Daniela, before we dive in, could you please share a bit about your professional background and role as Executive Vice President of North America at VTEX?
Certainly! I am the Executive Vice President of North America at VTEX (NYSE: VTEX), leading sales, marketing and solution engineering,
My journey in enterprise digital commerce at VTEX has been incredibly fulfilling, allowing me to partner closely with our customers who happen to be some of the most recognized brands like Adidas, Hmart, Whirlpool, Miriade, and more, spanning diverse industries such as fashion, DIY, electronics, and home appliances. Through my role, I’ve been deeply involved in expanding VTEX’s business across regions like EMEA, Latin America and now North America.
Additionally, I am driven by a passion to contribute to the next generation of leaders, which is why I also served as a guest lecturer for MBA programs at reputable US universities like Northeastern University and the University of Louisville.
It seems like the term composability is increasingly being used in the context of B2B e-commerce. Can you elaborate on that and tell us what this means?
Absolutely. Composability, headless commerce, and microservices are fundamental concepts within the ecommerce tech ecosystem that greatly enhance digital flexibility and innovation. However, they can sometimes come across as buzzwords due to the ambiguity surrounding their meanings and differences.
I can shed some light on what each one means. Composability is the strategic approach that allows brands to adapt to shifts in digital trends by breaking down operational systems, such as IT infrastructure or software applications, into modular, interchangeable components. These building blocks are then combined in innovative ways to swiftly meet specific business needs. Headless Commerce untangles the frontend and backend of a website, allowing autonomous updates without user experience disturbances. In contrast, microservices embody a software architecture built upon small, independent processes communicating through standardized APIs, streamlining both maintenance and deployment processes.
In essence, these elements epitomize VTEX’s Pragmatic Composability. This allows for the seamless integrating of new tech or solutions that align with your business’s current state. It emphasizes adoption in a manner that’s suitable for your business at the moment, avoiding rushed or potentially ineffective major changes. This is particularly advantageous for B2B e-commerce as it meets the often intricate and dynamic needs of their corporate buyers. Now, B2B brands can seamlessly integrate new technologies or solutions that align with their sophisticated priorities while also ensuring streamlined workflows and operational efficiencies. However, a fully composable approach might not always be the right fit, which is why we showcase the flexibility in leveraging the other side of our IDC ‘Leader’ enterprise commerce platform, which is our robust out-of-the-box capabilities for B2B companies. This includes Customer Credit, B2B Organizations and others.
What are the benefits of a composable architecture for eCommerce brands?
Composable architectures offer numerous benefits for both B2C and B2B ecommerce brands that value flexibility and adaptability. They enable these businesses to focus on innovative
solutions to enhance their operations and customer experiences. However, composability might not work well for businesses that require rigid and standardized processes as they will have limited room to enable customization or frequent changes. That’s why at VTEX, we provide both a composable platform and one we call ‘complete’, which provides all your needs in one package to plug and go-live. We help e-commerce companies accelerate time to revenue and decrease complexity
This is why what we call pragmatic composability is that middle ground for many businesses, embracing the assessment of their existing processes and systems, identifying areas that would benefit most from flexibility, and implementing modular components sequentially.
And that’s just scratching the surface. There are number of other benefits:
- Microservices lower maintenance burden. Upgrading, maintaining, and extending monolithic legacy systems place a significant burden on IT teams. This eliminates the need for
upgrade management. The use of microservices and headless technologies makes it easy to integrate new foundational components. - Composability is flexible. There’s no vendor lock-in and minimal risk to your architecture or business. This is critical for keeping up with competitors. Just look at generative AI as an example: OpenAI released ChatGPT in November 2022, and today countless companies offer chatbots, personalization, and other AI-driven features that help them get ahead.
- Composability moves at the speed of business.The world of commerce moves fast. Businesses need to be able to keep up with customer preferences that change as quickly as TikTok videos go viral, and adjust inventory strategies when supply chain issues arise. Composability lets organizations move fast to address changing market dynamics in real time.
Can you give our audience some specific examples?
Leading companies such as Samsung, Carrefour, Sony, Motorola, Whirlpool, Cia, and Hering have transitioned from legacy platforms to VTEX, choosing it as their enterprise global commerce platform, whether through a composable or complete commerce infrastructure.
Understanding the need to make the right decision amid numerous considerations, one of the key areas for businesses to understand is around ROI and what that will look like in three or five years. To provide clarity on this crucial aspect, we commissioned a “Total Economic Impact” (TEI) study with Forrester, which assessed the financial impact and contributions of VTEX on clients. The report found that clients who migrated their commerce platform to VTEX experienced a 133% Return on Investment (ROI) just three years after migration, increased developer and platform efficiency from 20% in the first year to 50% in the third year, and a similar improvement in marketing operations efficiency. Additionally, clients saved US$ 5.8 million by switching from legacy digital commerce platforms to VTEX, highlighting the benefits of our tailored composable and complete platform for enterprise businesses.
For the companies utilizing a composable approach and increasing conversions, average order value, rapidly expanding to new locations, and dramatically improving customer service.
- Motorola faced a challenge with its multiple commerce platforms, leading to high costs and inefficiencies. By migrating to VTEX, they found it easier and faster to launch new stores globally, leveraging their existing foundational work. VTEX’s adaptability allowed Motorola to experiment with third-party applications, optimize architectures for different countries, and achieve a remarkable 20% annual growth in their ecommerce business.
- Belcorp, a prominent health and beauty product company, made a strategic move by migrating from SAP to VTEX for enhanced business and solution agility. This transition from a cumbersome SAP Hybris system to VTEX’s MACH-certified architecture provided Belcorp with unprecedented flexibility, allowing them to adapt and scale their digital capabilities effectively. This transformative shift towards a more modern and flexible architecture with VTEX was driven by Belcorp’s focus on achieving long-term ROI and future-proofing their technology investments.
