The global market for online retail is expected to grow to $6.54 trillion by 2022. The incredible growth of the digital marketplace over the past two decades has been enabled largely by monolith eCommerce solutions like Shopify and Magento. In providing a uniform standard for digital commerce, monolith infrastructure has created huge opportunities for enterprise, digitally native brands, and mom n’ pop shops alike. That’s why almost 50% of all online retail in the US is channeled through Shopify and Magento alone.
Digitally native brands achieving hundreds of millions in sales are the engine of the digital marketplace. Glossier, Casper, Away — the list of direct-to-consumer unicorns continues to grow, as does the strength of 2PM Inc’s annual DTC Power List. But brands on their way to achieving this profile—for whom best-in-class innovation is a mandate to maintain growth—are the most likely to encounter problems with an overreliance on monolithic architecture on the way to success.
Any executive stakeholder at a DNVB will be familiar with the growing laundry list of problems: impossibly slow speeds, a lack of customization, lagging roadmaps, limited internal support, endless testing, slow adaptation to new tech. Wading too deep into the add-on marketplace to fix these problems almost always means a labyrinthian code database riddled with points of failure, costly monthly subscriptions, and spiraling technical debt.
While this past era of eCommerce was defined by a rapidly expanding market, universal solutions, and a one-size-fits-all mentality, we’re now seeing an emerging demand for interoperable software that connects to a larger architecture. Today’s leading digital brands need similar traits from their commerce software: Extensible, composable, flexible, modular. Fittingly, today’s standout solutions envision products as a toolbox rather than a whole platform.
By now, you are no doubt familiar with headless architecture. Over the past few years, the tech has gone from buzzword to a standard of eCommerce digital transformations. Decoupling your brand’s front-end from the back-end offers markedly faster load times, ease of development, device interoperability, and an all-round improved user experience. Many brands, while maintaining the services of a monolith provider, have layered headless optimization on top. Perhaps even more importantly, headless is a harbinger of the modular eCommerce architecture required to emerge from the pack.
With headless architecture widely accepted as an essential implementation, it’s time for the next step in updating digital infrastructure. Now that forward-thinking brands are looking beyond the monolith, much of the conversation is focused on a binary: monolith vs microservices. But a number of standout digital commerce solutions providers are thinking differently — with a modular approach — and emerging as the best choice for next generation transformations.
Munich-based commercetools provides cloud commerce solutions and is establishing itself as a leader in next-gen modular infrastructure. After two years with a ‘Visionary’ categorization on Gartner’s annual Magic Quadrant report, commercetools has joined the likes of Salesforce and Adobe in the ‘Leader’ category. The Gartner nod is both a big cosign on commercetools ascending to an essential player in digital commerce, along with an acknowledgment of the central role of modular solutions in today’s landscape.
With over 200 clients — ranging from Audi, Bang and Olufsen — the commercetools proposition is based on modularity. The commercetools headless solution is available as a SaaS on Google Cloud or Amazon Web Services, and its suite of cloud-based microservices are offered a la carte as APIs that plug into your infrastructure. In addition to headless, commercetools offers 7 solutions: webshop, mobile, IoT, chatbots, marketplace, social commerce, and augmented reality. However, there is no commercetools storefront software, a component notable in its absence.
With commercetools integration, you add the APIs you need, delivered as-a-service, which all function independently, integrate, and update. This allows for an agile infrastructure, with significantly less clunk or bloat in the back-end. However, commercetools integration can be a heavy lift. It requires experienced client-side dev teams to integrate, manage, and deploy. That’s one of the main reasons why typical commercetools customers clock in at over $100 million in GMV annually—large, complex organizations with the resources and experience to connect the dots.
A ‘fully composable, headless commerce solution for digitally-driven brands,’ Elastic Path is a challenger to commercetools in both modular architecture and headless. Fittingly, it is noted as a standout Challenger in Gartner’s Magic Quadrant. With clients ranging from Tesla to Herschel to T-Mobile, Elastic Path’s multi-tenant platform offers products that can be delivered as SaaS, although the front-end server for its Elastic Path Commerce headless solution can be held on premise or in the cloud.
Elastic Path’s suite of products—which includes IoT, chatbots, and voice commerce—is delivered as APIs that customers can use to incrementally replace legacy solutions. As the trend to move from monolith toward microservices increases, this modular perspective and incremental application will be essential for brands with a high need for optimization, but little margin for error.
