Mix, match, delight: How retailers can wow customers with composable commerce

Insights

• Businesses need to deliver personalized, future-ready digital experiences to engage customers and build lasting loyalty.
• By leveraging flexible, best-of-breed components that they can pick and choose, companies can swiftly adapt to market shifts and consumer expectations, integrating new technologies and optimizing performance.
• The composable commerce approach can help drive faster innovation and precise solutions across all touchpoints, ensuring long-term value.

With global e-commerce revenue set to reach nearly $6 trillion by 2029, retailers face challenges with price wars and the need to keep ahead of the competition. Consumers now expect seamless, personalized experiences across all touchpoints, with 80% globally accustomed to such interactions and considering them as the norm. The onus is on retailers to ensure high customer satisfaction levels.

However, the traditional monolithic commerce systems that once served retailers well are now a barrier to innovation. Composable commerce, where businesses can choose software components from different vendors to build a tailored technology stack, means that retailers can avoid being locked into a single technology partner to build an architecture focused on competitive advantage and delivering the best possible customer experiences. These services could include online storefronts, AI-powered search, personalized experiences, shopping cart, payment gateways, checkout processes, and customer relationship management.

Technology crossroads

Consumer behavior has permanently shifted, with expectations for omnichannel experiences, personalization, and convenience at all-time highs. This is driven by increasing reliance on digital channels during the pandemic, high standards in service delivery set by online marketplaces, and the rise of social commerce. Retailers operating on legacy platforms find themselves at a disadvantage: Their monolithic commerce systems were built for a different era — one with predictable customer journeys and clear channel distinctions. These systems typically offer limited flexibility to adapt to changing market conditions, slow deployment cycles for new features and capabilities, difficult integration with emerging technologies, expensive and time-consuming upgrades, and challenges in delivering personalized experiences. Retailers can't easily experiment or iterate quickly, which is essential in today’s fast-changing market.

Composable commerce offers a different approach. By embracing modular architecture principles through microservices, API-first, cloud-native, and headless (MACH) technologies, retailers can build commerce experiences that evolve alongside consumer expectations. This approach gives retailers the agility they need now while creating the foundation for future innovation.

The implementation challenge

Adopting composable commerce isn't without challenges. Many retailers struggle with the complexity of transitioning from monolithic platforms to a more flexible architecture.

While application programming interfaces (APIs) facilitate connections between different services, creating a cohesive ecosystem of solutions that work seamlessly together requires considerable expertise. Each component must be carefully selected and integrated, with attention to data flow, security, and performance. The technical complexity can overwhelm teams accustomed to all-in-one solutions. Managing multiple microservices effectively can also be difficult without a well-defined strategy in place.

Implementing composable commerce can mean considerable initial investment for retailers. Beyond licensing multiple solutions, retailers must factor in integration costs and potential replatforming expenses. Having a wide range of microservices to choose from can be confusing for retailers if they don’t put in the effort to analyze which one will serve their needs best or which ones will be compatible with each other.

Research shows that 34% of brands faced challenges with composable commerce implementation because they lacked the talent with the required technical expertise.

Benefits of composable commerce

Crossing the hurdles related to implementation of composable commerce can reveal several substantial and transformative benefits for retailers.

Flexibility and customization: Composable commerce means retailers can switch tools or services easily without being dependent on a single company’s platform. They can also make changes to their core system without overhauling their systems or disrupting business.

Speed to market, scalability, and performance: The plug-and-play nature of composable commerce allows retailers to choose prebuilt, specialized components, and connect them through APIs rather than build from scratch. Speed of integration — which is connecting several systems, applications and API-driven microservices to each other — can help save time and improve speed to market. It lets different teams work simultaneously on separate components as opposed to sequentially, helping streamline the process and save time.

Infosys worked with a Nordic food and health retailer to modernize its legacy systems by introducing microservices, cloud hosting, and an agile operating model. The legacy systems were posing issues such as lack of flexibility to integrate new features and slow development. To address this, the business was divided into autonomous, self-sufficient, interoperable microservices, for example, checkout, inventory, product recommendation, and promotional message management. As microservices can be tested and deployed independently without affecting the entire system, retailers can integrate new features quickly without causing disruptions in the whole system. For the client, this has resulted in faster time to market regarding food and health product launches. It also helped keep customers informed about promotions, campaigns, and product launches regularly.

