“How Composable” became the hottest buzzword in commerce

In recent years there has been an upsurge in vendors offering so-called “composable” solutions. Last week, three e-commerce tech companies — Rally, Pack Digital, and Swell Commerce — teamed up and announced a new “Go Composable” initiative for a “composable” tech stack. Meanwhile, e-commerce giant Shopify released its own composable solution in January. The new offering, dubbed “Commerce Components” by Shopify, is aimed at retailers who may not want to migrate their entire tech stack to Shopify, but instead just want to pick and choose the features they want to leverage.

At its core, composable commerce is about giving ecommerce brands the ability to choose every single part of their technology stack — from their loyalty program provider to their checkout system — without being bound by the constraints of any vendor or platform . It is a step towards unbundling after bundling dominated the last decade of e-commerce. Platform giants like Shopify and BigCommerce gained notoriety by presenting young startups with unified solutions to help them launch their websites quickly and easily.

Developers and vendors say composable commerce enables brands and retailers to create an ecommerce experience that’s more tailored to the needs of their respective businesses, but is less expensive and resource-intensive than building each individual component individually. However, other developers warned that a composable approach might not make sense for fledgling brands. And even the most ardent proponents of composable commerce say there are still many obstacles preventing many brands from taking a truly composable approach.

“It’s the direction commerce is going when it comes to how to create trading experiences,” said Mike Lowndes, vice president analyst at Gartner.

What is Composable Commerce?

The term composable commerce was first popularized by Gartner in 2020. Lowndes said he was looking for a term to describe a more modular approach to e-commerce, read a report by another colleague at Gartner on “the composable enterprise” and thought, “That’s a perfect description of the direction it’s going.” .”

Before the advent of platforms like Shopify and BigCommerce — which launched in 2006 and 2009, respectively — businesses that wanted to sell their products online had to essentially build everything themselves. These platforms made it easier for anyone to start an ecommerce website by providing a range of services to manage everything from payments to sending shipping updates to customers. They’ve also launched third-party app stores to outsource some of the features they didn’t want to develop themselves, giving ecommerce brands multiple SMS providers or review management systems to choose from.

As a result, “the apps we were using just kept growing … and became very large platforms with a lot of functionality on top of them.” However, the downside to this approach was that they became very slow,” Lowndes said. In theory, one of the benefits of a composable approach to building an ecommerce site can be faster.

And while merchants have some freedom and choice when it comes to how they build their website, most merchants using Shopify are still limited to which post-purchase providers exist on the Shopify App Store, for example.

But with composable commerce, “you can use whatever you want for any part of the experience, and you don’t have to be like, ‘Okay, I use Shopify for my orders, I also use Shopify for my products.’” Mark William Lewis, co-founder and Chief Technology Officer at Netalico Commerce, said. And “rather than (everything) being individual, everything can be some sort of other SaaS service that you can connect to.”

Is composable the same as headless?

The rise of composable commerce follows a similar trend emerging in e-commerce. A few years ago, headless commerce also became a popular term among brands and retailers who also wanted to build a more customized ecommerce experience. Rally founder Jordan Gal described composable commerce as “another term for something similar (down to the headless)”.

Lewis said that headless simply means decoupling the front end of an ecommerce site from the back end.

He said the term “composable commerce” is basically “trying to make it clear that everything can be split – reviews and SMS and all the services you use.” In the January press release announcing his new composable stack, gave Shopify the hypothetical example of an enterprise retailer that leverages some of Shopify’s most well-known components, like its checkout, while also being integrated with the “retailer’s preferred back-office service.”

One of the advantages of headless commerce was that, like composable commerce, it could theoretically result in a faster website. However, headless commerce websites are also technically more complex to build.

Gal, in turn, said he feels headless commerce gets a bad rap, as merchants who have attempted to implement a headless commerce solution have found it technically frustrating for a variety of reasons. For example, Gal said he’s heard of “merchants trying to use Shopify mindlessly when it wasn’t really meant to be.”

Conversely, some vendors are using the term “composable commerce” to lure in brands that may shy away from headless but still want customization and flexibility.

What are the benefits of Composable Commerce?

Gal, one of the founders of the Go Composable initiative, said: “What we want to show here is an achievable, realistic approach to success when a trader is frustrated with a platform and the limitations that come with it.”

Gal’s company Rally was founded in 2020 and last month announced a $12 million Series A round led by March Capital. Rally offers brands a supposedly “composable checkout” solution that supports multiple back-end and front-end platforms, payment processors, and payment methods.

For example, Rally integrates with several buy-now and pay-later providers like Affirm and Afterpay, as well as commerce platforms like BigCommerce, Salesforce Commerce Cloud, and commerce tools. There is currently no integration with Shopify.

When asked what sets Rally apart from other checkout providers, Gal replied, “In some ways, the most important thing is independence.”

Composable commerce vendors tout similar KPIs that most technology vendors use when trying to persuade brands to use their solutions: that is, they claim their solutions result in higher average order value or higher conversion rates. But the main theme many composable commerce vendors cite is that it gives brands freedom and independence without having to customize everything themselves.

Lewis said that like headless commerce, composable commerce should theoretically result in a faster website — but that’s not always a given.

Why isn’t everyone adopting composable commerce?

Gal said that one of the limitations of building exclusively on platforms like Shopify is that “a brand can’t just create another checkout because they feel like it.”

But not every brand wants or needs to set up its own checkout. To that end, many developers and agencies have said that composable commerce is better suited for larger retailers who don’t want to be locked into one platform and have the time and resources to invest in a truly composable experience. Shopify, for example, markets its Commerce Components offering directly to wholesalers and announces Mattel as its first customer.

“If you’re an e-commerce startup that just sells socks or shoes, it might sound sexy to have the coolest and supposedly fastest website, right?” said Lewis. “But to be honest, they probably shouldn’t make these kinds of technology investments in the beginning and focus more on the marketing side of things.”

Even proponents of composable commerce admit that the movement is still in its infancy. Eric Ingram, co-founder and CEO of Swell Commerce said the ultimate goal of the composable commerce movement is to make building unique ecommerce experiences “as easy as Shopify, as easy as Squarespace” in terms of ease of setup make. But that would require even the largest platforms themselves to become more flexible in terms of the integrations merchants can use and how they can customize different parts of their website.

“That’s what we’re working towards,” Ingram said.