• June 10, 2024
  • By Daniela Jurado, executive vice president, North America, VTEX

From Buzzwords to Business Reality: How Composability Is Transforming Retail Tech

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You walk any hall at NRF or ShopTalk and you’ll hear the words composability, headless commerce, and microservices. But what do they really mean? Let’s break down the jargon.

Composability is an approach that empowers retail businesses to adeptly meet the demands of digital transformation. At its core, it involves breaking down a system into interchangeable building blocks that can be selected and assembled in various combinations to meet specific needs. This modularity enables rapid adaptation and innovation.

Headless commerce is the decoupling of the front end and back end of an e-commerce application. This separation allows changes to be made on either end without impacting the other, facilitating flexibility in updates and enhancements without disrupting the user experience.

Microservices are software architecture where complex applications are composed of small, independent processes communicating with each other using language-agnostic APIs. These services are highly maintainable and testable, loosely coupled, independently deployable, and organized around business capabilities.

These terms are increasingly becoming the focal point in retail technology. You put them all together and you get another term, “Pragmatic Composability.”

The Benefits Are Endless

One great thing about pragmatic composability is that it does not require a full-scale, costly, and disruptive platform overhaul. Pragmatic composability, in fact, advocates for a gradual adoption of composable elements based on business priorities and readiness.

Pragmatic composability allows businesses to assess their existing processes and systems, identify areas that would benefit most from flexibility, and implement modular components sequentially.

But there are so many more benefits than that. For example:

  • Composability lowers maintenance burden. Upgrading, maintaining, and extending monolithic legacy systems place a significant burden on IT teams. Composable architectures rely on cloud-native technologies that provide automatic updates, eliminating the need for upgrade management. The use of microservices and headless technologies makes it easy to integrate new foundational components.
  • Composability is flexible. The composability mantra is “Build less, test more.” You can quickly test new capabilities—and roll them back if you don’t get the return you expected on your investment. There’s no vendor lock-in and minimal risk to your architecture or business. This is critical for keeping up with competitors. Just look at generative AI as an example: OpenAI released ChatGPT in November 2022, and today countless companies offer chatbots, personalization, and other AI-driven features that help them get ahead.
  • Composability moves at the speed of business. The world of commerce moves fast. Businesses need to be able to keep up with customer preferences that change as quickly as TikTok videos go viral, and adjust inventory strategies when supply chain issues arise. Composability lets organizations move fast to address changing market dynamics in real time.

This is not just hypothetical. Giants like Carrefour, Sony, Motorola, and Cia Hering are using a composable approach and are increasing conversions and average order value, rapidly expanding to new locations, and dramatically improving customer service.

And there is another massive benefit: composability doesn’t require replatforming and ripping/replacing your entire systems.

In fact, it allows businesses to assess their existing processes and systems, identify areas that would benefit most from flexibility, and implement modular components sequentially. By adopting this incremental approach, companies can better manage risk.

Even B2B commerce brands are entering this domain. One such example is bisco industries, a distributor of electronic components across various sectors, including aerospace. They transitioned from a legacy commerce platform to embrace flexibility, launching their B2B marketplace commerce with a composable platform. This platform, designed for scalable and production-ready web applications, facilitated the inclusion of millions of products, tens of thousands of product attributes, real-time manufacturer inventory visibility, and an optimized user experience for the B2B manufacturing supply chain. Moreover, it seamlessly integrates the digital buying community with bisco industries’ network of local sales managers, fostering a collaborative commerce ecosystem—a pioneering initiative in their industry.

For e-commerce companies, no matter whether B2C or B2B, embracing a composable architecture means not just staying current with technology trends, but actively enhancing operational agility. This architecture leverages headless technologies and microservices to drive flexibility, allowing businesses to deliver better customer experiences, optimize inventories, and rapidly integrate new technologies. Whether it’s rolling out new features, expanding into new markets, or experimenting with innovative business models, composable businesses are well-positioned to respond swiftly and effectively. As the demand for customized and fast online stores grows, numerous commerce platforms are now providing front-end development tools. These tools empower developers to unleash their creativity and expertise in crafting robust and distinctive ecommerce solutions.

Making the Shift

Companies are increasingly looking for an alternative to the monolithic architectures of the past. The drawbacks of having a single, bulky system that’s costly to upgrade or extend have long outweighed the benefits.

This is where composability shines because it involves combining different software solutions to create the architecture that meets your organization’s needs—now and into the future.

Here are a few things you can do now to start the shift:

  • Audit existing systems. Identify and evaluate the existing technological frameworks and business operations. Understanding what works and what doesn’t can highlight potential starting points for integration.
  • Prioritize based on impact. Not all systems need immediate overhaul. Prioritize composable elements that will have the highest impact on customer experience and operational efficiency.
  • Implement in phases. Start small with modular upgrades to less critical systems to test and learn from the implementation. Gradually expand to more significant aspects of your technology stack.
  • Leverage expert partnerships. Collaborating with technology partners who are well-versed in composable infrastructure can provide guidance tailored to your specific business context.
  • Embrace continuous improvement. Composability is not a one-time project but a continual process of adaptation and improvement. Regularly revisit strategies, technologies, and processes to refine and optimize.

The Future Is Bright

Composability isn’t about specific technologies. It’s about achieving the benefits of a new approach: agility, scalability, flexibility, and resilience. Pragmatic composability focuses on integrating those benefits into an existing architecture through a gradual migration.

The pragmatic approach to composability allows businesses to minimize disruptions and maximize time to value. It avoids the pitfalls of a dreaded “replatform” project while achieving the benefits of new technology.

To adopt pragmatic composability, you need to look for solutions that are designed to integrate into an existing architecture. Some technologies only work in a “greenfield” setup, where a company builds a best-of-breed architecture entirely from scratch. As you select technologies, think about your current setup and the value you’re looking to achieve in the short term. Don’t get swept away by the promises of solutions that can’t add value to your current setup.

Composability isn’t just a technology approach—it’s also a mindset shift. Pragmatic composability unites IT and the business around a set of technologies that empower the entire organization to deliver what customers need.

You don’t have to embark on a costly, time-consuming system overhaul to bring your organization into the composable future. Pragmatic composability is the approach retail businesses need to position themselves for growth and evolution long into the future.

Daniela Jurado is executive vice president, North America, at VTEX. Throughout her career in enterprise digital commerce at VTEX, she has had the pleasure of working directly with brands such as Adidas, Whirlpool, Miriade, OBI, and others, accumulating experience in various verticals such as fashion, DIY, electronics, home appliances. Jurado has also led the business development of VTEX in key regions and markets, including EMEA and Latin America, for many years.

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