What Is Modular Commerce? A Simple Guide

When your firm reaches a certain stage of maturity, every detail becomes vital. At this point, you may need to abandon the handy, off-the-shelf solutions you previously relied on.

Instead, you must create an ecommerce system that is tailored to your requirements and provides you with the ability to adjust features as your needs change.

This is where adopting a modular commerce strategy can prove effective for you.

Modular commerce refers to creating an ecommerce firm from various third-party components. By adopting a modular approach, ecommerce organizations may respond to changing demands while tailoring their operations at the granular level.

This post will provide more information about modular commerce and explain why it can be a good fit for your company.

Understanding Modular Commerce?

Modular commerce is an approach to e-commerce structural design that enables constructing online stores from an assembly of changeable modules instead of relying on a single integrated platform.

Every module is an independent service that handles a particular task, such as payment processing, product or service lists, or customer relationship management (CRM). Depending on the needs of the business, different modules can be chosen and implemented, which allows for the brand-specific setup of the software.

For instance, if a company wants to invest more in subscription services, it can choose a subscription services and payments module while excluding other least relevant options, such as inventory.

How Does Modular Commerce Work?

In a modular commerce environment, different individual services are connected by APIs (Application Programming Interfaces).

APIs are the connectors that enable these modules to interface with each other and with the front end of the e-commerce site. This flexible structure enables businesses to integrate or exclude certain API modules without affecting the whole system’s operation.

To illustrate this, let’s consider the architecture of a typical modular commerce system:

• Product Information Management (PIM): A business can use a specific module of the PIM to store and organize product data, description, and price.
• Customer Relationship Management (CRM): There can be a separate CRM module that will be responsible for customer behavior, loyalty programs, and even customer support.
• Checkout and Payments: The checkout and payment modules can be implemented in the system, enabling businesses to utilize many third-party payment services.
• Shipping and Fulfillment: Shipping and logistics services can be integrated by another module so that shipping rates and inventory can be effectively managed.

Every module is designed for the specific functionality of the online store, and the integration of all the elements is done via APIs to provide a seamless eCommerce experience.

Key Benefits of Modular Commerce

Here is the list of key benefits of using modular commerce:

1. Flexibility and Customization

One of the biggest advantages of modular commerce is that it is rather flexible. Businesses do not have to use the conventional, strictly defined, all-encompassing platform.

Instead, they can choose which service best suits their needs from the list of available alternative services. For instance, an organization that deals with online products might not require developing shipping functionality, while it might need to have highly effective subscription functionality. Using modular commerce, they can select only those modules that correlate with their business model.

Further, in case a business requires expansion or a shift, new modules can always be incorporated into the system without necessitating a redesign of the system. This makes it possible to have a very flexible eCommerce solution that can be scaled to fit the business needs.

2. Scalability

It is clear that as the size of the businesses increases, the business needs also increases in complexity.

Using traditional platforms, one may find it difficult and expensive to make changes or expand the infrastructure to meet increased demand. However, the structure of modular commerce is more flexible and convenient since additional modules can be integrated depending on business needs.

For instance, when a small business establishes an online store, it may not have complex functions such as marketing automation, product recommendation, or international shipping capabilities; these features may be added as the business grows.

3. Cost Efficiency

Modular commerce can also be cheaper than traditional software because it is easier and quicker to scale.

Unlike in large, fully integrated, all-in-one enterprise software solutions, where companies pay for many valuable features they may never employ, in modular commerce, organizations subscribe to and pay only for specific modules they need. Also, since each module is independent and can be replaced or upgraded, businesses avoid the cost of upgrading a whole system.

4. Faster Time to Market

Modular commerce can help businesses minimize the time to launch or iterate their eCommerce site quickly.

As the modules are already built and integrated using APIs, a lesser amount of customization or development effort is required. Companies can choose the necessary modules and have them up and running quickly. This is especially beneficial for companies offering new features or products on the platform in a short timeline.

Conclusion

Modular commerce is a new concept in e-commerce and retailing, bringing about a revolution in the B2C business model. It benefits companies by providing a wide range of features they can select and integrate to create highly efficient and scalable eCommerce systems.

Due to the numerous advantages such as flexibility, cost-effectiveness, and scalability, it becomes apparent why so many retailers are integrating modular commerce.