The past decade has seen the rise of headless and composable systems in enterprise e-commerce. This shift to headless has enabled businesses to take advantage of the benefits of building and managing their own custom commerce applications. However, headless commerce has its considerations and limitations.
Shopify Plus has announced its intention to address these by introducing a new product called Commerce Components - a modern, composable stack for enterprise retail. This allows brands to pick and choose which of Shopify's modular components to integrate with their existing services and build with any front-end framework they choose.
Before we jump into what Shopify Commerce Components is, it’s important to understand what composable and headless commerce is - why it’s becoming the industry standard for online brands and how this benefits enterprise retailers.
Composable commerce vs Headless commerce
In a nutshell, composable commerce is a new way of selecting the best-fit components and “composing” them into a new app. They can be built to serve different use cases and work with multiple e-commerce solutions simultaneously.
Headless commerce is also a new way of building apps. They are re-imagined from the ground up in decoupled fashion, but they still have the same ability to interact with the existing apps on Shopify Plus.
So, what's the difference between Composable and Headless?
Headless commerce decouples the front end (e.g., a website or mobile app) from the back end (e.g., the database and order management systems). Composable commerce takes this one step further, decoupling all e-commerce components, allowing you to construct the perfect technology stack for your needs.
Composable commerce isn't a technological innovation but a more modular way of organizing your online business. It allows you to pick and choose services and solutions that best suit your business rather than picking a monolithic architecture.
Advantages of being on a composable tech stack:
- Greater control over your tech stack (greater flexibility / modular architecture) -- you can pick backend services as you need.
- Optimizing costs -- you only pay for the services you need.
- Future-proofing -- a composable approach allows you to swap services with the changing demands of your business without having to change your entire tech stack
A typical composable stack would include a range of best-in-class services, such as a tax platform, a fulfillment service, a payment platform, and Shopify's checkout, to name a few.
Headless and composable systems in enterprise e-commerce
With the arrival of headless and composable commerce, the landscape has shifted. Shopify’s move to a headless architecture is one of the largest in this space that we’ve seen. This decision has allowed companies to build on top of their platform and create new products or services with much less friction than before.
Launching Hydrogen and Oxygen last year, Commerce Components is the obvious next step and Shopify’s answer to a composable enterprise solution.
Trends driving the rise of composable
To understand the need for composable commerce, it helps to understand some of the trends that have led to it. These trends include:
- The need for speed, flexibility, and scalability. Companies are trying to iterate quickly to stay ahead of the competition, but their existing architectures can't keep up with their pace of innovation.
- The need for a modular approach to e-commerce platforms that allows companies to mix and match individual components from different providers or build custom solutions with ease.
- The rise of the Software as a Service (SaaS) model. Companies are assessing how they can leverage this model across all parts of their platform architecture, especially when it comes to upgrades or maintenance projects that require significant server changes before they can be deployed.
- The need for a cloud-native architecture. Companies want to build applications that can easily scale up and down as needed, no matter where the application is running—whether it's in the cloud or on-premises
And as you can see from the list above — which we've already seen applied by some major retailers — there's no shortage of drivers behind the need for flexibility, scalability, speed, and simplicity in today's fast-paced digital business world.
What is Shopify Commerce Components?
Shopify Commerce Components is a suite of more than 30 modular components that can be used or integrated with third-party services for e-commerce applications. The components are designed so that you can choose how to compose your commerce stack. In addition, the components themselves are designed to be extensible so that their behaviors can be modified to fit a merchant’s business needs.
While still very new, the Shopify team will share the tools they've built to help developers build their custom selection of components that integrates seamlessly with their existing stack. Regardless of your selection, you will always have access to the Shopify Checkout.
Components currently available
Commerce Components are a collection of APIs, SDKs, and integrations that enable you to build an efficient commerce solution for your business.
There are currently five Commerce Component categories:
- The Storefront category includes APIs for building a headless frontend experience.
- The Cart/Checkout category includes APIs for managing payment information.
- Core Commerce includes APIs for creating products with multiple data models.
- Data & Compliance component category offers solutions that help you manage your customers' data privacy concerns, such as GDPR compliance.
- Shipping & Logistics component category offers solutions related to shipping labels API integration.
Who is Commerce Components for?