- Briggs & Stratton, a leading B2B company in outdoor power equipment, embraced composability to revamp its ecommerce operations. The transition involved overcoming challenges like outdated systems, complex infrastructure, and siloed storefronts. By integrating VTEX IO, Briggs & Stratton achieved real-time data synchronization, streamlined operations, and elevated the customer experience. This strategic move not only modernized technology but also future-proofed their B2B commerce business, empowering them to adapt swiftly to evolving customer demands and industry trends.
It sounds like making the shift could require an overhaul of systems, which not every company would be willing to do. How much ‘ripping and replacing’ does this require?
After determining whether a composable architecture aligns better with a business’s needs compared to our comprehensive ‘complete’ offering, which covers all aspects required for enterprise digital commerce and reduces complexity, the transition to a composable approach may require some rethinking and restructuring of systems. It’s crucial to emphasize that this transition doesn’t always demand a complete overhaul or “ripping and replacing” of existing systems.
In fact, it allows businesses to assess their existing processes and systems, identify areas that would benefit most from flexibility, and implement modular components sequentially. By adopting this incremental approach, which we call pragmatic composability, companies can manage risk more. The degree of change required can vary widely depending on the current infrastructure, business goals, and readiness for digital transformation. In many cases, a phased approach.
According to a 2023 survey of over 500 retailers in the U.S. and Europe operating a omnichannel or unified commerce approach, 91% believe a composable approach is important and 67% are ready to deploy a composable commerce approach. This shift from a ‘one size fits all’ comprehensive approach is being felt throughout the ecosystem, but it’s important to have a partner in your digital commerce technology rather than just another platform. That way, you can ensure that your departmental stakeholders benefit from a streamlined workflow facilitated by your digital commerce solution. This allows you to bring your developer and marketing experience on par with a heightened customer experience.
How can retail companies begin the shift towards a microservices-oriented architecture?
Businesses are increasingly moving away from traditional monolithic architectures due to their costly and inflexible nature, often hindering web innovation flexibility. This is a common driver for enterprise businesses to migrate to VTEX’s composable and complete commerce platform. For B2C and B2B brands considering Composability, it offers the ability to integrate various software solutions for a tailored architecture that meets both current and future organizational needs. The initial step involves assessing whether this approach aligns with the business’s unique requirements or if our complete platform may be a better fit, ensuring compatibility with their model, priorities, and industry standards.
Once the suitability of a composable architecture is confirmed, businesses can begin the transition by evaluating their current technology landscape and aligning it with their strategic objectives. This includes identifying areas within existing systems, processes, and data flows that can benefit from modularization and interoperability. By prioritizing key business areas such as enhancing customer experiences or optimizing operational efficiency, companies can effectively allocate resources for a successful transition.
This phased approach aligns with pragmatic composability principles, ensuring a smooth and efficient transition. Implementation should occur in phases, starting with small, modular upgrades and gradually expanding to more critical systems. Collaboration with technology partners who understand composable infrastructure can provide tailored guidance, emphasizing continuous improvement as an ongoing process. VTEX’s large ecosystem enables seamless integration of these solutions, fostering a streamlined workflow and ensuring a heightened customer experience alongside optimized developer operations.
What does the future hold for composability in retail, and how can businesses prepare for it?
As customer acquisition costs continue to rise amidst looming economic uncertainty, businesses are faced with the challenge of optimizing their KPIs to ensure sustainable growth. However, despite these challenges, brands remain optimistic about the future of pragmatic composability in B2C and B2B commerce.
In the rapidly evolving landscape of retail and composability, digital commerce platforms are no longer just infrastructure providers but essential partners, collaborating to eliminate growth barriers through innovative solutions that facilitate selling across diverse channels.
To keep pace with this demand from brands, numerous commerce platforms, including VTEX, are launching bi-annual product announcements featuring bundles of new offerings and enhancements. VTEX Vision, our digital showcase unveiled late last month, aligns with this trend by spotlighting our latest innovations to empower seamless commerce experiences that enable growth in sales. Below are three areas to prepare for this future of digital commerce in retail:
- Sikich conducted a survey of 150 manufacturing executives highlighting a notable surge in ecommerce investments, with 33% significantly boosting their tech stack for a competitive edge. VTEX responds to this trend with major updates to our Faststore B2C and the new B2B version, emphasizing composability for tailored customer experiences. This includes handling the nuances of B2B ecommerce and unlocking composability for speed, ensuring fast website load times and thousands of app integrations to supercharge their online store.
- Security emerges as a critical area for businesses with the increase in ecommerce transactions. This is why we created VTEX Shield as an additional layer of protection for a comprehensive security solution. This includes Security Monitor for real-time threat detection, Pentest Readiness for vulnerability assessments, and Web Application Firewall for app protection, ensuring robust cybersecurity measures for businesses.
- There has also been a keen interest in AI, particularly for demand forecasting and predictive analytics, prompting VTEX’s launch of an AI integrated solution called VTEX Data Pipeline. This tool streamlines data consolidation and integration, empowering businesses to eliminate custom infrastructure and leverage AI-powered tailored insights for enhanced decision-making aligned with internal sales goals.
We are consistently listening to the needs of our over 2,600 global enterprise customers, staying attuned to key trends in buyer expectations, adapting to shifts in enterprise commerce, and delivering exceptional ROI for both B2C and B2B brands worldwide. VTEX Vision is our dedication to fostering this transformative growth, empowering enterprise brands with agile, innovative, and secure solutions for a unified commerce experience.
For more expert Interviews, articles and industry updates, follow Martech News