Fashion retailer Burberry deployed composable commerce and a headless content management system in particular to help its marketing and communications team increase the speed of publishing landing pages across global websites in multiple languages.

Cost efficiency: The capabilities gained from a modular tech stack from using prebuilt components or using pre-validated components from specialized vendors can reduce development hours and associated costs for retailers. Lululemon customers faced issues entering information during checkout. The system was rejecting the information they were typing in, was unable to validate information, and was sending the users error messages. This led to customers failing to complete a purchase and giving up on the site. By leveraging an AI-powered composable commerce platform, the brand was able to pinpoint and address these friction points systematically, ultimately recovering tens of millions of dollars in potential revenue.

Infosys Equinox helped a women’s apparel retailer move off its legacy e commerce monolithic platform to MACH X architecture — combining MACH principles with built in extensibility — to deliver richer omnichannel experiences with consistent product-related content, inventory, and promotions across in-store and e-commerce channels, and leaner operations. It also helped with omnichannel fulfillment such as buy online, pick up in store (BOPIS), ship-to-store, and ship-from-store. By adopting the MACH X solution, they slashed total cost of ownership by 30% and gained the agility to keep evolving their digital presence and omnichannel capabilities.

Enhanced customer experience: Modular architecture means retailers can offer more individual experiences such as tailored product recommendations based on browsing history, purchase patterns, and preferences, and customize content delivery across devices and channels. They can also create dynamic pricing strategies for different customer segments and develop personalized loyalty programs on the lines of time-sensitive rewards, tier-based benefits, or gamified engagement. These can be adapted to individual customer behaviors such as purchase frequency, time spent on browsing, and preferred product categories.

Charting the path forward

Successfully implementing and maintaining a composable commerce architecture demands specialized skills. From API development to microservices management, it requires a range of technical expertise unlike what's needed to manage traditional e-commerce platforms.

Composable commerce affects multiple departments and requires changes to established workflows, governance models, and decision-making processes. Having proper organizational readiness and change management is essential, as without it, even technically sound implementations can fail to deliver expected value.

Retailers can navigate the transition to composable commerce by adopting well thought-out strategies and best practices such as embracing a phased approach, prioritizing partnerships, investing in team development, and establishing strong governance.

Recommendations for success

As consumer expectations continue to evolve and new commerce channels emerge, the flexibility and adaptability of composable architecture will become increasingly valuable. Retailers looking to thrive in this environment should consider the following practices:

Enable MACH principles early: Businesses should build modular components that can be deployed independently, and ensure all systems can talk to each other cleanly via APIs. They should use scalable, resilient cloud infrastructure, and split the front end from the back end so they can easily tweak designs and channels. They should also allocate resources to API management and integration by implementing a solid API gateway or orchestration layer, to connect services smoothly, and ensuring consistent data flow across systems for a unified user experience.

Focus on experience differentiation: Brands need to identify areas where personalization and customer experience can drive competitive advantage for them, guided by insights from competitor analysis, and then focus on building a tech stack that helps meet those business goals.

Conduct capability assessment: Organizations need to understand their composable commerce readiness and orchestrate factors that enable successful implementation. It includes building a cross-functional team that can collaborate closely. Cloud environments that support auto scaling and failover are a must. A solid vendor ecosystem management system with quick and easy access to best of breed component providers is another factor.

Clear governance frameworks: Defined roles, responsibilities, and decision-making processes helps manage the increased complexity. Since composable commerce is built on a network of independent microservices often managed by different teams, it's critical to establish a standardized governance framework. This ensures all teams across the entire ecosystem clearly understand their roles and responsibilities and can work in a coordinated and collaborative manner.

Integrate sales and technology leaders: Along with emphasis on tech, digital commerce requires the strategic vision that business leaders bring to the table. Infosys digital commerce research has shown that chief revenue officers and chief sales officers achieve stronger digital commerce results, and these executives are 15% more likely than chief technology officers to propel their companies into the top performance tier for key business outcomes.

The retail organizations that embrace composable commerce today will be best positioned to adapt to tomorrow's opportunities. By building flexible, future-proof technology foundations, retailers can continuously evolve their customer experiences, rapidly deploy innovations, and respond to market changes with agility.