A lightning-fast, mobile-first experience. Personalized, relevant, contextual search results. An online shopping experience that complements — not competes with — your in-store retail experience. These best practices are all key to running a successful ecommerce site, and they’re all achievable through a composable commerce approach.

In this blog:

• What is composable commerce?
• Composable commerce explained
• Composable vs. traditional commerce?
• Benefits of composable commerce
• How to transition to composable commerce
• Integrating and managing best-of-breed components
• How Damstahl switched to composable commerce
• Create a composable ecommerce site

What is composable commerce?

Composable commerce integrates best-of-breed components to enable agility, customization, and scalability. Compared with a monolithic platform, these advantages make it the preferred approach for ecommerce sites and account for the fact that 92% of brands have adopted it. And by 2026, according to Gartner, all the leading cloud platform and SaaS providers will supply component marketplaces to support composable strategies.

Whether you’re considering a switch to composable commerce or looking to optimize your existing composable strategy, this post offers insights.

Composable commerce explained

Composable commerce, a term coined in 2020 by Gartner, is connecting — or “composing” —  packaged business capabilities (PBCs) such as a storefront, checkout, and search to create an ecommerce platform. It’s a little like building an online store with several sets of LEGOs: you’re picking the most optimal bricks from different sets to build the ideal platform for your use case.

This concept is aligned with the MACH Alliance principles for building a modular, adaptable commerce system. The mission of this nonprofit organization is to streamline digital experiences with open, connected enterprise technology.

A MACH-centered ecommerce store architecture might look like this:

MACH promotes:

• M — Use of microservices: This refers to using small, independent functionality, for instance, for user log-in, promotions, or payments. These small services can be deployed, managed, and scaled separately to meet the company’s unique full-store needs.
• A — API first: Making all functionalities accessible through APIs facilitates integration and communication between components such as the content management system, search engine, and payment gateway. The result is a cohesive experience for shoppers.
• C — Cloud-native software as a service (SaaS): Using SaaS leverages the full capabilities of the cloud, including storage, hosting, and scaling of each microservice. Cloud-native services can be quickly deployed and scaled, such as when scaling up search during peak shopping times and not wanting to worry about physical server limitations.
• H — Headless: The headless commerce architecture decouples the front-end presentation layer from the back-end commerce functionalities, allowing for more design flexibility and faster performance. One application: engineers can innovate on the front end without disrupting back-end operations.

With the headless approach, you can build apps to meet the needs of different types of users, such as shoppers and store associates. A headless ecommerce store diagram might look like this:

Composable vs. traditional commerce

To understand in depth what defines composable commerce, let’s compare its features with those of traditional commerce.

Traditional commerce

Designed as all-in-one solutions, these platforms entail:

• Simplified initial setup: Because everything is bundled, a business can quickly deploy the platform without having to integrate multiple systems.
• Single-vendor dependency: While having only one system can simplify vendor management, it can also mean any platform limitations and issues directly impact the business.
• Limited scalability: As the business grows or experiences peak periods, the monolithic system may be overwhelmed to the point that performance and the customer experience are compromised.
• Reduced flexibility: Changes and updates to one part of the system often require changes to other parts, which can be complex and time-consuming.
• Slower updates: Because all functionalities are tightly integrated, introducing new features and updates may be a cumbersome process.

Composable commerce

A modular architecture involves selecting individual components to create a tailored solution, which means:

• The ability to innovate: This architecture capitalizes on the latest approaches from multiple vendors to continuously improve the customer experience and stay ahead of the competition.
• Faster updates: Modular components can be updated independently, meaning quick implementation of new features and improvements without having to wait for a full system update.
• Enhanced scalability: Each component in a composable commerce setup can be scaled independently. For example, if a website is hit with a surge in traffic, it can scale up its payment processing without affecting other parts of the system.
• More flexibility: A company can choose components that best fit its unique needs, mixing and matching functionalities from vendors.

Benefits of composable commerce

Businesses that transition to composable commerce typically enjoy these benefits:

Revenue growth

With the ability to integrate various best-in-breed solutions, a business can optimize every aspect of its customer journey to focus on increasing conversion and revenue. For example, a retailer might integrate a top-tier recommendation engine that personalizes product suggestions based on individual customer behavior, leading to an enhanced shopping experience.

Lower total cost of ownership

Paying only for necessary components can lower the total cost of ownership. For instance, a small ecommerce site may initially need basic search functionality and a simple payment gateway. As it grows, more advanced features can then be added without incurring the high costs of a monolithic system.

