Composable CX: unlocking new revenue opportunities

Customer experience innovations can have a relatively short time to value. Often, they entail opening up new retail touchpoints which produce direct revenue – and attract a lot of attention from customers and partners.

This arguably makes CX more exciting than other areas of ecommerce development. Consider how much money brands wasted on smartphone apps, in the 2000s, before they had a use-case for them. By comparison, the move towards headless backends has been steadier; not quite a gold-rush.

This doesn’t mean that CX technology is an easier sell. The excitement of new CX developments also implies greater visibility, and greater exposure to risk – potentially harming valuable customer relationships if things go wrong. Furthermore, today’s technology buyers are savvier, and arguably more risk-aware than in the days of the smartphone boom.

To truly understand the evolving business development challenges in customer experience, we spoke to Andrew Elia, founder of Arishi, a UK digital agency.

Andrew’s company was founded in 2002, initially as a builder of bespoke CMS’s, and now working as a systems integrator. The company is also a pioneer in extended reality (XR – including virtual reality and augmented reality) and they continue to help brands break ground in this fast-evolving area of CX.

You can listen to the podcast here, or read an article based on it below.

In this article, we discuss:

• the evolving customer trends in CX development: from tactical, problem-solving deployments, to more ambitious strategic projects, enabled by composable solutions
• the buyer persona of CX solutions: often brand marketer, with an appetite for new opportunities, yet an awareness of risk
• the importance of two-way development, between agencies and CX solution vendors, in order to ensure that solutions are sold and deployed effectively.

As the era of headless commerce enables more rapid CX innovation, collaboration between agencies and vendors will be important as ever, in aligning solutions to the customer’s commercial goals.

Composable CX enabling new strategic opportunities

Technology sales often start with a customer problem. In customer experience, however, deployments are often strategic – i.e., in order to open new revenue channels, experiences or brand propositions. Thanks to the agility of composable solutions, new strategic opportunities are rapidly opening up.

For an early strategic example: Argos – a UK catalog retailer – had been an early adopter of Magnolia as part of its digital transformation.

Andrew explains that Argos “very much come from the build-it-in-house way of thinking”, as a result of the limitations of earlier off-the-shelf CX solutions. Indeed, these were the same market conditions under which the Arishi agency originally set out as a bespoke CMS builder.

“At the time we started in 2002, it was quite a barren landscape in terms of platforms that were available and affordable. If you needed any sort of content solution – whether a CMS, ecommerce etc – there was a tendency for people to just build it themselves.”

With Argos’s ‘call and collect’ business model (until the catalogs went out of print in 2020) it depended mostly on remote ordering. Furthermore, the visual merchandising aesthetic from its catalogs as very well known by UK customers. With digital CX accounting for a greater share of the company’s revenue, compared to a typical retailer, Argos saw an obvious business case for adopting a headless CMS.

Of course, composable solutions can also be deployed tactically. Andrew gives the example of Arishi’s work with Sainsbury’s, a UK grocery chain, which had been suffering the strain of pushing promotions to its shopping app using legacy architecture.

“Up until we got involved, there was some poor guy who would get up at 7am on a Sunday morning to hack a JSON file with some content and URLs and things like that, upload it really quickly, check it on the app, discover it’s broken the app, put the old one back, tweak it and try again.

So we built a system in Magnolia – it wasn’t rocket science – and the client saw it was a game-changer.”

Andrew explains that following this, Sainsbury’s proceeded to deploy Magnolia across the group.

And as companies adopt headless solutions across their wider architectures, many more companies are looking to CX investments not only to solve problems, but to unlock their next phase of revenue growth.

One of these new opportunities is around artificial intelligence (AI), which is fast becoming a feature of many martech solutions (indeed, on an upcoming episode of Martalks, we’ll hear from Todd Michaud of Huloop, a tool for building AI functionality into other software).

New retail touchpoints, from shoppable cars and home appliances, to extended reality environments (or ‘XR’; implying virtual and augmented reality) will yield a wealth of new data which can be of great utility for AI processing.

AI, however, relies on the readily availability of well-organised data. Legacy ecommerce platforms are notorious for hindering (or even preventing outright) the extraction and usage of data, so companies wishing to capitalize will mostly need to adopt cloud-based tools.