Commerce Components is ideal for enterprise retailers that run on a complex commerce stack with a range of custom and 3rd party technologies that take a lot of time to change. They are vertically integrated and sell both offline and online.
It's for retailers that need the ability to pick and choose components rather than entire platforms while being backed by an engineering team focused on building and maintaining their commerce experience. And while the threshold isn’t definitive, it’s recommended that brands transact at least $500m+ a year online to get the most out of the platform.
“Commerce Components is an extremely exciting launch from Shopify. It opens up the power of Shopify and its infrastructure to the biggest retailers in the world.
We’re already building with components and are excited to harness the power of this new technology to push the boundaries of what's possible in e-commerce” - Piers Thorogood, Co-founder of We Make Websites
Difference between Commerce Components and Shopify Plus
Shopify Plus is an all-in-one solution for digital-first brands. In contrast, Commerce Components is a selection of modules that enterprise retailers can use to build custom experiences and seamlessly integrate into their commerce stack.
Plus has a standard pricing model of 0.4% variable fee, with 0.15% discount when using Shopify Payments and a minimum $2,000 USD/month. Whereas Commerce Components has tailored usage-based and component-dependent pricing, based on four principles:
- Modular: Retailers pay only for the components they choose to use.
- Based on Usage tiers: Pricing for each component is based on a retailer’s usage of each component, and unit costs decrease as usage increases.
- Predictable: Pricing is annual and based on commitment tiers so retailers know exactly what they’ll pay.
- Bundle Discounting: Discounts increase as retailers commit to more components.
Plus merchants get support from a Customer Success Manager and launch support. In contrast, Commerce Component retailers will get access to Shopify Professional Services, enterprise-grade SLAs, and a dedicated account team with 24/7 priority support.
Features & Functionality
Shopify Plus features and functionality are already well-defined, with more advancements coming in 2023. Still, Commerce Components comes ready with no API limits, 40k checkouts per min/store (vs. 15k), increased product variant limits, new third-party technology partnerships, and an admin experience designed for enterprise workflows.
Time to launch
Time to launch will be heavily dependent on the retailer’s specific needs, but we expect it to take multiple months on average. Commerce Components implementations will take longer than typical for Shopify Plus
Commerce Components Hosting
Shopify will assess each retailer, ensure they have the server capacity they need, and guarantee and SLA
The enterprise commerce solution powered by Shopify Commerce Components
If you're a Shopify Plus merchant, the announcement of Commerce Components may have left you wondering what it means for your commerce operations. After all, these two solutions are so different from one another that they might as well be on opposite ends of the spectrum.
To break down the differences between these platforms, it's helpful to understand how each one works.
With Shopify Plus, merchants run their stores through an admin panel and use various features like inventory management and order fulfillment with the help of third-party apps and integrations. These features work together within Shopify's ecosystem without affecting any other parts of your store or business process outside this ecosystem (such as accounting tools).
In contrast, Commerce Components is built specifically for enterprise businesses looking to customize their stores' user experience by connecting different components into existing e-commerce tech stacks — all while maintaining control. It could be Shopify’s storefront, its super-fast checkout, or its content management system, all very unlikely to be used on their own. Still, when combined with enterprise software stacks, they become a powerful offering.
Who is using Commerce Components Already?
Commerce Components has been used by brands like Mattel, JB Hi-Fi, Glossier, Coty, Steve Madden, Spanx, and Staple. But, as the platform only officially launched in January, we’re expecting to see a lot more enterprise retailers join this list very soon.
As the world of e-commerce evolves, so must the technologies that support it. Shopify's recent launch of Commerce Components is a prime example of this. The platform has always been known for its flexibility, but now, with the addition of Commerce Components, it has become an even more powerful tool for enterprise retailers.
It's important to note that while Shopify Plus already offers many features that allow merchants to focus on their business rather than the technology, Commerce Components takes this to the next level. It's an exciting time for enterprise retailers as they can now leverage the power of Shopify to create an e-commerce platform that is truly unique to their brand.
As a top-tier partner of Shopify Plus, and with our extensive experience in enterprise commerce, we are well-positioned to help retailers navigate this new Shopify offering. So, reach out to us with questions on Commerce Components, and stay tuned to this article for more updates as Shopify releases them.