Chapter 1: Introduction & Methodology
Much has happened since July 2020, when Elastic Path spearheaded the Composable Commerce movement, Gartner published industry leading research, and the term, Composable Commerce, began to be used more broadly and seemed to take on a life of its own. We wanted to take a step back and examine the topic of Composable Commerce from all angles, one year in. What do people know (or not) about it? How widespread is its adoption? What does the decision-making process look like for practitioners? What perceived benefits of the approach have proven out?
To shed light on these questions, we partnered with Ignite Research to design and administer an online survey to respondents who:
- Work for a company that sells through digital channels
- Have some level of familiarity with the commerce solutions used in their company
- Are a decision maker, influencer, or user of eCommerce solutions in their organization
The survey was conducted from May 5 - June 21, 2021 and had 416 respondents, with 298 completing the full survey. Objectives included:
- Measure current perceptions of Composable Commerce
- Prioritize the benefits being realized by those employing Composable Commerce
- Evaluate current functionality, and explore how Composable Commerce functionality will need to evolve to better meet the needs of the marketplace
- Understand the role of Composable Commerce over the next one to five years
Chapter 2: Defining Composable Commerce
We wanted to first understand: What proportion of respondents know about Composable Commerce, and what do they know?
Practitioners are familiar with Composable Commerce.
When asked if they are familiar with the phrase Composable Commerce, 79% indicated awareness —an encouraging indicator of the term’s traction.
They are also aware of what comprises it. When asked how they would describe Composable Commerce to someone unfamiliar with the term, respondents leaned into words and phrases such as “best solutions,” “modern” and “bringing various components together.” The comprehension of Composable Commerce was further validated when more than half (56%) of those aware of the phrase believe it includes pre-built solutions, integrations and reference libraries.
Pre-built solutions enable practitioners to embrace a Composable Commerce approach faster, without the risk and complexity of piecing together MACH-based technology. While only 52% of respondents believe Composable Commerce includes a modular architecture, it is a key tenet of the approach, supporting a more agile delivery, faster time to market and improved customer experiences. Open Ecosystem is another tenet of Composable Commerce, which enables interoperability between best-of-breed commerce components. Interestingly, only 32% selected “best-of-breed” versus the 41% selected Open Ecosystem. These two choices are connected and we would expect to see more similar percentages. And we weren’t surprised to see Single Vendor selected the least, that is not an aspect of Composable Commerce.
What is Composable Commerce? Respondents weigh in:
“Composable Commerce is about using the best technology regardless of vendor rather than relying on one vendor for a one-size fits all solution.”
“The modern approach by which eCommerce teams are empowered to select and assemble various best of breed commerce solutions.”
“Being able to create my own strategies rather than trying to fit or adapt to a generic or out of the box one.”
“Instead of using a one-size-fits-all [approach], Composable Commerce leverages modern technologies to adapt to an ever changing market.”
Chapter 3: This vs. That: Comparing Composable Commerce/MACH
Comparisons are inevitable in a rapidly changing marketplace. Since Elastic Path pioneered the headless commerce space in 2011, new terminology has come along to create muddier waters. We wanted to know whether respondents had a clear sightline on the boundaries between headless, MACH, and Composable Commerce.
Practitioners see MACH for what it is: an acronym. Over 40% of respondents recognize that MACH is only an acronym subsuming four disparate underlying technologies—rather than an entity unto itself.
Composable Commerce is seen as more than the sum of its parts. Nearly seven out of ten (68%) of practitioners believe that Composable Commerce is more than underlying technology. More than half (56%) of those aware of Composable Commerce believe it includes pre-built solutions, integrations and reference libraries, and 52% believe it includes modular architecture.
As demonstrated in the figure to the left, headless Commerce is part of MACH and MACH is part of Composable Commerce. Let’s take a look at the definitions. Headless Commerce is the decoupling of the customer facing front-end from the commerce functions and business logic in the back-end system. MACH is a marketing acronym for four commerce technologies: Microservices, APIs, Cloud native and Headless.
