Sennheiser is a major manufacturer of electronic consumer products for more than 70 years. However, their ecommerce sites that are highly-trafficked aren’t designed in the way you’d expect. In actual fact, they were unable to create the kind of e-commerce experience they desired using a traditional platform. They are instead part of a growing trend to abandon the old monolith and adopt an approach that is composable to commerce.
In Netlify’s latest Headless Commerce Summit, I discussed the key decisions which are driving companies such as Sennheiser to adopt a composable architecture. The use case for e-commerce is among the fastest-growing segments we’re witnessing at Netlify. Below are some of the industry trends that we’re observing across our customer base.
Digital Commerce is Exploding; Ecommerce Web Monoliths Just Can’t Keep Up
In the last couple of years, the growth of e-commerce has been by 10 times the rate of the previous decade. But, remember that it was already a rapidly growing segment. There remains a multi-trillion-dollar opportunity, with 81% of commerce still served by non-digital channels. It’s not just the sales volume that is increasing. As ecommerce grew and new sales channels have developed, new marketplaces emerged and the market became saturated with competition. Commerce teams who want to differentiate, increase revenues, and safeguard margins realized that their internet monoliths could not keep up with the pace due to the following reasons:
It is slow to adapt and expand to new channels and markets.
It is difficult to distinguish
Slow for customers
It is expensive to maintain and update
The composable commerce stack arose from the Remains Of the Monolith’s
Failures
There’s a huge shift in the way we design commerce solutions. In particular, we’re seeing a massive shift towards composable commerce. According MACH Alliance research, 79 percent of the tech leaders surveyed would like to incorporate more composable elements within their infrastructure over the next twelve months.
But what exactly is composable business? And what exactly is an initial monolith? Let’s start with some definitions:
Monolithic commerce. Monolithic commerce is when one provider takes a variety of functions typically none of it top-of-the-line, and combines it into a single solution. For instance the monolithic solution for commerce comes from Adobe (Magento), HCL, Salesforce, SAP, or Shopify typically includes details about the product, images of the product prices, price, payment functions and search capabilities the management of customers, analytical features and elements for the front end (such like mega-menus) but with very limited and unwieldy flexibility to customize. The problem is that if you need to modify one aspect it is necessary to alter every single one of them. This can take years and you’ve already invested millions of dollars, so why not.
Headless commerce. Headless commerce allows you to create a separate frontend, Web Experience Layer as well as the backend that is monolithic. The benefit is that it allows you to swiftly improve the frontend experience, without affecting the backend. The drawbacks arise when teams attempt to integrate particular components that meet business needs. Certain monolithic commerce backends are prone to make it difficult or even impossible.
Composable commerce. When retailers have embraced headless systems for managing content that are optimized for stand-alone searches, and APIs that are specialized for product reviews and Product Information (PIM) personalization, and many more, we’ve begun discussing composable commerce. Composable commerce is where the functionality in the backend and frontend can be plugged in, scaleable as well as replaceable. It is also able to be continually improved by agile development.
The Composable Commerce Tech Landscape Is mature
At Netlify We’ve witnessed firsthand how the category of commerce is rapidly changing. The positive is that there’s more choice than ever before. However, the downside is that understanding the options can quickly become confusing, with ever more headless commerce tools being introduced to market every year.
To help you talk to, visualize and even design for our composable marketplace into three main components:
Storefronts. Storefronts is the component of your solution for commerce that users see as well as interacts. The web-based experience layer, or frontend. It is usually built by using an JS framework, and an orchestration platform such as Netlify and in a few instances an exclusive storefront service for your backend of commerce is also added. The alternatives here include MACH solutions such as Vue Storefront, Commercetools Frontend (formerly Frontastic) and Nacelle. They can be utilized as part of a complete modular commerce solution, however they are often used on the top or on top of monolithic systems. They differ in the degree of no-code is their code, versus yes-code and it is a fast expanding market.
Product Experience. There are several categories that make up the experience Content management (i.e. Contentful, Contentstack. Amplience and Storyblok) and stand-alone search (i.e. Algolia) Digital asset management (DAM) (i.e., Cloudinary) as well as Product Information Management (PIM) (i.e., Akeneo, Bluestone) tooling and services that focus on personalization (i.e. uniform, Dynamic Yield), and finally, evaluations (i.e., Yotpo).
The transactional layer. The transactional layer consists of price management, order management (i.e., Commerce Layer) as well as payments (i.e. the Adyen or Stripe) along with checkout options (i.e., Snipcart).
Many of these services are available in more comprehensive solutions, such as the headless options of Commercetools along with BigCommerce.