In early 2020, Elastic Path acquired standout digital commerce software outfit Moltin, not only expanding its services, but integrating Moltin’s flexibility, speed of deployment, and streamlined codebase architecture in creating bespoke user experiences. In particular, Moltin’s UX flow and inventory add depth to the Elastic Path offering.
Elastic Path presents a more manageable option for brands generating $50 million+ in GMV, because its API integration is simple—particularly compared to the heavy build required by commercetools. Elastic Path is one of the organizations most assertively advocating for a modular perspective to microservice application, and is noted as furthest ahead in actually implementing the more cutting edge integrations like IoT and voice commerce.
US-based Kibo offers cloud-based ‘unified commerce software,’ a robust arsenal of APIs that provide ‘futureproof’ utility and value across the digital spectrum for both B2C and B2B merchants. Its core commerce platform integrates with a deep bench of personalization tools and point of sale optimizations. Further, the Kibo order management software manages inventory, order routing, and servicing for domestic and international brands. All together, Kibo’s suite of pluggable products accommodates cutting edge solutions to many pain points where monolith architecture falls short. All Kibo products are built to integrate into headless solutions, and Kibo itself offers headless through its newly acquired digital experience platform Monetate.
Kibo’s offering is broad and vast, and their 1000-strong client list features established international brands like Adidas, Patagonia, and Subaru, established retail giants across the product spectrum for whom Kibo facilitated digital and direct-to-consumer transformations. However, the vast majority of Kibo clientele are B2C operations based in North America, and while it can count on leading brands as clients, most of its clientele is in the more modest end of its $50-$500 GMV range spectrum.
Kibo recently acquired two software outfits to bolster its offering: Certona for personalized search and recommendation algorithms, and Monetate for content personalization and testing. While they are both highly functional platforms respectively, it’s worth keeping an eye on how well they integrate into the wider Kibo suite. To achieve this, Kibo does consolidate its software in a white-label iteration of Tray.io’s automation platform and bundles much of its offerings under one SKU. That said Kibo is a major proponent of modular tech implementation. All of its individual microservice offerings can be plugged in or out depending on client needs.
One outfit not recognized in Gartner’s magic quadrants, but definitely on our radar as a player in modular architecture is Fabric. Based in Seattle, WA, the Fabric platform is the one of the newer propositions in digital commerce solutions providers, but its team features veterans of Google and Amazon, and that pedigree is evident in Fabric’s offerings.
Fabric offers a product line specifically designed to address common problems and roadblocks found on monolithic platforms. Its three highlight solution tracks accommodate going headless, scaling commerce, and incorporating microservices. In practice, this means four products. First is an Information Manager to scale and build out inventory, so you can increase SKUs and volume and handle imports, while managing it all in one place. Fabric’s Experience Platform Manager is a visual CMS, which is ideal for creating aesthetically appealing user experiences.
Fabric’s robust Offers solution is a one-stop dashboard for managing pricing, sales, orders, promotions, and updating SKUs. It’s OMS — Order Management System — simplifies inventory with a single-view dashboard, multi-party management, and insightful data analysis. In general, Fabric’s management interface is sleek and simple, and significantly better developed than the hack-like or clunky experiences offered by many monoliths and microservices alike.
The quartet of commercetools, Elastic Path, Kibo, and Fabric have established themselves as early leaders in the modular evolution of digital commerce. Of all the platforms discussed, commercetools is furthest along the path of iterating products and providing most of what a leading brand may need, but integrating its solutions requires a heavy build. What’s particularly notable is that regardless of whether your brand is generating $50 million or $500 million, you can compose the ideal eCommerce infrastructure for your needs by selecting the best offerings from each. One thing is clear: relying on one platform for all of your needs is demonstrably outmoded.
However, as we move from monolith to modular, it’s imperative to avoid solving for overreliance on one platform to overreliance on another. You don’t want to go from monolith to monolith. Further, It’s not just about optimizing one element or another of your infrastructure, it’s about an adoption of a modular strategy across your technology. If 2020 has shown commerce anything, it’s that market needs can change quickly, so having a nimble, dynamic infrastructure is an absolute. The most intrepid execs at up-and-coming brands should be looking at composing a modular architecture from best in class solutions providers, but with a keen eye on the weight any solutions add to overall architecture.