Composable Commerce: The Ultimate Guide

The development of e-commerce continues unabated: According to the HDE Online Monitor, the market volume of German online retailing in 2022 was 89.4 billion euros. In 2019, i.e. before the Corona years, it had stood at 59.2 billion. This enormous growth testifies to great sales potential. However, we do not want to underestimate the fact that more and more retailers are making the leap into e-commerce and that opportunities are needed to stand out from this crowd with an individual shopping experience. Composable commerce is a great opportunity for this.

In this blog article, we'll tell you what the term means and why Shopify Plus and the new Commerce Components are ideally suited for the composable approach.

Composable Commerce Definition: The Best of Different Worlds

In addition to convenience, online customers particularly appreciate the enormous variety of suppliers in e-commerce. Instead of having to resort to one and the same generic product, they can choose the variant that best suits their own ideas from a wide range of articles.

However, diversity is not limited to the range of products on offer. Modern store systems have long since ceased to follow a rigid template that offers no scope for customization beyond the integrated functions. Shopify, Shopware & Co. are so popular precisely because they offer store operators a completely open economy: As a merchant, you draw from a wide range of third-party providers with whom you can set up your online store and adapt it to your customers' requirements. This very idea describes the approach of Composable Commerce very well.

Originally, Composable Commerce does not come from e-commerce, but from application development. Specifically, the application in this case is your online store. By combining different components into a functional e-commerce platform, it's possible to develop a customized solution that meets the needs of even the most demanding customers.

Composable Commerce enables e-commerce teams to select and assemble best-of-breed commerce solutions and compose them to meet their unique business needs. So by flexibly choosing from a wide range of modules, companies can define exactly how they want their front end to look and their business to function on the back end.

MACH: The foundation of Composable Commerce

In connection with Composable Commerce, the term MACH architecture is also usually mentioned, as it forms the technical basis for modular systems. For a better understanding, we would therefore also like to dedicate ourselves to this topic and explain the acronym MACH in more detail.

MACH stands for Microservices, API, Cloud and Headless. The acronym thus combines some of the most significant e-commerce buzzwords of recent years.

Microservices

Microservices are independent applications provided by different providers. These usually relate to a specific task area and are developed independently by the provider. Take the email marketing provider Klaviyo, for example. You can use this service to send your newsletters and push messages without affecting other system components. For example, whether you use services such as pathway or WISO for your Shopify accounting doesn't matter when considering your email marketing with Klaviyo.

APIs

Managing a large number of individual microservices would be enormously time-consuming and not very economical. For this reason, it has proven successful to combine various individual solutions into an overall complex - basically, this is also the core of Composable Commerce. Today, the technical implementation is mostly done via so-called Application Programming Interfaces, APIs for short. The API enables several previously independent applications to communicate with each other.

Cloud

Cloud hosting has largely replaced on-premise solutions in e-commerce. The core advantages of the cloud lie in the flexible use of resources, a high level of fail-safety and the elimination of the maintenance effort for your server landscape. These advantages are also the reason why cloud-based SaaS solutions (= Software-as-a-Service) are the means of choice for the MACH architecture or for Composable Commerce.

Headless

PCs have long since ceased to be the dominant, or even the only, medium through which your customers make digital purchases from you. Smartphones, tablets, smart speakers and smartwatches are joining the ranks. The problem: with a monolithic template, the content of your store cannot be ideally output for every device category. That's why more and more systems are adopting the so-called headless approach, in which the frontend visible to the user is separated from the logic in the background, the backend. Via the headless CMS, the frontend can be optimized for each device type and the user experience can be significantly improved.

Packaged business capabilities vs. microservices

Packaged business capabilities and microservices are both approaches to developing and delivering software solutions that are often confused. However, there are some important differences between them:

Advantages of Composable Commerce

The flexibility of the Composable approach results in a number of advantages for you. We have summarized the most important ones for you below.

Independence: By freely selecting your system components, you are not limited to a specific provider or dependent on their conditions.

Scalability: Maybe tomorrow functions will become relevant for you and your Shopify store that you don't need today. A Composable platform can be expanded with new features at any time and adapted to the growth phases of your business.

Cost efficiency: The flexibility of Composable Commerce is also reflected in the price of your tech stack. You build a software package that fits your needs and only pay for the features you actually need.

Simplicity: Typically, you extend your online store via apps and the system's internal API interface. This way, new components can be deployed quickly. Adding new apps, for example, is possible with Shopify in just a few clicks and without downtimes.

Challenges

In addition to the numerous advantages, the composable approach also results in some hurdles, which we naturally do not want to ignore at this point.

Time required for evaluation

Before you can assemble your components into a complex, you must first define your ideal tech stack. Since there are quite a few providers for the most diverse areas, you should not underestimate the time required for this and plan sufficient buffer periods for the evaluation.

Microservices management

To ensure that your composable platform is always technically up-to-date, you need to keep a close eye on microservices and, if necessary, replace one solution with another if it is no longer supported and no longer receives updates.