In the realm of the internet and software there is a constant development, and then – every 10 years or so we experience more drastic shifts. I think this shift towards MACH as well as the Jamstack is one such shift and we’re witnessing digital leaders lead this shift since composable commerce can:
More times to go on the market.
One of the major benefits of committing to MACH is that it allows your team to launch features 10 times quicker. When I talk of CMOs’ top most pressing issue is the time to launch. This isn’t surprising. The massive monoliths that include the commerce platform templates, glue engines, template engines and build tools, customer information personalization, programming framework and infrastructure are unmanageable and incomprehensible. In the end, the single-minded approach to commerce stifles the speed of iteration. I had a conversation with the marketing team of one the biggest corporations worldwide. They’d spent millions on a single platform which caused them to have a painful period between when they had something in place to launch and getting it put into place of the equivalent of 32 days. 32 days!
Cost reduction.
It’s costly to continue operating in the same way. One quarter of IT decision-makers reported spending more than 50% the IT budget for updates for their old systems. On average, businesses spend nearly two-fifths their budget for these updates. A CMO informed me recently that his single tech vendor offered him “everything I’ll ever need, and nothing I don’t.” The advantage of a composable method is that you purchase or construct only what you require and a single module won’t require the expense of purchasing everything else.
Omnichannel experiences.
Traditional monoliths make it difficult to support all channels that customers are using in the present. Every single place where we exchange data should be accessible via an API. Teams need to decouple the various layer of presentation from their backend in order to provide the best experience for every channel. catering to the omnichannel consumer is becoming a huge concern for retailers since omnichannel shoppers spend more. Target states that they host 40 million shoppers shopping through channels. Omnichannel customers spend more than customers in-store only. Albertsons revealed that households who are omnichannel have three times the spending of only in-store shoppers, and that their omnichannel households increased by almost five times over the past two years. Macy’s claims that even in a crowded mall environment, the omnichannel client spends 2.5x or 3.5x greater than the typical single-channel user. It’s safe to declare that embracing omnichannel as a strategy is the only way to go for retailers. The only way to make it happen is to break away from monoliths.
Differentiation.
One of the biggest issues for commerce experiences built on monoliths is the fact that there aren’t the same opportunities to create an experience that is as memorable and unique like you would in an actual store. This means that hundreds of stores that are similar to yours are just a click away. Perhaps the most compelling reason for switching to a composable marketplace is what it’s not. It’s not a web presence. The templating engine is not involved or build systems, glue codes or runtime. These pieces, as well as the decisions that go into them remain completely within your control, allowing you to adapt the technology you use on your website to that of your own team and other projects. With a stack of commerce that is composable that you can build, you’re not bound to specific designs or checkout procedures, and are able to tailor your customer experience according to the exact requirements of your customers.
Faster web experiences.
Managers of e-commerce understand the importance each millisecond. A study of analytics on customer behavior across thirty million sessions revealed that a speed of 100ms provides retailers with an 8.4 percent increase in conversions. Due to the versatility of APIs without head teams can make use of the Jamstack approach to web development to build and improve web assets ahead of time and then deliver these to nodes across the world. With edge functions, the prebuilt pages load content onto the screen faster than monoliths due to the fact that they can eliminate the latency that comes with traveling roundtrip back to their origin in a different nation in which the pages need to be put together before being served. You will know that you’re browsing an un-headless Jamstack website because it is extremely quick and page changes are immediate.
Web apps that are more secure.
The majority of malware that is automated is targeted at traditional monoliths since the process of building is always operating and is exposed. Through separating between the web and the backend, and applying the most efficient practices of Jamstack teams, they remove the biggest of attack is available to you. At Netlify we receive many thousands of inquiries per month that begin with “WP admin” This is malware calling your door, saying “Hey do you have an unreliable WordPress installation that hasn’t changed for one or two weeks?” A compositable architecture based on the most effective practices of Jamstack allows commerce-focused web solutions to go from being secured by design (at most) to being secured by default.
Scale.
Massive traffic on monoliths strains the web infrastructure as every request must be built dynamically each time. There are ways to cache and automated scaling of virtual servers. However, this quickly gets complicated. With the composable commerce model built on Jamstack web platform, websites have multiple sources of access and don’t have to follow the same building cycle for every request. If your site is featured listed on the top of The New York Times, you don’t require a huge and expensive server infrastructure to handle the increase in traffic.
Retention of employees is increased.
The best developers are highly sought-after and are looking to use modern tools. I talked to the chief architect of one of the most renowned consumer goods companies that is fast-moving in the past and he revealed the fact that they lose a development team member to the midst of churning every week due to their old stack of software that utilized outdated programming languages, tools and developer environments that were extremely inefficient.