Customization

Composable commerce allows for deep customization of the commerce stack to meet specific requirements. For example, a luxury goods retailer might want to create a dazzling product display, aligning with its brand identity and meeting shopper expectations. It could integrate a specialized CMS and front-end framework that supports this.

Faster innovation

With composable commerce, modular components can be updated and replaced independently, allowing for rapid deployment of new features and technologies without disrupting the entire system. For example, if management of an online marketplace feels that the site could benefit from an AI-driven chat support system to enhance customer service, they could add it with minimal disruption.

Adaptability

A business can quickly adapt to market changes and fluctuations in shopper demand by swapping out or upgrading components. For instance, if a fashion retailer finds that its payment processing system isn’t performing well in a new international market, they could easily replace just that component. Whether a retailer is integrating a new payment method, enhancing the search experience, or adding a sales channel, a modular architecture allows for swift, seamless adjustments.

How to transition to composable commerce

If you’re looking to move your ecommerce site to a composable commerce setup, here’s how to get started:

• Build a business case: Demonstrate the potential ROI and strategic benefits to your stakeholders. Highlight case studies, projected cost savings, and potential revenue growth. Articulate how the architecture will support strategic objectives, such as improving the customer experience and accelerating time to market.
• Take an incremental approach: Start by integrating a few key components and gradually expanding as your teams get more comfortable with the new architecture.
• Choose the right partners: Selecting the right vendors and partners is essential. Look for those that bring proven expertise, robust APIs, and strong support systems.

You’ll want be aware of these potential challenges:

• Integration complexity: You can work with experienced systems integrators and use platforms designed for seamless integration, but you may occasionally run into snags. Consider adopting a microservices architecture to break down complex processes.
• Maintaining data consistency: You can implement a unified data management system, then regularly audit your data quality and synchronize updates across systems to prevent discrepancies.
• Adequately training staff: You can set up a structured training program that includes both initial sessions and ongoing learning. You can use online courses, workshops, and hands-on training to ensure that your team is comfortable with the new system.

Integrating and managing best-of-breed components

Here are some tips on successfully managing your independent components:

Integration

• Build in strong API support, which enables data to flow smoothly between systems, leading to seamless functionality across your ecommerce platform.
• Use middleware and integration platforms to manage communication between your components. This will help reduce the complexity of direct integrations.
• Implement robust monitoring and logging to track the performance of integrated components and be able to react quickly.

Management

• Maintain and regularly update each component to ensure security and performance. Conduct periodic performance reviews and optimization.
• Establish a governance framework to oversee the integration and performance of your components, making sure they’re aligned with your business goals and meeting standards.
• Foster collaboration between your business and IT teams to make sure your commerce stack aligns with goals and customer needs. Establish a communication channel for discussing concerns.

How Damstahl switched to composable commerce

Damstahl, a Denmark-based stainless steel wholesaler, needed to streamline purchasing for buyers in industries such as dairy. The company, along with its digital agency and systems integrator, investigated headless commerce in order to provide the flexibility to more easily modify software applications to meet changes in market demand. And to enhance the B2B customer experience and boost business performance, it launched a new ecommerce site adhering to composable commerce principles.

The team managed integration seamlessly with Damstahl’s ERP and PIM systems.

Damstahl achieved these key results:

• Better search: With the site’s search functionality, powered by Algolia, business buyers gained the ability to add their item numbers to queries. And to easily find what they need, they can now highlight key product attributes such as diameter, radius, and thickness.
• Faster order processing: Compared with the traditional ERP method, the company’s sales reps can now process orders 60% faster.
• Direct ordering: The company was able to introduce a “punchout” system that lets buyers place orders straight from their ERP systems.
• Personalization: By analyzing clickstream data, marketers can now personalize buyers’ search results to show the most relevant items.
• A better buying experience: They substantially improved the purchasing experience and increased operational efficiency.
• Higher revenue: Gross profits are now higher for web orders than traditional offline orders.

Create a composable ecommerce site

For all the reasons we’ve discussed, composable commerce is the secret sauce that can take an ecommerce site to higher performance levels. With a modular architecture, you can create a customized, scalable stack that meets all your site’s needs, setting you up for a prosperous future.

Want to jump in? At Algolia, our robust APIs deliver fast, personalized search that helps drive shopper engagement and conversion. Get in touch for a demo of how you can take your site experience to the next level and capitalize on the benefits of a composable commerce framework.