The commerce industry is at an inflection point. Shoppers and buyers of all types expect better digital experiences and flexibility to engage with brands across multiple channels, while new channels for digital sales are emerging rapidly. Technology advances in areas of AI-driven search, merchandizing and personalization, digital payment, fulfillment, and supply chain are here and quickly growing.
Brands require interoperability and composability from their digital technology to help them to keep up. The time is now to ensure your technology can enable your strategy, explore new channels, and enable your move to a modern commerce architecture. Increased site traffic, conversion rates, average order value, and improved customer loyalty are just some of the rewards. And we are here to help.
Modern commerce is composable commerce. By breaking down monolithic commerce platforms into digital technology components, your business gains the flexibility to add, replace, or remove key components today and in the future. Composable commerce enables you to realize your vision of improving your customer experience on your terms, letting you focus on optimizing your commerce business, not limiting it.
The good news for companies who have investments in legacy commerce platforms and want to move to a modern, composable architecture is that you don’t need to rip and replace your platform to get started. There are options. Here are a few ways to get started:
1. Improve personalization and CX on your current sites
Personalization is a priority for companies that lead with customer experience, and for good reason. In a recent article, McKinsey cited a survey that found companies that excel at personalization generate 40% more revenue from those activities, compared to “average” players. They found that consumers want brands to demonstrate they know them on a personal, human level. By making the online experience as easy to navigate as in-store, sellers can “meet customers where they are”, creating a more organic and natural customer-centric environment in which to provide relevant product and service recommendations.
Modular AI-driven search and merchandizing can also be added to existing commerce sites to quickly identify shoppers' intent, provide personalized recommendations, and help them find what they are looking for more quickly. Artificial Intelligence also provides merchandizers with rich product discovery tooling and analytics. Sitecore Discover has helped leading B2C and B2B sites improve conversions and increase site revenue all on top of their existing commerce platform.
While powerful, personalization in product search is just the beginning. Customer centricity is key to all next-generation commerce approaches and forms the basis for successful strategies. Sitecore’s Customer Data Platform (CDP) helps you to unify all customer data that is scattered throughout your organization, allowing you to analyze and harmonize this data into an actionable asset. According to Gartner, personalization engines empower “marketing professionals to identify, set up, conduct and measure the optimum experience for an individual based on knowledge about them, their intent, and context.”
2. Identify your needs
Before considering how to approach composable architecture, we’ve found that brands build a cross-functional team of digital strategists, merchandizers, marketeers, engineers, and data architects to answer some of these important questions:
- What’s the best way to remove variability in operations and costs?
- Which existing tools do we need to integrate versus replace?
- Which new areas will drive the most topline growth on existing investments?
- Are there specific differentiators in our commerce strategy that are needed?
With a composable architecture, your teams have the ability to identify and evaluate multiple components (e.g. order management, promotions, content, payment, fulfillment, search and merchandising) that mirror your business operations of today, but also as your business evolves and differentiates your customer experience into the future.
The concept of composable can be boiled down into four key principles, known as MACH:
- Microservices – individual and independent pieces of business functionality
- API-first – functionality exposed through APIs, making it easier to integrate multiple apps and services
- Cloud-native SaaS – service-driven software that leverages the full capabilities and benefits of the cloud
- Headless – A decoupling of front-end and back-end systems, allowing for complete freedom on any channel
When it comes to headless commerce platforms, it’s important to note that the lines between B2B and B2C marketplaces are blurring. If you take out the specific profile of the seller and the buyers, the underlying data models, business processes, and functions of traditional B2B and marketplace platforms are becoming common across all selling channels. For example, multi-supplier management of marketplaces is increasingly needed in both B2B and B2C sites as companies extend their catalogs with an “endless aisle” approach. Support for approvals, promotions, spend management, accounts with distinct catalogs and pricing – all expected in B2B sites – is also becoming common in B2C sites and marketplaces of all types for known and loyal customers.
MACH is a universal trend when it comes to the modernization of business-critical platforms into a component-based ecosystem, as it provides a number of benefits over “traditional”, monolithic platforms that don’t offer the flexibility of composable architecture. While this framework is a good guide for software developers, it’s important to note that it’s still only one of many drivers to consider when looking at a replatform investment. The following “three C’s” are designed to offer additional direction when considering commerce technology investments that are scalable and future-proof:
Customization – ensuring your commerce platform can be configured to cater for the segmentation requirements of your various customer personas across B2C and B2B.
Consistency – ensuring you can scale experiences and remain consistent alongside your broader digital transformation requirements.
Control – ensuring your platform remains manageable and capable of enabling supply, allocating, pricing, licensing control, and fulfilment orchestration across your supply chain.
You can learn more about “the three C’s” and how they can help you evaluate your commerce decisions in this article.
When evaluating modern headless commerce, it’s important to consider how the blurring lines of commerce segmentation may play out for your company in the future. Sitecore OrderCloud is the only headless, API-first commerce platform that was built from the ground up for complex B2B and marketplace needs, which also provides an extremely flexible domain model to fit the most complex scenarios to future-proof your investment.
3. Conduct a proof of concept
For organizations currently running on a monolithic commerce platform, a move to composable architecture may be a paradigm shift in how they plan for and roll out new commerce solutions. Through experience, we’ve found that companies who conduct a “proof of concept” that addresses important advanced use cases can tease out perceived issues in the technology earlier, increasing the comfort level of the team with this innovative technology and composable approach.
To help you build your proof of concept, below you’ll find a list of considerations and questions related to your commerce back-end requirements. Consider whether each of these features is required now, or if there will be a need in the future:
Buyer organization structure:
- Segmentation of buyers/account
- Sales or franchisee management
- Organizational alignment with existing CRM solutions
- Separation of products by catalogs or custom visibility rules based on buyer or user
- Any enrichment efforts based on market or channel
- Product variability and configuration (print, manufacturing)
- Pricing variability per buyer or group
- Markup management relative to cost and source systems
- Promotional pricing
- Pricing requirements related to product variations
- Where and how is inventory managed?
- Is inventory reserved or allocated to different buyers?
- Are backorders allowed for products?
Shipping and fulfillment:
- Existing relationships with shipping accounts (e.g. UPS, FedEx, DHL)
- Considerations relative to buyer geographies
- Outside of shipping, any other types of fulfillment, such as in-store pickup
- Current supplier fulfillment integrations
- Total suppliers, future goals of supplier onboarding
- What information suppliers are responsible for providing
- Relationship of suppliers relative to different buyers
- Supplier financials in how they are paid, relative to goods and service fees
Payment and accounting:
- How do customers pay for goods today (currencies and methods)?
- Payment processors used
- Are there separate systems for financials that need to be managed?
- Markup or fees relative goods that need to be categorized
- Applicable tax codes for the business and its customers
- PCI - how to implement payments
- PII/GDPR - personal information
- HIPAA - medical information
- SOC2 - security requirements
- ADA - Usability requirements
At Sitecore, we welcome the opportunity to work with your team to set up a proof of concept to address your most complex commerce architecture needs. You can start learning about OrderCloud’s API and flexible domain model today at www.ordercloud.io.
We’re also excited to show you how you can add AI-driven product discovery and merchandizing to your existing solution.
Lisa Tanner is a Product Marketing Manager of Commerce Cloud at Sitecore. Connect with her on LinkedIn.