What Is Modular Commerce? Headless vs. Modular Ecommerce

Once your business has reached a certain level of maturity or sophistication, every little detail becomes critical. It’s at this inflection point that you may find yourself needing to abandon the convenient, off-the-shelf solutions that you’ve relied on in the past in favor of building a composable commerce or ecommerce system that works best for your specific needs while offering you the flexibility to change as your needs evolve. This is when pursuing a modular commerce approach becomes a top priority.

The process of building an ecommerce business from a variety of third-party components is known as modular commerce. By taking a modular approach, ecommerce companies can be responsive to changing demands while customizing their businesses down to granular, detailed levels. In this article, you’ll learn more about the modular approach to commerce and how it may (or may not) be the right option for your business.

What is modular commerce?

Modular commerce is a development approach that’s based on a composable architecture. Rather than using pre-packaged solutions that need to be configured to play nicely together, developers use their preferred best-of-breed tools to “compose” them into a custom ecommerce experience. For example, you might choose one vendor to handle payments, another to manage the back-end operations of your ecommerce store, and another as your content management system.

Modular commerce leverages modern technologies and approaches like MACH (Microservices, APIs, Cloud, and Headless) and Jamstack (JavaScript, APIs, and Markup). This combination of tools and methodologies gives merchants the flexibility to choose the best apps and services for their businesses without vendor lock-in. A modular architecture allows them to add or remove services whenever necessary. 

Modular commerce vs. headless commerce

Modular commerce and headless commerce are often conflated with each other, but there are some distinct differences between the two approaches. Headless solutions are “headless” because the front end is separated; modular approaches are “modular” because they go beyond that initial separation and provide an array of ways to swap components across the front end and back end. 

Both modular commerce and headless commerce decouple the front end interface layer from the back end functionality layer, but headless commerce stops there whereas modular commerce keeps breaking the system down—such that the front end and back end results in numerous modular components. 

It’s helpful to imagine these approaches on a spectrum: A traditional monolithic system offers little flexibility because all the components are tightly coupled. On the converse, Shopify offers merchants a commerce platform designed for modular additions and customization. Shopify is composable by nature and is as customizable as your business needs it to be. Retailers can choose to use our suite of best-in-class commerce solutions while also integrating with their preferred third-party technologies, including their OMS, ERP, and PIM. 

Further on the spectrum are microservices-based systems—which we’ll dig into in a later section—that provide even more flexibility but incur complexity costs that are critical to consider.

Modular commerce vs. microservices

One step beyond modular systems are microservices, which is when a system is entirely broken up into a web of small services. Microservices are often enticing to companies seeking maximum flexibility, but tend to incur too much overhead for companies that want to focus on their central work and focus less on coordinating their systems.

A modular approach to ecommerce gives retailers some degree of flexibility and stability. With modular commerce, each building block offers:

• Autonomy, meaning companies can easily change components

• Orchestration, meaning companies can coordinate how each component interacts

• Discovery, meaning companies can effectively monitor, manage, and deploy the components in the systems—all at once and each independent of the others

5 benefits of modular commerce

1. Flexibility

2. Speed-to-market

3. Scalability

4. Efficiency

5. Improved customer experience

When retailers consider modular commerce for ecommerce, they’re often looking to unlock flexibility to swap out components as needed and ultimately choose the best tool for each use case. 

In this section, we’ll cover the above six benefits.

1. Flexibility

Modular commerce lets businesses build and assemble a custom tech stack that fits the business’s current needs without locking it into a particular strategy. Businesses can combine different tools and technologies, including front end and back end components, so that they can choose the best solution for each problem. With a modular approach, you can choose the best software components for your business—now and over time—rather than being confined to a one-size-fits-all platform.

2. Speed-to-market

Market demands and customer behavior can change rapidly and often unpredictably. A modular approach also lets companies test new ideas without making significant investments in development. For example, companies can launch new features as separate modules, market them to select customers, and then assess the performance of those features before deciding whether to integrate them more fully into the rest of the platform. 

3. Scalability

Businesses can add modules to their tech stack to address changes in user behavior, such as incorporating AR shopping features or more advanced search functionality, and they can also replace modules with ones that provide more scalability and reliability if the business is attracting more customers. 

4. Efficiency

Modular commerce platforms offer a more streamlined approach to deploying and updating individual commerce functionalities than traditional monolithic approaches. Developers can work in parallel because the overall system is loosely coupled, meaning developers can focus on fixing or improving only the highest-priority features. By only modifying necessary functionalities, companies can remain efficient even as they iterate and prevent potential disruptions by avoiding whole system updates.

5. Improved customer experience

With modular commerce, companies can pick components for specific use cases and problems. As the business evolves and companies understand their customers better, they can add modular components that provide the personalized recommendations, dynamic pricing, interactive product configurations, and real-time inventory update features that modern customers demand. 

Modularity is especially helpful for ecommerce companies that work across multiple sales channels because they can add different modules for different channels, making separate improvements and adding separate features to the website vs. the mobile app, for example.

Is Modular commerce a good fit for enterprise commerce?

Previously, enterprises opted for modular commerce because it offered optionality. However, research shows that global companies need a platform that can grow with them—and a provider that gives them as much (or as little) flexibility as their business needs.

IDC surveyed 1000 leaders at global enterprises and found 45% have a composable front-end and a full-stack back-end while only 27% are fully headless and modular, using a mix of modules and apps from different vendors, and 29% have a full-stack platform; an all-in-one solution. As a result, leaders are finding the perfect blend is optionality. 

This blended model allows enterprises to deliver on a faster time to market, better customer experience, and cost effectiveness—without solely relying on in-house expertise. And cost effectiveness is vital as 91% of enterprises on average said low total cost of ownership is important when changing to headless, hybrid, or full-stack.

When looking for an enterprise commerce platform, it's ideal for it to offer complete optionality in how you build without requiring the advanced technology expertise needed for fully headless and modular commerce platforms. Shopify offers three implementations with a suite of headless, composable, and full-stack options that are all intended to reduce unnecessary complexity, allow you to go to market faster, and give you flexibility in how your stack mirrors the needs of your business. One example of this is Everlane, which uses Shop Pay on its composable front end in concert with its existing back end.