Employee training

The more complex you make your platform, the more time your team will need to get up to speed and learn how to use each service on a daily basis.

The best way to overcome each of these challenges is to assign employees to work on specific topics and assign responsibilities. For example, assign one person to compare and select your components, and another to train your team.

Composable commerce in B2B retail

Advantages of composable commerce for B2B retailers

• Flexibility and adaptability: Composable Commerce enables B2B merchants to tailor their e-commerce solution to their specific requirements. They can select and combine individual modules and microservices to create a solution that is precisely tailored to their needs.

• Scalability: The modular structure of Composable Commerce allows B2B merchants to easily scale their e-commerce platform to keep pace with the growth of their business. New features and services can be seamlessly integrated to meet changing requirements.

• Innovation potential: Composable Commerce enables B2B merchants to respond quickly to new technologies and trends. They can introduce new features and services without having to rebuild their entire e-commerce infrastructure, making it easier to stay innovative and stand out from the competition.

Challenges of composable commerce for B2B retailers

• Complexity of integration: Integrating different modules and microservices into a unified e-commerce solution can be complex and often requires technical expertise. B2B merchants need to ensure that all components can interact seamlessly with each other and exchange data effectively.

• Management of microservices: Managing a variety of microservices can be challenging as they are separate systems that need to be operated and updated independently. B2B merchants need to ensure they have the right tools and processes in place to manage and maintain the microservices efficiently.

• Security and compliance: Using composable commerce can present security and compliance challenges, as different modules may have different security standards and regulations. B2B merchants need to ensure that all components of their e-commerce solution comply with applicable security and privacy regulations.

Composable Commerce with Shopify's Commerce Components

Shopify and Shopify Plus are already per se very well suited for building a composable online store thanks to the app store and the very simple connection of new systems. Often, no programming knowledge is needed to add new components. Most apps are offered with different pricing models and varying levels of functionality. We have already summarized our personal hit list of the best Shopify apps in a previous blog.

However, with the still relatively new Commerce Components, the Canadian provider has once again significantly expanded the customization options and offers an attractive model especially to large retailers who want to offer their customers an individual shopping experience. The Commerce Components are made up of 30 modular components that can be easily integrated into third-party systems via API. The components are assigned to one of the following categories:

• Storefront

• Shopping Cart & Checkout

• Core Commerce

• Data and Compliance

• Shipping & Logistics

• Omnichannel

How many and which components you choose is up to you.

Composable Commerce Example: These Latori Customers Use the Composable Approach

Lensit.no

Latori customer Lensit.no uses the Composable approach in its checkout. The Norwegian subsidiary of the well-known online retailer for eyewear, Mister Spex, sells contact lenses and accessories. Lensit uses Shopify's frontend, as well as its customer database and API interfaces, as the basis for its e-commerce presence. The checkout, on the other hand, is implemented entirely via Klarna.

We spoke with Ulrich Tietze, Head of Product Enterprise Application, about the project. You can find the complete Lensit case study in our blog.

Sennheiser

Sennheiser also decided to use the Composable principle. The well-known manufacturer of headphones and soundbars relies on headless commerce. This allows the company to use a headless front end and still benefit from the Shopify Plus advantages. With other integrated micro-services, such as Oracle JD Edwards as the ERP system, Sennheiser is a good example of Composable Commerce.

We discussed the entire project in an interview with Armin Djafari Naini and Niclas Backes, Global Platform Owner eCommerce at Sonova. You can read the whole Sennheiser Case Study on the blog.

Composable Commerce vs. Headless Commerce

The biggest difference between Composable Commerce and Headless Commerce is flexibility and modularity. Unlike Headless Commerce, where the frontend and backend run separately, Composable Commerce goes one step further and relies on the principle of a fully modular architecture.

So the main difference between Headless Commerce and Composable Commerce is the focus. Headless Commerce focuses on the separation of the frontend and backend, while Composable Commerce focuses on the modular composition of specialized services to create a customized e-commerce system.

One thing is important to note, however: The two concepts are not mutually exclusive, but are often used together to create flexible and scalable e-commerce solutions.

As Germany's first Shopify Plus agency, Latori has had the privilege of helping many international companies switch to Shopify or build a functional webshop with the system. As an official Shopify Plus Expert, we have first-hand knowledge to advise you on your e-commerce strategy and build a future-proof tech stack. In a no-obligation get-to-know-you meeting, we evaluate the possibilities for your project together. Get in touch with us!

Conclusion

Due to its flexibility, composable commerce already determines what happens in e-commerce today - a (store) system is often selected on the basis of its integration options. Although evaluation, management, and training of employees in the use of individual system components are efforts that should not be underestimated, the advantages of vendor diversity and flexibility far outweigh these hurdles.

With thousands of apps, Shopify and Shopify Plus are undoubtedly among the most adaptable systems. With the Commerce Components, however, Shopify opens up completely new scope for its merchants and completes the idea of the composable architecture.