Retail Enterprise CTOs understand that customer experience is everything and that a positive customer experience is based on quick access to information and convenience—from browsing to buying to receiving merchandise—no matter where, when, or how shopping occurs. In other words, it’s all about injecting flexibility into a dynamic business and IT environment to fulfill the customer’s changing needs.
According to Gartner, in order to achieve the flexibility to adapt and pivot in response to market and customer shifts, an IT infrastructure must be composable with modular, adjustable, autonomous components. This is the essence of the latest retail advancement, composable commerce, which combines existing technology assets with critical new technologies, empowering your technical and business teams to literally “compose” brand-specific experiences. Rather than being locked into a vendor-controlled solution, composable commerce opens the door for retailers to align best-of-breed products, cloud services and vendors to create solutions uniquely tailored to their specific needs.
As the need to rapidly evolve and deliver new store experiences continues to increase, composability empowers retailers with the control and agility to recognize market needs and rapidly deliver targeted business solutions. Learn how composable commerce redefines the in-store shopping experience and addresses current challenges by positioning retailers to capitalize on future retail trends.
Challenges Facing Brick-and-Mortar Stores
Although brick-and-mortar stores far outpace eCommerce sales, the dynamic retail landscape poses ongoing competitive challenges that test the store’s relevance. The growth of eCommerce stores and increasing access to the internet are giving shoppers more options than ever—all from the comfort of their homes and the convenience of mobile devices. As a result, eCommerce sales are expected to reach 22% of all global retail sales by 2024.
The rise of eCommerce, while still a fraction of store volume, has bolstered customer expectations about a seamless and personal shopping experience that transcends their entire journey with a brand—online and in-store. In addition, shoppers want convenient purchase, payment, and fulfillment options, and in order to stay relevant, retailers must be agile in developing and delivering experiences that not only keep pace with competition but also with IT innovation and unpredictable events that prompt changes in shopping behaviors.
What's more, brick-and-mortar stores face higher (and rising) overhead costs, pressuring them to improve efficiencies in resource and inventory management and omnichannel fulfillment. So, how can these retailers stay competitive and thrive?
Advantages of Composable Commerce for In-Store Shopping Experiences
Speed + Agility
For retailers who want to enhance in-store shopping, composable commerce is the most agile approach for quickly curating unique customer experiences that deliver convenient options. A perfect example of how composable commerce powers agility is the large-scale grocery chain Kroger. Combining it with their unified commerce platform, the company’s teams delivered new experiences that responded to changing customers’ shopping preferences with speed, efficiency, and a high level of autonomy. From October 2019 to March 2021, Kroger expanded pickup and delivery services as the pandemic paralyzed some retailers who were at the mercy of their legacy technology infrastructure.
With direct access to a point-of-sale (POS) transaction engine, Kroger no longer was forced to rely on a software vendor to extend its buy online pickup in store (BOPIS) experience and could enhance it by offering Online Pay, Pay at Curb, and Kroger Home Delivery from its Ocado warehouses. The company’s customer-centric strategy reduced dependence on legacy fixed lanes and achieved a 98% retention rate with its new level of customer engagement driven by reduced customer wait times and empowered associates. In the face of competition that delivers groceries to the customer’s doorstep, Kroger is a step ahead by offering customers multiple fulfillment options based on convenience in the moment.
This example reveals the critical role of composable commerce in empowering retail teams with control vs. relying on a proprietary software vendor’s timetable that can significantly slow or entirely impede progress. Walmart and Target also use composable commerce to rapidly respond to competitive threats from online pure plays like Amazon by creating new in-store experiences that respond to rapid shifts in customer preferences.
After identifying new solution sets, teams can use in-store headless commerce technology to integrate existing assets, greatly streamlining the development of new customer experiences. Once the domain of e-commerce providers, next-generation POS providers have brought headless commerce to the store, often the retailer’s most active and lucrative sales channel, where approximately 75% of global retail sales still occur. By uncoupling front-end experience from back-end transaction processing, headless gives retailers the ability to transform POS by:
- Injecting more agile technologies into their existing in-store tech stack, enabling them to add new features while leveraging legacy assets.