Composable Commerce is an approach that enables business and tech teams to bring their brands unique digital vision to life by launching and continuously optimizing digital commerce experiences that leverage multiple best-of-breed vendors composed together into a complete, business ready solution. Composable Commerce leverages modern technology (including MACH) and layers on support to compose and optimize your unique commerce solution.
Talk With an Expert on How to Make Headless Come to Life
Elastic Path is a Visionary in Headless Commerce by Gartner. Talk to an eCommerce Expert here at Elastic Path and see how we can help craft your Headless Commerce strategy.
Chapter 4: Pace of Adoption
Establishing that Composable Commerce is generally well understood and gaining in mindshare is one thing. Is adoption following suit?
Awareness of Composable Commerce has spurred action—and adoption. More than half of those aware of Composable Commerce (58%) are currently employing a Composable Commerce approach. And it has a favorable approval rating among all respondents, regardless of implementation status: 95% of those aware of Composable Commerce believe it’s the way of the future, and 71% agree that the approach is beneficial to both technology and business teams.
Of those not currently using Composable Commerce, 62% are researching the approach, and 29% are evaluating options for their organizations. What’s keeping them on the fence? “Other priorities” are holding nearly a quarter (22%) of respondents back from implementation, while 16% mention the costs associated with implementing Composable Commerce solutions. The perceived concern around cost of implementing a Composable Commerce solution is unvalidated with more than 80% of respondents who have implemented a Composable Commerce approach anticipating a lower total cost of ownership over the next 3 years. Learn more about the total cost of ownership in the next chapter.
Chapter 5: The Elements of Evaluation
How do eCommerce operators think about their current and future eCommerce solutions? Depends who you ask. Keeping pace with change is a key challenge. We wanted to first understand the state of eCommerce overall—what do operators see as their greatest challenges? Across respondents, adjusting to market and consumer needs quickly was reported as a top pain point for a plurality (37%) of operators. Integrating with other tools (36%) and the high total cost of ownership (35%) rounded out the top three concerns.
These concerns appear to align closely with the most important criteria respondents reported when considering a commerce solution: total cost of ownership (54%), followed by ease of use (51%) and security (44%). Notably, the three options around architecture were the least reported criterion, signaling that respondents are not married to a particular architecture.
Priorities shift with post-implementation perspective.Overall, those aware of Composable Commerce rate quick starts (28%) and complete solutions (28%) as the most important for eCommerce operators. Those answers shift, however, based on respondents’ Composable Commerce implementation status.
Among those who have implemented a Composable Commerce solution, quick starts and headless technology are the most important to eCommerce operators, while those who are aware but have not implemented the approach rate complete solutions as the most important. These data further suggest that once eCommerce operators implement a Composable Commerce solution, functional benefits including versatility and flexibility become more important than the “out-of-the-box” nature of the solution.
Cost benefits are anticipated—and expected to be significant. More than eight out of ten (82%) respondents who have implemented a Composable Commerce solution anticipate realizing a lower total cost of ownership over the next three years. And they’re expecting a significant impact on the bottom line, with nearly two-thirds (62%) of respondents who have implemented a Composable Commerce solution expecting a 25% savings over three years, and nearly one out of five (19%) expecting a 50% savings. In other words, cost was top-of-mind as respondents adopted Composable Commerce, and as far as they’re concerned, the upside is still ahead.
Chapter 6: Implementation: Putting Timing to the Test
For those still in the decision-making stage, reported barriers to entry include a belief that Composable Commerce is too complex (44%) and difficult to implement (31%). Do those perceptions hold water throughout the actual implementation, or are practitioners pleasantly surprised? The vast majority of Composable Commerce solutions are implemented within six months.
More than one third (39%) of those using a Composable Commerce solution report that it took less than 3 months to implement, while 35% report that it took less than 6 months, and 17% report that it took more than 6 months.
