Why the Future of E-Commerce Lies in Customized Software Solutions

In the current difficult economic climate, the customer experience becomes the most important success factor in e-commerce. Those who clearly set themselves apart from the competition here have a decisive advantage - even over the supposed top dog Amazon. For this, a flexible software architecture is needed. Our guest author Alexander Graf is therefore convinced: The next big trend in online retail is called Composable-Commerce. In his guest article, he gives you an insight.

Inflation, supply chain problems, war, looming recession: Poison for many industries - including e-commerce. If digital trade was still the big winner of the pandemic years, the wind has now changed. But despite the short- and medium-term difficulties: The trend towards online retailing remains. In the future, we will buy less and less on site and more and more via the internet. But where and how we do this - that is not yet decided. And that offers a huge chance.

The right time is now 

For years the consensus was that Amazon would gobble up one retail segment after another - but examples like, the music dealer Thomann prove that Amazon is by no means unbeatable. The top dog is faltering, Amazon's sales in the shipping business were even down in two of the last three quarters. For smaller competitors and niche players, this is the perfect opportunity to gain a decisive lead in this challenging market situation and to (re) conquer market shares that were thought to be lost forever. How? With tailor-made technical solutions.

Smaller e-commerce retailers simply have to be faster, more precise and more flexible. That means they need to have features that allow a high degree of personalization in their respective niches - because constantly changing consumption habits and competition make it necessary to create individual offers for customers. The major platforms have lost this degree of flexibility because they only enable the common denominator for many customers in many categories and no longer provide the best customer experience. After mobile commerce and social commerce, the next big thing in online retail is therefore: Composable Commerce.

Custom-made instead of off-the-rack 

The US analysis company Gartner coined the term. Composable means composable. Simply put, it's about seeking the most suitable solution available in the market for each sub-area of your own online shop - from product search to payment processing - and then creatively assembling these solutions like a Lego kit to form a highly individual technology stack. Not as a composition for eternity, but with the clear claim to be able to make targeted adjustments if necessary and to be able to exchange individual services. The days of the major suite providers (everything from one source) seem to be over. Hardly any company still wants to make itself dependent on a solution that wants to be everything simultaneously - payment, platform, logistics, search, customer service, etc.

The pace of digital transformation has accelerated rapidly with the pandemic. The selection in E-Commerce is greater than ever, prices are fiercely contested - this is what makes the customer experience the decisive differentiator. Consumers want tailored prices, tailored offers, excellent customer care and new features, while for B2B customers it is about individual adjustment of their orders, for example, as well as the opportunity to request offers and process orders via a large number of different interfaces. All of this requires software that is not rigid, but modular in design. However, many companies still work with monolithic ERP environments that are inflexible and therefore unsuitable for modern trade.

The advantages of Composable-Commerce 

In comparison, Composable-Commerce offers a number of advantages, for example:

• Greater flexibility: Customers demand more and more features on their preferred trading platforms and at the various contact points they use. Companies must be able to respond flexibly to trends, new developments and changed preferences. Composable commerce creates the space for this flexibility that a standard solution cannot provide.
• More cost efficiency and control: This is of central importance for every trading company. The focus on certain functions and providers can help reduce unnecessary costs, because this approach is generally cheaper than an often oversized standard solution. It also makes it much easier to avoid potentially costly commitment to a particular provider, as components can be exchanged as needed.
• Open standards: The composable approach means that applications should be seamlessly integrable and should be based on open standards. If innovation comes up in the market, it can be included in your own stack without major development time and cost.
• Custom-made offers: An essential part of personalization is the introduction of new features, interaction with customers via the channel they prefer and provision of custom prices or offers valid only for the respective customers. This is not possible with an old and outdated system and is especially important in the B2B sector where individual offer requests are common and are expected by customers.

The time of standard solutions is over. Anyone who wants to be future-proof in digital retail needs to stand out from the competition. Composable-Commerce makes this possible.