Zohar Gilad is cofounder and CEO of Fast Simon.
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Composable commerce lures merchants with its promise to build without limitations and do it 80% faster than competitors. Leaders in the space have made M&M’s an example of what can be created with composable solutions. But if you double-click on the main attraction of the M&M’s site—the ability to personalize candy with unique colors, text and images—it’s actually made possible by a custom software application. So, before merchants ditch their hosted e-commerce platforms for composable commerce, they must ask themselves if they have what it takes to make the shift.
Composable Commerce Vs. Hosted Platforms
As one example of a hosted e-commerce platform, our partner Shopify has helped merchants build more than 1 million online stores as of January 2023 and made the direct-to-consumer model mainstream. Much of this success can be attributed to the fact that theme-based stores just seem to work. Anyone can set one up, maintain it and use it to grow their e-commerce business without a team of developers. Hosted platforms typically have a plethora of integrations available in their app stores that afford a level of design and technical personalization.
However, these customizations aren’t limitless—they can’t create truly unique experiences or integrate with tech that’s not supported by the platform. But although composable commerce addresses these challenges, it comes with its own costs and concerns. The greatest of these is that they're development platforms that require a staff of full-stack and backend developers. Meeting tech industry standards for hiring, managing and paying developers in a highly competitive market is a big lift for most merchants, especially if they’ve never run a technical organization before.
Merchants considering a composable solution should determine if it aligns with their business priorities, budget and stage of growth.
Business Priorities
Composable commerce allows developers to assemble various components to create a custom site with the latest technologies and innovations and upgrade them as new services become available. It’s reasonable for businesses that value creating a unique online experience above all else—and have the time and resources to do so—to consider this approach. However, if a company’s main priority is to get in front of online customers quickly, a hosted platform might be their best bet.
Budget
Composable commerce costs vary based on the selected components and integrations, but the biggest expense is typically the staff of developers required to build and maintain the site. Conversely, hosted e-commerce platforms are subscription-based and generally considered affordable, making them a good choice for cost-conscious merchants or those just launching their online business.
Merchants should do a cost-benefit analysis to understand if the upfront and ongoing investment into composable commerce makes sense for their business at its current stage or if a hosted platform is a better choice.
Stage Of Growth
For brands like M&M’s, a member of the well-established Mars family, the ability to customize the e-commerce experience can mean the difference between market leadership and extinction. Companies that have outgrown their monolithic or hosted e-commerce solutions and have the resources available to build their site using composable commerce should consider it.
Although many of these companies exist—and fuel much of the economy—the reality is that most e-commerce retailers aren’t operating at M&M’s scale. Although the ability to customize and stand out is attractive to merchants at all stages, most hosted platforms provide everything an early or mid-stage company needs to be successful at a fraction of the cost.
Creating Unique Customer Experiences
Whether a company chooses a composable or hosted platform, there are many ways to create beautiful, unique and performant online experiences. Features that would have previously required a custom application, like smart collections and visual discovery, can now be added to a hosted site by integrating shopping optimization technology. This technology also lets sites segment experiences by audience and surface personalized recommendations for shoppers, making the gap between composable and hosted experiences smaller.
It remains to be seen whether Gartner is right about the need for composable commerce, but they definitely have one thing right: Consumers want unique online experiences. Modern technology allows merchants to do that with the click of a button or the combination of composable building blocks.
