How composable commerce helps improve customer loyalty and retention

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Adaptability and customer-centricity are the cornerstones of a successful eCommerce strategy in today’s rapidly evolving digital landscape. Businesses that swiftly respond to changing customer preferences and market dynamics poise themselves for long-term success. The emergence of composable commerce has offered a solution that meets this requirement and revolutionizes how companies approach eCommerce. Composable commerce enables organizations to select the best-of-breed solutions for each aspect of their eCommerce operations, such as product catalog, checkout, payment, inventory, and marketing. In addition, it also allows enterprises to integrate these solutions with their existing systems and data sources, creating a unified and holistic commerce platform.

Retail eCommerce sales worldwide are estimated to reach $8.1 trillion by 2026 – a motivation to prioritize customer satisfaction and experience. By adopting composable commerce, businesses can gain more agility and flexibility to create personalized, high-performance eCommerce experiences that resonate with their customers. They can also respond faster to changing customer needs and market trends, delivering innovation and value at every touchpoint.

Let us explore a few ways in which composability in commerce leads to improved customer loyalty and retention –

1. Personalization and customer experience

One of the most compelling aspects of composable commerce is that it enables enterprises to tailor their eCommerce experiences to each customer’s preferences, behaviors, and needs. Imagine a scenario where an online clothing retailer can recommend outfits based on a customer’s past purchases, style preferences, and even the weather forecast for their location. This level of personalization enhances the shopping experience and makes customers feel valued and understood. Consequently, customers are more likely to return to a platform that caters to their specific needs, thus boosting loyalty and retention.

By using modular components and APIs, businesses can develop dynamic and interactive user interfaces to offering provide relevant content, offers, and promotions to for each customer. For example, companies can use features such as product recommendations, dynamic pricing, content management, and loyalty programs to enhance the customer journey and increase conversions. They can also leverage data from various sources, such as CRM, analytics, and social media, to gain deeper insights into their customers’ profiles, journeys, and feedback. This customer data can be utilized to recommend products, offer personalized discounts, and provide a smooth checkout process.

2. Improved innovation

Composable commerce allows organizations to innovate faster and more efficiently, as they can experiment with new features, functionalities, and integrations without disrupting their existing eCommerce systems. In a traditional eCommerce setup, introducing innovations often requires extensive modifications to the monolithic system, which is time-consuming and costly. On the other hand, composable commerce allows businesses to add or replace modules easily, fostering a culture of continuous innovation.

For instance, a traditional eCommerce platform may find introducing the latest payment methods within its setup challenging, impacting the checkout process. In contrast, a composable commerce system can seamlessly integrate with it, providing customers a smoother and more convenient shopping experience. With the potential to expeditiously incorporate new technologies and services, organizations can enhance their offerings continuously. In addition, by enabling microservices and APIs, companies can decouple their eCommerce architecture into independent units that can be updated or replaced. This reduces the risk of technical debt, vendor lock-in, and legacy issues that hamper innovation in traditional eCommerce platforms.

3. Omnichannel commerce

Customers today expect a consistent and integrated shopping journey across various touchpoints, from websites and mobile apps to social media and physical stores. Composable commerce enables organizations to unify these channels, ensuring customers can browse, purchase, and interact with the brand seamlessly, regardless of their chosen platform. By using modular elements that can be effortlessly embedded within various systems and platforms, businesses can ensure that their eCommerce offerings are compatible with different browsers, operating systems, screen sizes, and resolutions. Moreover, companies can leverage components such as inventory management, order management, payment processing, shipping, and returns to streamline their backend operations and ensure smooth fulfillment across channels.

Consider a scenario where a customer browses a product on their mobile device, adds it to their cart, and chooses to complete the purchase in a physical store – with composable commerce, the transition is smooth. Inventory data is synchronized in real-time, ensuring the desired product is available in-store, thus facilitating a seamless customer purchase experience. Such convenience and consistency enhance customer experiences, regardless of the mode of shopping chosen.

4. Data-driven insights

Composable commerce empowers businesses to leverage data-driven insights to optimize their eCommerce strategies and improve customer satisfaction. A data-driven approach increases sales and strengthens customer loyalty, as customers appreciate the personalized offers that align with their shopping habits. For example, an online grocery store can use data analytics to identify which products customers frequently purchase together. Utilizing this data, the store can create tailored promotions and bundles that appeal to customers’ preferences.

By using microservices and APIs, companies can collect and analyze data from various sources, such as transactions, interactions, and feedback, creating a rich and comprehensive data set. Using modular components that can be smoothly integrated with various analytics tools and dashboards, businesses can collect, process, and visualize data from different sources and channels. This can help organizations gain a holistic view of their eCommerce performance, identify patterns and trends, measure KPIs, and generate actionable insights. Enterprises can also use advanced tools such as artificial intelligence (AI), machine learning (ML), and natural language processing (NLP) to process and interpret the data, creating actionable insights.

5. Better scope to experiment

Businesses that can adapt to changing market conditions and consumer expectations are more likely to thrive, and composable commerce provides the perfect environment for experimentation for futuristic ideas. Traditional monolithic eCommerce platforms often require extensive development efforts to implement minor modifications. In contrast, businesses can easily introduce new features, optimize existing ones, and test different approaches in a composable commerce ecosystem. By using modular components that follow industry standards and best practices, companies can combine different components from various vendors or build their own as per their requirements. This gives enterprises the freedom and flexibility to create eCommerce experiences that suit their brand identity, vision, and goals. Also, organizations can create and deploy new features or functionalities in their systems swiftly without affecting the existing ones.

For example, an eCommerce company can A/B test different product page layouts, promotional banners, or checkout processes to determine what resonates best with their audience. With composable commerce, these experiments can be conducted without disrupting the entire eCommerce platform. This ability to experiment and iterate rapidly drives innovation and helps businesses discover what works best for their customers, ultimately leading to improved customer retention.

Enable a strategic approach to sustainable growth

In a digital world where customer expectations constantly evolve, organizations prioritizing customer experience and adapting to changing preferences will emerge as winners in the eCommerce market. According to a report, nearly 90% of customers stated that the customer experience provided by a company matters as much as its products or services. This means businesses must deliver individualized customer experiences across every interaction point and channel in the customer journey. Adopting a composable commerce approach can help achieve this goal.

Additionally, enabling composable commerce as a strategy rather than a technical solution will empower enterprises to future-proof their eCommerce capabilities and achieve sustainable growth. The global eC-commerce market is set to grow at a CAGR of 14.7% from 2020 to 2027 and is forecasted to generate a revenue of around $27.15 trillion by 2027. In such a scenario, composable commerce can be a powerful tool that enables companies to remain innovative and secure success in a dynamic eCommerce ecosystem. Thus, by putting the customer at the center and leveraging the power of modularity and flexibility, businesses can build enduring customer relationships and drive organizational growth.

Rajneesh Kumar
Rajneesh Kumar is Director, Marketing at Pimcore GmbH. He is developing the marketing plans. Operationally he is responsible for the marketing program and driving business outcomes. He builds data-driven decision-making frameworks – customer segmentation, Go to Market strategy, targeting, cross-sell/up–sell. Pimcore is an open-source platform for product information management (PIM/MDM), digital asset management (DAM), content management system (CMS), and eCommerce.

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