“Many search and merch platforms are AI based… If you can drive all of those through a headless CMS as well, then everything is in one place, you don’t have to keep jumping between different admin platforms in order to get where you need to be.”

More widely across the ecommerce stack: AI stands to deliver enhancements and efficiencies such as improved personalization, automation and predictive modelling, but to a great extent, this will depend on brands adopting composable architecture.

For all the potential upside, though, these are risky and expensive investments for companies. Sales teams will need to learn lessons from the recent history of technology business development, in order to win customer buy-in for change.

Addressing the priorities of CX technology buyers

Positioning for key buyer personas is one of the fundamentals of sales and marketing – yet this is an area where new-breed technology companies have often struggled.

We’ve heard recently about the difficulty that headless platform providers have had selling into the US, where the buyer is likely to be a non-technical business owner, and often less appreciative of the possibilities of a headless backend.

In customer experience, the buyer profile is different. More likely to be a marketing professional, they may be more interested in new possibilities around customer engagement – yet still with a certain aversion to risk.

“Generally speaking, our relationships tend to be at the CMO level… They tend to not have the depth of understanding of the technology, but they do of the use-case.

They are always very reluctant to be told about acronyms and technical trends etc., because they see technology in many forms as a risk.”

In a lot of cases, says Andrew, companies “sleepwalk into a monolithic system because it has everything in the box” – and hope that since it was all made by a single supplier, everything must work correctly.

I’ve heard countless stories, from technology companies, about the difficulty to getting headless technology to resonate with customers. To make change appear more palatable, technology companies need to lead the discussion about the cost-benefit ratio of adopting modern technology.

The followings selling points are promoted in some admixture by most composable providers. Andrew’s examples help how these benefits can be adequately positioned around the customer’s existing priorities and concerns.

1. Help customers understand the risks associated with legacy architecture

Andrew shared the term ‘compostable commerce’: a clever bit of wordplay which implies that the software can be safely disposed of without harming the surrounding ecosystem.

It may not be the right term for customers (it sounds like more jargon), but it does directly address concerns about vendor lock-in, and the risks of technology development.

The risks of legacy systems are widely acknowledged by techies – as per this example from Andrew…

“People who’ve use Microsoft solutions before might snigger a little bit, because Microsoft over the years has acquired and bashed into submission many an application, and some of the integrations aren’t necessarily as seamless as advertised.”

…but they are perhaps less appreciated by customers.

As with the Sainsbury’s example above: vendors and agencies must work to help the customer draw a direct line between the business problems they’re already experiencing, and the legacy systems they’re currently using. This will make the risk of not upgrading their architecture appear greater by comparison.

2. Actively promoting composable software as the safer option

This is a great anecdote from Arishi’s portfolio…

“We deployed a site for a company in NZ, whose marketing director left under a bit of a cloud after we built the site for them. The whole thing stayed up for about a year without anyone doing anything do it at all. It just kept running.

And that’s not an unusual incident. We see Magnolia as something that is very robust. Without wanting to diss any of the other platforms, they tend to need a little bit more babysitting and a bit more attention on a regular basis in order to keep them running – whereas this pretty much runs itself.”

What’s missing, from many technology companies’ published case studies, are stories with this human element.

Legacy and composable vendors alike can claim that their solution enabled all manner of business KPIs. The idea that the technology can help businesses ride out internal business disruption, however, carries more emotional appeal – which is an essential part of effective marketing in any industry.

3. Helping customers believe in the effectiveness of integrated solutions

Integrations are already a familiar topic for most brands, since in the last 15 years, they’ve spent a lot of money on expensive hardcoded integrations between legacy systems.

The ease of integrating composable solutions, therefore, is already a well-publicised selling point for most vendors.

“With CMS platforms, we mention Magnolia quite a lot; obviously other platforms such as Contentstack have a similar idea… The vendors effectively certify that when you plug system A into system B… It’s not a patchwork Zapier-type solution; it’s something that is robust and tested for a decent set of use-cases.”

With the recent proliferation of standard integrations, more customer use-cases are becoming addressed by readily available technology.

Andrew explains that when they’re able to demonstrate this to the client, “that’s what usually get us the green light.”

In martech, open cultures enable two-way development

From our previous episodes of Martalks, it’s become clear that solution vendors increasingly depend on the agency’s customer perspective in order to fulfil their market potential.