Core elements of implementation have some common denominators. Among those using a Composable Commerce approach, the most common tools included are content management (40%), order management (39%) and digital asset management (39%), personalization (34%) and search (32%). Notably, content, order and digital asset management were frequently integrated with traditional commerce solutions prior to their availability as part of Composable Commerce solutions.
Rapid implementation impacts future expectations. Once eCommerce practitioners have experienced a Composable Commerce implementation, they’re statistically more likely to say that adding a third-party technology to their commerce solution will take less than one month. This is a key finding given that “adjusting to market and consumer needs quickly” was reported across respondents as a top eCommerce pain point. So the ability to respond to those changing needs by adding new technologies in the future can be seen in that light as a strategic advantage of a Composable Commerce approach.
Chapter 7: Benefits of Composable Commerce: Perceived & Realized
With all of the noise around Composable Commerce, we wanted to understand: Does Composable Commerce deliver on its promises? And does it live up to perceived benefits among practitioners? Expectations align in responsiveness, cost of ownership. Among those who are aware of Composable Commerce but have not yet implemented the approach, 18% of respondents reported they believe its greatest benefit is adjusting to market and consumer needs quickly, while 13% rated its greatest benefit as a lower total cost of ownership.
Those expectations were validated by the majority of respondents who have implemented a Composable Commerce approach confirming that they’re able to quickly make improvements to their commerce experience. As explained in previous sections of this report, these post-implementation respondents also reported that adding a third-party technology will take less than a month, and that significant cost-of-ownership benefits would be conferred in the near future. Enhancements are realized across the solution. Once implemented, Composable Commerce confers ease-of-use benefits across the board, according to respondents. While nearly all tasks are easier, those who have implemented a Composable Commerce solution report that integrating with other tools (53%) and providing consistent user experience (52%) have the highest rates of being easier. Additionally, 50% of respondents indicate making changes on their own, creating highly differentiated digital experiences, and supporting multiple business models on one solution is easier.
Articulating the Benefits: Word-for-Word Answers.
When it comes to the benefits of an implemented Composable Commerce solution, respondents focused on improved efficiencies, improved cost structures and the ability to more easily manage necessary changes.
“[We’re] able to get to the market much faster and more efficiently.”
“Convenient and more efficient.”
“Increased productivity of staff.”
“Being able to manage more changes in-house.”
“It's so easy to use and saves me a lot of time and energy.”
“Streamlined order management and fulfillment by aggregating all orders into a single platform regardless of where or how they were sold.”
Chapter 8: What’s Next?
If there’s one thing our respondents agreed on almost uniformly, it’s that the future of commerce in the near-term—the next 2-5 years—is digital. “New methods will evolve that will digitize the processes that are considered not digitize-able today,” said one practitioner. To get there, respondents see the need for unprecedented levels of flexibility and customization—headless architecture, white-labeled design systems and multi-tenant, shared commerce on a highly secure platform in the cloud. “I see platforms becoming more customizable throughout the entire customer experience, but at the same time provide the robustness and scalability of an enterprise solution,” noted one respondent.
Perhaps that’s why nearly all (a full 95%) of our respondents agree that Composable Commerce is the approach that businesses should take, given that the majority of them have either implemented a solution or are well on their way—and they understand how Composable Commerce responds to both their current needs and future demands. Nearly three-quarters (73%) of those aware of Composable Commerce but not yet implemented are likely to believe that in five years, most—if not all—of companies will be on board.
The writing for Composable Commerce is clearly on the wall. Practitioners recognize the term, and those who have implemented it can vouch for its realized benefits, including streamlined implementation, flexibility, ease of use and anticipated cost savings. Full adoption will now depend on reaching decision-makers with data such as those gleaned from this survey, in order to overcome any remaining misperceptions that stand as final barriers to the realization of Composable Commerce’s strategic value.