Composable commerce for B2B - what is it and what benefits can you gain from this technology?
Composable commerce, in essence, enables more adaptable digital commerce and content platforms and has swept into B2C brands and retailers in recent years. Many of the up-and-coming vendors and consultants involved are espoused to the four MACH principles underlying these new platforms — Microservices, API-first, Cloud Native or Cloud-based SaaS, and Headless Commerce.
The time is ripe to bring composable commerce architecture to the B2B sector. It's high time we do away with monolithic commerce platforms and take a bold step into using a composable commerce platform.
At WebriQ, we believe that composable commerce for B2B is ready to make the move to MACH technologies and operating models, and some of the challenges the next wave of adopters may face along the way. Many businesses selling to other businesses are encountering the same rise in digital channels and customer sophistication that consumer-facing businesses have already encountered, coupled with pressure from boards to adapt and optimize operations in the face of changing conditions.
Business pressures and time-to-market pressures are fueling demand for more adaptable technologies and seamless account management solutions, particularly where that investment can be shown to preserve or grow revenues. Especially in this economy, the focus is closer to the revenue, and that is commerce. We are seeing that shift, where the areas that are not necessarily closest to how the company makes money is going to take a bit of a back seat.
At the same time, MACH technologies and vendors have now reached a level of maturity where they can provide solutions to these needs. There are limitless commerce possibilities out there to get to know and take advantage of.
Headless commerce and composable commerce architecture allow wholesalers, distributors, and product manufacturers to future-proof their business and stand out successfully in rapidly changing market dynamics. Due to the decoupled nature of headless commerce, one can display and manage an entire product catalog online without having to worry too much about the seamless operations between the front end and back end of a site.
By implementing modern commerce architectures based on composable and headless technologies, business owners can boost their digital commerce strategy to a whole new level. With composable commerce solutions, B2B enterprises can become more agile and can provide more cohesive commerce offerings to their clients. They can enable commerce experiences that are more apt to today's market while firmly safeguarding their future amidst continuously shifting customer preferences.
There are challenges, however, to using a composable commerce platform for these B2B businesses that their peers in the B2C segment have either already overcome, or in many cases have not had to deal with.
In the B2B sector, the journey to digital commerce has been slower and typically the systems and commerce functionality currently in place are either still first- or at best second-generation.
If you look at most of the B2C companies out there, they're probably on their third journey from a commerce perspective. They did something, then they moved to one of the big monoliths, and now they're trying to move to modern and next-generation digital commerce architecture. As for B2B companies, they may be on their first journey or maybe they're at the second at this point.
In addition, the sector is often less up-to-speed on the latest e-commerce technology and may find it harder to attract developers with the right skills. Providing highly differentiated commerce experiences and implementing an updated digital strategy then becomes a challenge. In B2B, in particular, there is an enormous deficit in understanding just the reality of the marketplace, the ever-changing set of customer expectations, and the pace at which things are evolving. Also, the ability to attract talent is a huge deficit, which negatively impacts the delivery of service to current and prospective customers.
Nevertheless, the pace of transformation and investment in digital technology is becoming significant. Some early adopters of composable commerce for B2B are starting to reap the benefits. There are now an increasing number of success stories, and substantial operating cost reductions in these B2B transformations, so it does feel like the momentum is growing. The pressure in the economy really accelerates that.
One challenge that consumer brands have not faced is the potential conflict between new digital channels and existing sales and distribution channels.
A B2B supplier can't simply open up a new direct-to-consumer platform without carefully thinking through what its role will be. The same goes for any composable commerce solution - one must understand what it is best for in order to maximize its potential and gain the best results.
Don't try to just sell products through a new channel, because then it becomes a margin play and you start to disrupt and cannibalize the other revenue stream of your partners, your retail networks. Don't do it. Figure out digital services that work best for your packaged business capabilities instead.
Make sure that your approach is focused on loyalty generation, equity, relationship building, and first-party data. What do you actually want to do with this consumer relationship? If the answer is, 'Sell products,' then don't do it, because it has no ground to stand on.
Composable commerce leverages a big advantage of the MACH approach - it makes it possible for companies to start with a small project, see the impact, and quickly make iterative course corrections before scaling out more widely.