Chris Lemmer of SwiftCom, a digital agency, recently explained how his work with South African retailers revealed a market need for an integration between Vue Storefront and WooCommerce. For Vue, this has opened up a potentially lucrative market which otherwise may have been prohibitively difficult to reach.

More generally: collaborative, or ‘two-way’ development around the client’s use-cases is likely to be needed to guide them towards appropriate solutions.

“Very often you’ll see a client who’ll say “we want to do XYZ and we’re thinking of using this system” – but actually, the client’s use-case isn’t covered by the solution as it stands.

A less-able technology company would try to rewrite the client’s use-cases to match what the software can do, but we don’t subscribe to that. Our mantra is that we wrap the technology around the requirements and not the requirements around the technology.”

With agencies and vendors now increasingly dependent on each other for ongoing trade, openness – both of architecture, and cultural openness – has proven to have been a highly valuable characteristic of a technology vendor.

Andrew describes that in the early days of their relationship with Magnolia, it was the technology that attracted them to the solution.

“We work with a wide variety of these platforms. What we really like about Magnolia is it’s quite an open architecture, so as our team started to learn the product, we were able to lift the hood and see how everything is hanging together and understand it.

When you understand the architecture, you can see it’s been well put together, it’s very lean, and whenever we’ve deployed platforms like that, they just run and run and run.”

Despite the evident strengths of the platform, the early days of the two companies’ relationship were not all plain sailing.

“We’ve been working with them for about nine or ten years. With them being a Swiss company and with us being British, initially I would say there was a little bit of a cultural mismatch. The thing that kept us going was that our team was always so enthusiastic about the product.

As Magnolia evolved, they brought in a new management team in the UK, who were British and who understood the market a lot more. They saw some synergies that their predecessors hadn’t seen.”

Many composable solutions are far younger than nine or ten years. Often, the agency’s relationship with the customer – and the inherent trust that that implies – will predate the technology itself. In cases such as these, transparency between collaborating technology companies is crucial to helping the agency manage its own risks in deploying new solutions on client accounts.

“We get lots of platforms approaching us saying “please can you sell our platform to all your clients” but for us there’s a bit more to it. We need to make sure it meets our requirements for resilience and quality of architecture.

We want to be agnostic about the solutions that we recommend, but when we put our mark on something we want to make sure the client doesn’t come back in 6 months and say, “you recommend this system and it was terrible, it kept falling over”, or “The company’s shaking us up and down.”

Andrew explains that this key component of the relationship is not unique to CX solutions; “we have that sort of alignment BigCommerce and commercetools and so on.”

But whereas the business case for platform solutions is arguably more academic, customer experience is often more attention-grabbing – including when things go wrong. Amid all the excitement, open collaboration helps to ensure that solutions deployed adequately deliver on the client’s expectations and goals.

Tapping up new opportunities in CX innovation

In the coming years, the flywheel of CX will accelerate. Headless architecture will enable greater agility with data processing, wider deployment of AI, the freedom to publish to many different digital environments via low-code or no-code CMS.

Andrew compares this to how the early content management systems gave brands control of content publishing during the early 2000’s.

“With VR and AR, there’s a definite parallel with what happened when people were building websites in HTML. Someone would build a website in flat HTML, the client would come along and request changes, you’d go back to the developers, they’d tweak it, and content management evolved to make that a less technical skill.

We’re currently seeing that same sort of curve with XR. Currently when someone builds a VR app, they’ll create something in Unreal or Unity, bake in all the content, 3D assets, textures, textual content and stick it on a headset. And when someone wants to make changes, they have to go back to the developer. So it’s exactly the same paradigm.”

Andrew says that Arishi is now talking to brands about building XR applications on top of Magnolia and commercetools, which “can operate seamlessly in this area”.

Doubtless, this is a boon for technology companies – but one that cannot be taken for granted.

Customers and agencies alike are continually balancing risk against opportunity as they attempt to carve out commercial gains. All the while, they are navigating a swelling crowd of solution vendors clamouring for their business.

Existing players in the space will doubtless earn a lot of short-term revenue helping brands navigate tactical challenges as they emerge: cheaper development, simpler marketing, more accurate targeting, etc. But the scale of the new strategic commercial opportunities, enabled by composable CX, cannot be understated.

By owning the conversation around risk, time-to-value and ROI, technology companies can help their own retail clients become brave enough to lead the charge.

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