How composable commerce makes it realistic to compete with Amazon

With its international market share decreasing, it’s never been a better time for other retailers to compete with Amazon. The key to doing so lies in deploying composable commerce, believes e-commerce expert Alexander Graf, Co-Founder & Co-CEO of e-marketplace experts Spryker.


This is a contributed article by Alexander Graf Co-Founder & Co-CEO of Spryker.

Amazon has long been a word to send shudders down the spine of leadership teams in global retailers and commerce firms. How can they be expected to compete with that limitless inventory, highly competitive pricing, next day delivery and overall customer experience?

But while no one would argue that Amazon is down to its last few pennies, it is showing signs of weakness that it hasn’t done in decades. To take advantage of this, retailers need to be agile, and their commerce platform must be rich in the kind of features that allow for high degrees of personalisation. The answer to achieving all this lies with composable commerce.

Amazon vulnerability

Amazon’s most recent financial figures (February 2022) indicate a commerce vulnerability that hasn't been there for a long time. Its overall fourth-quarter sales in 2021 grew just 9.4%, the first period of single-digit growth since 2001.

Even these relatively modest numbers were primarily attributable to the success of AWS, Prime, and Amazon advertising, the latter of which Amazon published financial figures for the first time. When one focuses solely on Amazon retail, the numbers are even less impressive. North America saw growth of just 9.3% from Q4 2020 to Q4 2021, while internationally, there was actually a decrease of 0.5%.

For retailers and the tech teams responsible for powering their commerce platforms, the online giant's less-than-impressive recent numbers mean there is an opportunity to claim back market share that many thought had been lost for good.

The role of composable commerce

The term ‘composable commerce’ was first coined by Gartner in 2020. The idea behind it is that businesses must go down a modular route to commerce. This involves selecting the best-of-breed solutions in order to ‘compose’ a highly customised tech stack.

In simple terms, composable commerce is all about giving businesses or commerce teams the freedom to select vendors that offer the commerce solutions required for their specific business requirements.

That sounds sensible, but many retailers are still stuck with monolithic ERP environments, which are inflexible and unsuited to modern commerce. While the pace of digital transformation has increased sharply since the pandemic, it is still not fast enough for many organisations.

Composable commerce and legacy systems are like comparing Lego to a toy car. With the latter, you can play with it as delivered, but with Lego, you can build your own toy if you understand how to connect the bricks, then you can make what you want. If you can't connect the bricks or don't know what to build, then Lego will not help you.

Personalisation and commerce success

The importance of personalisation to commerce success has been well-documented. It's worth reiterating this now, though, with the window of opportunity brought about by Amazon’s current challenges.

To compete effectively against the might of Amazon, organisations require extreme personalisation. This includes the rolling out of new features, interacting with customers via their preferred medium and giving out bespoke prices or offers unique to the customer. This simply cannot be done with an old and antiquated system.

Adopting a composable approach means that applications should be seamlessly integrable and built on open standards. Customers want unique experiences, and the only way to deliver them is by being flexible enough to adopt the modern technologies that drive innovation. 

As customers demand more functionalities on commerce platforms or across various touchpoints, businesses need to be agile in responding to the ever-changing business environment. Composable commerce creates the room for this flexibility that an out-of-the-box solution will be unable to deliver. 

The future is composable

In today’s world, this best-of-breed principle is far more relevant and appealing than off-the-shelf bundles, which compel businesses to use redundant or outdated technology. Customers have become more sophisticated in how they utilise various IoT devices and touchpoints. The ability to select the right vendors makes for a more efficient user experience for those customers. 

Cost efficiency and control are other major benefits of taking a composable approach. Being able to pick and choose what capabilities and vendors are most relevant for a business could help cut down unnecessary costs. Furthermore, vendor lock-in can easily be avoided when there is the freedom to replace components as needed.

This all points to a future of commerce based entirely around composable commerce. With consumers accessing online stores from multiple channels, refusing to embrace an omnichannel strategy will leave an organisation with missed sales opportunities. Personalised commerce experiences capture customer attention and ultimately increase loyalty. 

Gartner has predicted that by 2023, organisations that have adopted a composable approach will outpace the competition by 80% in the speed of new feature implementation. Can any commerce firm or retailer even hope to take advantage of Amazon’s current vulnerability without such an approach?

Alexander Graf is Co-Founder & Co-CEO of Berlin-based marketplace experts Spryker and author of the bestselling book, The E-Commerce Book.