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The Future of Retail is Composable

Thought Leadership

Physical stores have been a staple of retail for hundreds of years so, even though ecommerce is growing in influence, it is not replacing brick and mortar just yet. In fact, brick and mortar still accounts for more than 80% of the global retail sales. However, as online sales continue to increase, retailers are turning technology to help them better engage with their face-to-face customers – from store-cleaning robots to interactive displays to AI-powered platforms that keep stock levels consistent.

Customers expect more and more from retailers. They want personalized experiences, as well as convenience and efficiency. To compete with the ease and availability of online shopping, a growing number of brick-and-mortar stores are looking to smart retail applications to create more compelling in-store experiences, drive greater brand differentiation, and foster stronger customer loyalty.

To succeed in their smart retail efforts, companies need to move away from a traditional, inflexible software development approach when creating these types of applications. Instead, they should take a composable approach, which enables them to select ‘best of breed’ software components and combine them into a custom application that is optimized for their specific business needs.

Mastering Business Composability

The term “composable” encompasses a mindset, technology, and processes that enable organizations to innovate and adapt quickly to changing business needs. A composable approach to application development leverages a collection of interchangeable software building blocks (similar to Lego) that can be added, rearranged, and jettisoned as needed. By assembling and reassembling various elements, composable businesses can respond quickly to market shifts.

Business composability enables digital agility and resilience in the fast changing retail industry. It enables businesses to quickly develop smart applications that are optimized for their specific retail environments, without having to spend the time and money on creating the supporting software from scratch. In addition, the modular approach of composability allows applications to easily evolve to support additional retail capabilities as the business grows.

Unfortunately, according to the latest Gartner research (2022 CIO and Technology Executive Agenda: Retailers Differentiate Through Stores but Struggle With Composability), “composable business capabilities remain elusive for retailers as they lag behind other industries and highly composable organizations.”

However, this situation can be easily remedied once retail leaders understand the true value of having a composable mindset.

A Composable Mindset

Customer centricity demands knowing the customer, predicting their actions and being relevant on every path to purchase. Due to the complexity of multi-channel retail commerce operations, businesses must speed up their investments in the emerging technologies that will enable the future of retail, including artificial intelligence (AI). According to the Gartner research, highly composable enterprises are twice as likely to adopt AI.

Composability can accelerate the adoption of technologies such AI, Internet of Things (IoT), and location tracking. In fact, a Gartner survey found that companies who have embraced a composable architecture are twice as likely to adopt AI (2022 Gartner CIO and Technology Executives Survey). This will allow retailers to more easily create smart retail applications that help them develop more autonomous, efficient operations, while also connecting their customers’ digital and physical store shopping behaviors in a more personalized, meaningful way.

By simplifying the development and deployment of composable retail applications, retailers can easily offer customers what they want and how they want it, and deliver cutting-edge capabilities including (but not limited to) smart inventory management, dynamic pricing, and connected digital and physical shopping carts.

The retail landscape is changing dramatically. As brick-and-mortar businesses evolve and increasingly rely on smart retail applications – as well as a composable approach to building these applications – to meet ever-changing customer expectations, they will drive new customer behaviors that usher in the future of retail.

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