By: Derek O’Carroll, CEO, Brightpearl.
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 ecommerce 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.
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 organising shipping – on a handy centralized system.
While the e-commerce market was still taking off, monoliths offered businesses a simple and clear way to manage their front and back end.
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% of all sales online made via mobile. Fast forward to 2021, and 54% of all sales are expected to come from mobile, according to our friends at BigCommerce.
It’s now become clear that to successfully compete in the current ecommerce environment, brands must be able to flex and adapt to market trends that are triggered by mobile technology. 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.
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% 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% of US merchants with a turnover of $5-50 million, and 52% 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 which 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%) of US companies turning over $5-50 million, along with 41% 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.
Derek O’Carroll is CEO of Brightpearl, responsible for the overall company strategy and for delivering on Brightpearl’s mission to automate retail.