Composable commerce: can it save traditional retailers?
5 April 2023
In recent years, the gap in digital maturity between pure players (shops that solely operate online) and traditional retailers (that have a webshop and one or more brick-and-mortar shops) has grown. However, there is a solution for traditional retailers to close the gap. And that solution is composable commerce.
What is composable commerce?
In composable commerce, several independent – and best-of-breed – software components are combined to build custom (shop) applications. Such custom applications are often referred to as Packaged Business Capabilities (PBCs).
The software components in PBCs each perform a specific task and can be further adapted and combined to create new functionalities or modify existing ones. This allows retailers to respond flexibly to changing market conditions and launch new products and services quickly.
Why are traditional retailers lagging behind digitally?
In other words, composable commerce makes the lives of retailers a lot easier. For this reason, the concept has become the new standard for e-commerce applications in just a few years’ time.
But then why is it that many traditional retailers are still lagging behind digitally? Why do they cling to their monolithic and rigid systems?
Overinvesting & bad implementations
You would think that traditional retailers had caught up to the pure players in recent years (partly because of the boost that e-commerce received during the Covid pandemic). But nothing could be further from the truth.
Pure players, such as Amazon and Zalando, generally have a strong digital and technological foundation. This allows them to easily adapt to the (constantly) changing e-commerce landscape whenever they need to.
Traditional retailers, however, often still lack the necessary digital and technological foundation. They do invest in their online presence and try to adapt to the changing needs of their customers and target audience, but their approach usually isn’t the right one.
For example, traditional retailers often overinvest in new technologies and innovations that are implemented too abruptly and then subsequently put off just as quickly.
A conservative and stubborn mindset
A second reason why traditional retailers often lag behind is the fact that the segment isn’t too fond of major digital and technological changes.
Indeed, in traditional retail, there is often a mentality that inhibits innovation and change. That mentality is fuelled by several things, including:
a lack of pressure on the current business model
The post-COVID-19-rise of physical shop visits
The reluctance to adapt and evolve leads to slow digitalisation and makes it difficult to implement structural changes efficiently.
Another reason why traditional retailers still lag behind is that their systems and processes often aren’t flexible enough.
Many IT managers within the segment still believe and invest in monolithic and centralised solutions, such as enterprise resource planning (ERP)and point-of-sale (POS) packages with integrated e-commerce features. However, these packages don’t allow for quick changes and adjustments, nor are they best-in-class for every step of the business process or customer journey.
A suboptimal client approach
A final reason why traditional retailers still lag behind digitally is that they often approach their clients in a sub-optimal way.
They focus more on the expectations of their customers rather than on their actual behaviour, which actually provides way better insights when analysed. By collecting and analysing data through tools such as a customer data platform (CDP), retailers can better understand their customers and optimise their digital initiatives.
Yet many traditional retailers struggle to implement and optimise these initiatives, as it requires them to have the necessary (digital) adaptability and a clear digital roadmap. Two elements that they often lack.
Composable Commerce: Hype or Here To Stay?
What should you take into account when considering composable commerce? Composable commerce is not a silver bullet. It is a philosophy and evolution that you need to integrate into your business the right way. And that's exactly what this whitepaper can help you with.
Will composable commerce force a growth spurt?
Taking all inhibiting factors into account, composable commerce is the ideal solution for traditional retailers to catch up to the pure players. Composable commerce can give retailers the necessary digital setup and agility to break free from their old systems.
However, the overall transition to composable commerce will not happen overnight. Many retailers have only just managed to catch up in terms of traditional commerce. The transition to true omnichannel/composable commerce first requires thorough preparation before it can be made.
Tom Van MierloStrategy Director
Senior digital strategist and partner at iO, Tom Van Mierlo's professional journey started more than 15 years ago at Intracto. Expanding his enthusiasm and experience since Intracto reshaped into iO at the end of 2021. Skilled in business development and growth, he specialises in turning strategic challenges into detailed digital plans to grow your business. An avid trendwatcher, but more importantly a trend implementor.
Accelerate your digital growth with iO
Goodbye multi-year development cycles. Goodbye “rebuilds” based on time-consuming and up-front analyses full of assumptions. By continuously testing and refining digital strategies, we embrace constant change and improvement, both internally and for our clients.
Curious to know how composable commerce can help your business? Feel free to contact us for more information. We’re happy to tell you all about the possibilities and help you with an implementation.