By Dale Laszig
The “e” in ecommerce, which stands for electronic transactions conducted over the internet, could also mean “Everywhere Commerce” – fluid and nuanced transactions that flow across channels, bearing little resemblance to early models. The letter “e” is sometimes italicized, hyphenated, capitalized or in lowercase, reflecting the iterative journey from archetypal ecommerce to modern embedded payment solutions.
Ecommerce has come a long way since the 1990s, when websites first offered payment options. Ensuing decades brought technology, APIs, and innovative service providers as ecommerce became more frictionless, enjoyable and secure, using these five keys to success.
1. Design a Composable Framework
Remarkably, ecommerce methodologies have stood the test of time. Experts attribute this resilience to robust supporting infrastructures that allow brands to make changes on the fly and stay in sync with customers, with Gartner comparing these frameworks to Lego logs.
In essence, modularity gives businesses the freedom to experiment with interchangeable parts and vendors without being stuck in monolithic technology. The freedom of what Gartner calls “composable commerce,” is based on three core principles:
- “Composable thinking, which keeps you from losing your creativity. Anything is composable. When you combine the principles of modularity, autonomy, orchestration and discovery with composable thinking, it should guide your approach to conceptualizing what to compose, and when.
- Composable business architecture ensures that your organization is built to be flexible and resilient. It’s about structure and purpose. These are structural capabilities — giving you mechanisms to use in architecting your business.
- Composable technologies are the tools for today and tomorrow. They are the pieces and parts, and what connects them all together. The four principles are product design goals driving the features of technology that support the notions of composability.”
2. Build and Test
The Lego-brick approach provides a common architecture where developers can make changes, fix bugs and add features at a component level, according to MIT researchers, who have seen composable infrastructures replace traditional systems.
“Gartner likens composable infrastructures to a structure made of simple building blocks,” they wrote. “This modular structure permits fast changes and responds quickly to new demand, traffic spikes, material production issues, or supply chain challenges.”
Commercetools researchers agreed that composable environments are more developer friendly than traditional architectures, where “touching one functionality means another may easily collapse in the process. This risk within a tightly-coupled system translates into employees being more reticent to run updates, try out new features and innovate.”
Any reticence about addressing customer inquiries, disputes, checkouts and anomalous behaviors in real time would be detrimental to modern B2C and B2B commerce, the U.S. Faster Payments Council (FPC) noted in its January 2024 bulletin. The FPC stressed the need for real-time fraud monitoring, detection, and mitigation to protect against emerging threats.
3. Adapt and Integrate
FPC’s Fraud Information Sharing Work Group (FISWG) and Financial Inclusion Work Group (FIWG) have tracked faster payments fraud since 2020, gathering industry data on a range of threats, such as identity theft, account takeover, synthetic identity, and social engineering.
“Fraudsters have evolved their techniques by leveraging the latest technology to perpetrate increasingly sophisticated ATO attacks, including phishing, credential stuffing, fraudsters posing as bank staff, and SIM swapping, all at a much greater scale,” FPC researchers wrote, adding that fraudsters took advantage of mass adoption of digital banking and ecommerce during the pandemic and continue to launch large-scale Account Takeover Attacks (ATO) using bots and automation.
In addition to reacting to threats, brands must pivot quickly to engage with customers across channels, which technology partners can help to facilitate. Commercetools recommends taking a “build where you differentiate, buy where you don’t” approach.
Companies that identify strengths and weaknesses across customer touchpoints such as search, content, online chat or checkout, can choose vendors with expertise in specific areas to customize technology stacks, using best-of-breed strategies to differentiate from competitors.
4. Innovate and Iterate
Faster payments have created an environment of instant credit decisioning, risk management and agile fulfilment where customers and brands track orders in real time, communicating by email, phone and chat. By necessity, modern infrastructure must be as dynamic as the commerce it supports. Brands are rising to the challenge by implementing fail-fast strategies, which Commercetools researchers have described as “constantly experimenting, plugging what works and unplugging what doesn’t.”
Customers expect a consistent experience across channels, Commercetools noted, including in stores and online. Researchers acknowledged that achieving this is not easy, but with the right framework and partners, companies can integrate new touchpoints to satisfy requirements. Innovation-focused teams in composable environments can add, remove or switch functionalities without being siloed, they added, which can improve time-to-market.
Trusted partners can fill capability gaps to enhance brand image and customer experience. Payment gateways, for example, can protect a merchant’s customers and reduce exposure by keeping payment card data out of scope. Payment facilitators can embed commerce into native software to help create a consistent, uninterrupted brand experience across channels.
5. Achieve Monumental Scale
Robust ecommerce infrastructures remove friction from cross-border payments, helping companies expand globally. Companies at all stages of digitization are tapping partners to augment core applications with composable commerce. Startups are improving time-to-market by partnering with ecommerce providers, payment gateways and payment facilitators. Mature enterprises are expanding reach by partnering with firms that address specific requirements.
In a digital-first world, ecommerce is valuable real estate. In many cases, an ecommerce site is the first thing that prospective customers, employees, suppliers and channel partners see. Companies are transitioning from monolithic systems to smart applications to make a positive first impression In virtual storefronts and mobile apps.
Fortunately, firms can migrate to modern ecommerce without popping tiles or laying cable. Tech layers can be added without ripping out or replacing existing infrastructure. Building and buying options, which knowledgeable technology partners can help navigate, have become more affordable than ever.
Best of all, outsourcing any aspect of ecommerce does not mean giving up control. Companies can progressively build ecommerce architecture, Commercetools wrote, “controlling every step of the way and minimizing disruptions and mitigating risks.”
Dale S. Laszig is a payments industry journalist and guest columnist for Payfactory. Previous to her writing career, she managed business development for leading payments acquirers and POS manufacturers. Connect with her at [email protected], LinkedIn and Twitter.