrators act as connective tissue, connecting disparate technological components to create a cohesive and functional eCommerce system.

Their involvement is significant due to the modular nature of composable commerce, where different technologies need to be seamlessly integrated.

Content Management Systems (CMS)

Your CMS will manage digital content, allowing for the publishing and creation of content for your eCommerce store.

Payment Gateways and Processing

These will handle online transactions, including credit card processing and secure payment methods (ensuring you get paid!).

Inventory Management Systems

A capable inventory management system tracks stock levels, orders, sales, and deliveries. In addition, these systems help businesses maintain optimal inventory levels and ensure product availability.

Order Management Systems (OMS)

Tools designed to track sales, orders, and fulfillment. They ensure the entire order process—from placement to delivery—is smooth.

Product Information Management (PIM)

PIM systems provide users with a central repository of product information to optimize all the data associated with your products, ensuring consistency across all sales channels.

Analytics and Business Intelligence Tools

These tools will provide insight into customer behavior, helping you make data-driven decisions. So, leverage these tools to tap into sales trends and increase overall business performance.

Logistics and Shipping Solutions

You need to make sure your products get to your customers, right? These solutions include carrier integration, label printing, tracking, and inventory management.

Composable isn’t just a beautiful technology end state made up of all “MACH” components. It is a way of working and an operational approach that yields more efficiency/flexibility. So, there is often no need to replace every feature with a “MACH” technology! Some of your current stack will work well as it is. A clear set of requirements will guide the way to understanding what needs to change and how.

—Serge Albohayre, Head of Partnerships & Business Development, Apply Digital

Composable Commerce for Businesses: Why it matters

Composable commerce offers online businesses a flexible, scalable, and enhanced user experience. Here’s precisely why composable commerce matters and is taking online retail by storm:

  • Composable commerce allows businesses to handpick best-of-breed solutions that suit their unique requirements. Swapping components will enable you to adapt your set-up and constantly tweak it as your business requirements develop.
  • Constructing a composable ecosystem accelerates and reduces dependency on a single vendor, allowing quicker innovation.
  • Leverage tools to create a highly personalized and engaging customer experience for online shoppers. This way, composable commerce can help make a seamless and cohesive customer journey across multiple touchpoints.
  • Composable commerce provides a growth-ready framework. Moreover, without significant reconfiguration, you can quickly ramp up operations, including expanding product lines or entering new markets.
  • As MACH and PBCs evolve, retailers and brands must future-proof their business. So, leverage the best modern technology to prepare your business for the future of online retail.

Pimberly Instant Insights: Composable Commerce 101

Q: What is composable commerce?

A: Composable commerce allows online businesses to handpick and connect various best-of-breed services and solutions to create a customized eCommerce platform. This modular setup allows for greater flexibility and scalability, making incorporating new technologies much easier.

Q: What are the benefits of composable commerce?

A:  Flexibility, scalability, customization/flexibility, speed of innovation, faster-time-to-market, more efficient day-to-day operations.

Q: What are Packaged Business Capabilities?

A: PBCs are self-contained, functional business units. They are ‘plug-and-play’ components, representing the shift from a monolithic system to a modular ecosystem. Each PBC provides a specific business function/service (Product Information Management, inventory management, payment processing, etc.).

Q: Headless vs Composable Commerce: what are the key differences?

A: Composable commerce involves integrating multiple eCommerce services. Headless commerce allows retailers to de-couple the front-end from the back-end so that both can be managed separately.

Q: Composable commerce vs MACH architecture: what are the key differences?

A: MACH emphasizes specific technical principles (microservices, APIs, cloud-native, headless). Composable commerce focuses on developing a business strategy of selecting solutions tailored to your business needs. This allows retailers to choose best-of-breed solutions and add/remove them as necessary.

Note: A composable infrastructure can—and often does—include MACH principles. Composable commerce is about constructing a commerce system. MACH provides the framework for structuring the composable system.