Companies don't necessarily know yet what is the right model for them. How do they differentiate and not compete with their existing business model and partners? What they're really looking for, and this is where MACH is so perfect, is the ability to quickly spin up, spin down, to create these e-commerce experiences, and once they figure out the model, then just repeat — being able to test quickly, and then once they find the right fit, being able to scale relatively quickly.
Another challenge is launching ecommerce initiatives that need to build new digital capabilities around existing legacy systems that were not designed for rapid change. Here, the composable ethos of MACH lowers the barrier to entry by making it possible to add those new capabilities without first doing a risky rip-and-replace of the existing platform.
You can start in smaller chunks — you eat that elephant one bite at a time. This is precisely what we see enterprises with substantial industry-leading experience do. They will decide what is the differentiating part of their business, or what is the most strategic part of their business, and start there. This is what MACH allows you to do, and you can start getting ahead without such a big risk.
There are many functions that have been added to ERP systems over the years that don't perform well there and are good candidates for MACH replacements. Things that have nothing to do with resource planning, things that just ended there because five or ten years ago, they had no other place to put it. It was the mainframe, it was the glue of the organization.
Start to take some of the capabilities out of it, the capabilities where you need to innovate. Product information is a prime example of being a foundational capability behind innovation in B2B. Order management, payment, and other complex business requirements - if you start to bolt these onto your ERP, you will be slow. You need to start to augment each one and put it into a differentiating layer. Start to augment your process with microservices, the best-of-breed composable commerce technologies, start to decouple it, and you'll start to see magic.
Besides the technology, another challenge is adjusting to new business models and partnerships as well as leveraging new business benefits.
Digital connection makes it possible to go beyond the traditional product-based relationship and create an ongoing relationship, often wrapping services around the product, focused on helping the end customer achieve better outcomes.
It's not just about products, it's about services. It's about creating that ecosystem with their partners so that they can own the client relationship. It's not just a hand-off to someone else now. We're working with a large tire manufacturer, and the entire way they're developing their marketplaces around fleet services and components from that perspective. You don't just come and buy your truck tires, you have a long-term relationship with that company.
Here again, the composable MACH architecture and the whole composable commerce approach can help, making it easier to connect to partners who can supply capabilities that the manufacturer itself may not have access to, such as the ability to break out single stock items and ship them directly to customers, or to add ongoing maintenance and call-out services.
The openness of the architecture and the composable commerce experience also means that you don't need to do it all. Partnerships play a major role. You start to federate some of those capabilities out to potential partners in the space, just out-delegate distribution, logistics, to a person or a company that is specialized in that.
So it's not just the technology you compose, it's also your operating model, where you start to identify the weaknesses you have, that you're not willing to maybe in-source or invest in, immediately. But you start to also compose even the partnership ecosystem that you work with, to make sure that you solve it without needing to change the entirety of your company in order to enable it in the first place.
Helping companies adjust to these new ways of working and doing business is just as important as helping them to understand the underlying technology model, and this market education is a big part of what the MACH Alliance sees as its role. For companies assessing their readiness to move forward with a project, these cultural elements have as much weight as the technology.
MACH needs to counter the messaging from more traditional monolithic platform vendors, who are starting to expose APIs and claiming to offer composability but without the same openness and flexibility of a pure-play MACH solution.
Explaining how MACH differs from other composable approaches is an important task moving forward. All MACH solutions are composable, all composable solutions aren't MACH." You could go further and say that having a mix of microservices, APIs, SaaS, and headless capabilities isn't always MACH. How the components and the whole digital journey are put together is crucial and needs to be better explained to differentiate MACH solutions from the competition.
So far, it has been relatively easy for the Alliance to spread its message because these differences are relatively well understood in the B2C commerce and content space, where concepts such as the Jamstack web development architecture pattern have blazed a trail for MACH principles.
A strong cohort of vendors and consultancies has grown up with a strong understanding of the model. Moving into B2B commerce will expand MACH's reach beyond this friendly territory into a landscape where other approaches remain deeply ensconced. We see far more vendors already taking MACH seriously in fields such as supply and demand planning, distribution, warehousing, logistics, and the various other operational disciplines that typically feature strongly in a B2B trading scenario.
Extracting and managing data in a more fluid way that's better compatible with a MACH architecture is also to our mind an as-yet unsolved problem.
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