Modern e-commerce brands are operating in an environment unlike any we’ve ever seen.
As new technologies, communication channels and ‘ways to buy’ rapidly emerge, the goalposts keep shifting - and consumer expectation keeps growing. Even some of the savviest e-commerce companies have found it tricky to keep up.
Many startups and established e-commerce businesses are now choosing to think carefully about the software systems they have in place, and whether they are really the best option for staying ahead of the competition and enjoying success into 2022, and beyond.
But brands haven’t always had such a dilemma on their hands.
A decade ago - or even five years ago - the majority of e-commerce brands made a straightforward decision to sign up to a monolithic ‘single vendor’ e-commerce platform (which includes ERPs) that offered an all-in-one solution to doing business online.
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The one-size-fits-all solution
These monoliths provided a ‘one size fits all’ solution, allowing businesses to manage every element of the online shopping experience - from showcasing products and managing stock to processing transactions and organizing shipping - on a handy centralized system.
However, by utilizing these systems, companies naturally made sacrifices - mainly the usage of best in class modules and apps, and instead, accepting mediocre variants across the board that come included with classical ERPs framed as ‘all in one’ solutions.
While the e-commerce market was still taking off, monoliths actually offered businesses a simple and clear way to manage their front and back end. The monolithic one vendor approach to date has been largely positive, as businesses ventured down the path of doing business online for the first time and consumer expectations drove the requirement for mostly simple, standardized commerce experiences where data could be stored in one place.
The trouble is, these monolithic systems were originally created for e-commerce brands that primarily reached customers via static, desktop computers. Of course, things have changed.
Mobile commerce - buying products over the internet using a mobile device - has skyrocketed in recent years. In 2016 it started to have a significant impact, with 31 percent of all sales online made via mobile. Fast forward to 2021, and 54 percent of all sales are expected to come from mobile, according to our friends at BigCommerce.
Additionally, we are more hyper-connected than ever before, and customers expect to be able to buy goods and services whenever and wherever they are. Consumers want more flexibility in how, where, and when they make purchases. As a result, there is an abundance of emerging technologies that support the development of newer channels - social and voice commerce, text messaging, live streaming and augmented reality, new social media outlets (e.g. Reels, TikTok) and even in-app purchasing in mediums like WhatsApp.
Being ‘mediocre’ in certain areas is no longer acceptable. Consumer expectations for modern, engaging multi-channel experiences have skyrocketed over the past several years, mostly as a result of the leading giants raising the bar in terms of what consumers expect.
It’s now become clear that to successfully compete in the current e-commerce environment, brands must be able to flex and adapt to market trends. The ‘one size fits all’ nature of monolithic platforms, including traditional ERPs, prevents brands from doing exactly that.
Monolithic architecture is notoriously inflexible and difficult to scale - as any business that has tried to integrate it with other tech platforms and API will know. Increasingly, brands are growing tired of getting big bills for relatively small changes (that take months to achieve) and being slowed down by crashes and problems that disrupt day-to-day business.
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Brands admit to feeling held back
In fact, leading brands across the US are now openly admitting that being locked into a service from an ERP vendor is holding them back. The latest research (July 2021) by Brightpearl has revealed that a whopping 90 percent of US brands with a $5-50 million turnover are concerned that a ‘single vendor’ ERP approach to e-commerce is ‘limiting their ability to quickly deploy better shopping experiences, keep up with customer expectations and sell more’.
What’s more, 71 percent of US merchants with a turnover of $5-50 million, and 52 percent of those bringing in more than $50 million, agree that their current ERP makes it ‘nearly impossible to integrate new, better e-commerce technology from other vendors’ at the pace they would like. It’s a similar story in the UK, with half of all British firms saying the same thing.
But if monolithic e-commerce platforms have had their day, what’s taking their place?
It’s all about microservices.
A microservices architecture is a set of loosely coupled services that collaborate to create an operations system. Microservices are modular; they connect through API gateways to create a flexible, scalable suite of services that run independently to each other.
A move towards microservices
Microservices has become a buzzword in recent years - but it’s anything but a fad. Major players such as Netflix, eBay, Amazon and Spotify have switched from monolith to microservice architecture - and swathes of smaller businesses are doing the same.
Brightpearl’s research revealed that more than half (52 percent) of US companies turning over $5-50 million, along with 41 percent of those with turnover of more than $50 million, believe the adoption of Application Programming Interface (API) and microservices is 'much more urgent' over the next 12 months compared to the previous year.
That’s because microservice systems enable businesses to adapt to new innovations - including mobile commerce - quickly and easily. Brands can pick and choose the best-in-breed apps and solutions that work for them, switching and adding as their business grows.
Because the various components in a microservices system operate independently, innovations and new integrations are quick and easy. Initial implementation is much quicker compared to monoliths (days/weeks as opposed to months/years) and the systems are designed to adapt and scale as businesses do.
The open API approach of a microservice architecture often means companies can easily switch things up to boost customer experience.
The era of scalable commerce
For fast-growing e-commerce brands, being able to give customers the immersive, modern shopping experiences they crave is the secret to staying ahead of the competition - and it’s for that reason that microservices are replacing monoliths at such an astonishing speed.
Modern e-commerce businesses are now faced with a choice. They can choose to stick with the one-size-fits-all approach they’ve always known. Or, they can leap into a new era of scalable commerce - and embrace the microservices that go hand-in-hand with it.
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Derek O’Carroll, CEO, Brightpearl