Why retailers cant afford to ignore composable commerce

Composable commerce opens new avenues for brands to thrive in the dynamic retail ecosystem, fostering discovery and enabling differentiation in an increasingly saturated market

The pandemic reshaped the retail landscape globally and pushed it towards an unprecedented digital maturity. While some countries like the UK are years ahead in terms of digital maturity, India is showing an upward trend for the same.

Such maturity requires brands and retailers to level up their tech to handle scenarios at scale and offer customers experiences beyond their already increased expectations. This has been made possible with composable commerce.

With digitally mature markets comes the fact that brands and retailers generate a major chunk of their revenue from their own e-commerce stores rather than from marketplaces. For retailers and brands in India around 70%-80% revenue comes from marketplaces, while in the UK, 70%-80 % of revenue comes from direct-to-consumer (D2C) channels.

Need for composable commerce
When brands move towards D2C, scaling becomes difficult after a certain level due to the monolithic systems, which impact revenues, making them stagnant. There’s only so much one can do with them in terms of meeting customer expectations with challenges like managing huge catalogues. They are not flexible and cannot adapt to scale as they are reluctant to integrations of ever-changing tech.

So, scaling businesses require a levelled-up tech stack that is adaptable and flexible to keep improvising which composable commerce makes possible.

How composable commerce works
The innovative concept of composable commerce involves breaking down traditional monolithic e-commerce platforms into modular components, allowing retailers to customize, replace, and combine them to create a truly unique shopping experience for customers.

The need for adaptable technology that can seamlessly integrate with omnichannel retail environments is essential for brands at scale. While some D2C brands in India have resorted to makeshift solutions to meet these demands, staying ahead of the competition requires constant innovation to retain customers and maximize lifetime value.

The road ahead
According to our estimates, 40% – 50% of revenue for brands will be generated from D2C channels in the next three years from the current average of 10%-20%. The D2C trend is catching on in India and it will only continue to do so. While this paradigm shift takes place, brands in India will require to come to terms with technology that is capable to support the scale.

Creating a connected commerce experience requires a robust tech stack that includes a product information management (PIM) system, an e-commerce platform, a content management system (CMS), an order management system (OMS) and analytics. While there may be other additions, this tech stack works fine. For Indian retailers to get on to their D2C journey, it’s important that they sow the seeds with composable commerce. The composable commerce technology helps to scale as it is limitlessly flexible, allowing businesses to use best-of-breed solutions that suit their need.

Composable commerce benefits
Here are some key benefits of composable commerce:

Enables omnichannel commerce: Composable commerce serves as the catalyst for omnichannel commerce, unleashing boundless flexibility and customization. By seamlessly integrating modular components, it enables businesses to swiftly adapt, personalize customer experiences, and harness the potential of emerging technologies.

With composable commerce, companies have the freedom to mix and match pre-built capabilities, APIs (application programming interfaces), and microservices, tailoring solutions to their specific needs, launching new touchpoints, and seamlessly integrating with third-party services.

This unparalleled agility propels customer engagement and positions businesses at the forefront of the ever-evolving landscape of connected commerce, where emerging technologies and shifting trends constantly shape the industry.

Omnichannel commerce offers several benefits for businesses and customers alike.

• It enhances the customer experience by providing a consistent and unified journey across various channels.
• It allows customers to seamlessly transition between online platforms, mobile apps, and physical stores without disruptions.
• It increases customer engagement by offering multiple touchpoints for interaction and provides convenience and flexibility, allowing customers to choose their preferred shopping methods.
• It ensures a seamless experience by synchronizing inventory, pricing, and product information across channels.
• It provides valuable insights for personalized marketing and decision-making.

Reduces total cost of ownership: Composable commerce brings forth a remarkable reduction in the total cost of ownership, empowering businesses to optimize their expenses. By offering the flexibility to pay only for the specific components they require, rather than investing in a monolithic platform with unnecessary features, retailers can significantly cut costs. The utilization of modular components and pre-built capabilities eliminates the need for costly custom development and time-consuming implementation processes.

Seamless integration with third-party services eliminates the need to build and maintain complex in-house integrations, further reducing expenses. This approach enhances operational efficiencies, minimizes errors, saves time, and ultimately reduces the total cost of ownership, allowing businesses to allocate resources more effectively.

Unlocks end-to-end commerce stack: Unlocking the potential of an end-to-end commerce stack, composable commerce disrupts the conventional approach of rigid and unscalable monolithic solutions. Embracing a modular and flexible framework, composable commerce enables businesses to harness purpose-built microservices and APIs that seamlessly integrate throughout the entire customer journey, creating a cohesive end-to-end commerce stack.

This empowers organizations to assemble and customize their commerce stack with precise components, resulting in a streamlined and highly efficient ecosystem.

By embracing an end-to-end commerce stack driven by composable commerce, businesses can achieve unparalleled agility, scalability, and the ability to swiftly adapt to dynamic market conditions, all while delivering exceptional customer experiences.

Summing up
Indian retail has a huge potential with a predicted revenue of USD 130 billion by 2026 up from USD 45 billion in 2021. Retailers can tap the growth opportunities in this rapidly growing market as they scale and make use of composable commerce to give powerful momentum to their growth.

While Indian retail is yet to reach digital maturity, retailers who adapt to the tech early will benefit in the long run and will get the early-mover advantage.

Composable commerce opens new avenues for brands to thrive in the dynamic retail ecosystem, fostering discovery and enabling differentiation in an increasingly saturated market. 

Vipul Aggarwal is the chief revenue officer at BetterCommerce, an early mover to introduce the composable concept in India. Vipul is a seasoned professional with over 13 years of experience, a headless commerce advocate and a martech enthusiast.

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