- Allowing an incremental digital transformation journey vs. a high-risk, rip-and-replace expenditure.
- Providing retailers data and insights from all channels instantly across engagement points.
- Empowering retailers with full control of in-store experiences without vendor dependency.
Customer Experiences that Drive Loyalty
Customer loyalty portends retail success, and the key to retaining customer affinity is the ability to deliver an experience that meets their needs at any given point during the shopping journey. Composable commerce underpins this effort by offering the fastest way to deliver solutions for every component of a POS experience, such as:
- Browsing to Purchase—Shoppers want to know if and where products they want are available and how soon they can get them. Composable commerce ties product availability to updated inventory across the retailer’s network of stores and distribution centers to offer shoppers the fastest fulfillment options, such as pickup at a specific location or ship to home or store for pickup (BOPIS, Buy Online Pick up/Pay at Curb). In addition, retail associates who have access to unified inventory information enhance customer engagement by providing “at-the-moment” service.
- Checkout—As self-payment in the store continues to become preferred by a majority of shoppers, composable commerce makes it easy to create this time-saving use case as well as mobile checkout, using components from an existing POS system (Self-Checkout, Mobile Checkout).
- Payment method—Offering customers various payment options allows them to choose the one that’s best for them at any given time, such as credit or store charge card, cash, ApplePay, GooglePay, etc. By integrating existing payment solution assets, composable commerce enables retailers to quickly add new options to their payment use case without having to recreate each use case from scratch.
These examples demonstrate that a composable commerce environment is critical for agility in quickly curating personalized POS experiences that meet ever-changing customer needs. Working within a cloud-native infrastructure, composable commerce enables retail teams to create unified commerce solutions that immediately scale to enhance omnichannel fulfillment, inventory management, associate performance, marketing, merchandising, and loyalty program management to improve profitability as well as customer retention.
Future of Composable Commerce and Omnichannel Fulfillment
A streamlined omnichannel shopping experience has never been more critical for the survival of retail organizations. With customers shopping in store, on computers and mobile devices, retailers must bridge shopping journeys that navigate between online and in-store with experiences. In fact, over half of shoppers today buy online and pick up in person. However, when inventory fluctuations limit this opportunity, customers want to know immediately how soon they can get their purchases and by what means.
To provide them this vital omnichannel fulfillment information, in-store and online sales channels must be connected with customer, inventory, and supply chain intelligence through a unified transaction engine. Each of these related functions generates valuable data and channels it to other connected systems, serving as the foundation of a truly unified system that supports information sharing across the retailer’s entire network for a seamless, multi-channel experience that optimizes omnichannel fulfillment.
With composable commerce, retail teams can build this same information into experiences that merge online and store worlds. For instance, a customer making an online purchase wants to see which local outlets have the items available for immediate pickup (at curb or in the store) to decide if waiting for delivery is a more preferable option.
Behind the scene, the system checks stock at all stores and identifies the one closest to the customer with availability and how long delivery from a remote store or distribution center would take. When the customer chooses the preferred fulfillment option and completes the purchase, the system automatically updates the affected inventory. This is a win/win:
- The customer chooses the most convenient fulfillment option.
- The retailer meets the customer’s expectations to strengthen loyalty.
- The process optimizes efficient omnichannel fulfillment and inventory management.
Composable commerce prepares retail organizations for the future by enabling teams to update omnichannel fulfillment with additional options such as incorporating new pickup locations, communicating arrival at curbside for pickup, reducing wait times, and enabling upsell.
Composable commerce is the future of unified commerce, infusing digital engagement into store experiences and vice versa, improving omnichannel fulfillment, empowering associates to serve customers better, and creating a more personalized experience—all of which strengthen brand affinity. With this technology strategy, retailers efficiently adapt to changing customer preferences and behaviors, giving customers the experiences they want exactly when expected.
If you’re ready to see it in action, request a demo and learn how your organization can become more efficient while serving customers the way they want to be served.
Read more about how composable and unified commerce work together to future-proof your organization’s efficiency and success.