How to Maximize ROI of Your Composable Commerce Transformation
A roundtable discussion with experts from Orium, Bold, and Sephora
A recent webinar with Jay Myers, Co-founder of Bold, Thomas Mulreid, Head of Sales at Orium, and MACH Ambassador Sree Sreedhararaj, SVP and CTO of Sephora, looked at the power of composable commerce in maximizing a brand’s ROI through the inspiring story of Sephora’s digital transformation as a global retailer in prestige beauty.
The Sephora Story
Sephora is no stranger to digital innovation. “In 1999, when we started digital, [we were] primarily dedicated to making discovery happen and less about the purchases,” Sreedhararaj started. “But slowly it grew up to be… [an] organizational revenue maker.”
As Sephora grew organically, certain liabilities began to emerge, like legacy systems and operations. And those concerns raised questions.
“How do we generate organizational beliefs and technology approaches with respect to the product mindset?”
“How do we figure out the time-to-value?”
“How do we prioritize growth versus perfection?”
Recognizing the need for a more flexible approach to their digital operations, Sephora began their digital transformation journey 6-7 years ago, intent on decoupling their tech stack.
To achieve their goals, Sephora adopted a three-year plan for shifting their digital operations:
- Year 1: Create a small “fast track” team focused on consistent and continuous delivery of certain features in consumer-facing applications
- Year 2: Create multiple “fast track” teams for multiple streams of delivery
- Year 3 : Create a “product delivery model”, where teams are organized around domains and capabilities, which can then be delivered consistently, updated consistently, monitored, and more
A crucial element of their strategy was transitioning to an agile approach. Instead of organizing teams around systems and tools, they started focusing on sustainable, domain-based teams. In this way, noted Sreedhararaj, they are able to “consistently [look] at results from the production and results from consumer feedback, and then [optimize] for the future.”
With a strong composable foundation in place, when the pandemic hit, Sephora was able to take the uncertainties it brought with it in stride. They increased their omnichannel capabilities, adding features like reserve online, pick-up in store (ROPIS) and same day delivery quickly and easily, and leveraging their product delivery model to iterate and improve on those features as needed.
As Myers noted, this kind of adaptability is the aim of a composable build. “Moving to composable is not the end state,” he stated. “The goal is to unlock new channels or unlock different ways of selling or own different components—to maximize the revenue that composable can unlock.”
And Sephora certainly benefited from being an early adopter of that kind of flexible mindset.
“One of the advantages of the composable journey is that you can make iterative enhancements, iterative launches, and… test it out, get the feedback,” said Sreedhararaj. “You can then figure out which path you want to take.”
Maximizing ROI With Composability
While it’s possible to undertake a multi-year project to move to composable, this often comes with the expectation that ROI will come at the end. An incremental approach to digital transformation could be a much more effective strategy for brands.
“The advantage of composability,” noted Sreedhararaj, “is you don’t truly build the whole castle altogether. You just build one room at a time, and each room you build is giving you the return immediately.”
Being able to take it in stages means you can see ROI faster. Sreedhararaj continued, “You’re not looking at millions of dollars of investment and expecting ten times of the revenue to come back. Rather, you’re looking at very tiny investments and then immediately get the return for it.”
Mulreid also notes that the impact of composability on ROI isn’t limited to just the immediate change. When you tease it apart, it’s the effects of composability—such as new touchpoints, speed, and agility—that influence ROI. For example, enabling content, product, and search teams to implement features without dev support is a direct result of composability, and that kind of agility can directly lead to greater ROI.
Going Composable
Approaching digital transformation, according to Mulreid, is about finding your pain points and understanding the limitations of your older technology.
“It could be as simple as a couple of components on your homepage managed by a headless CMS, or it could be search on top of your monolith because your product data is not clear,” he said. In addition to Mulreid’s piecemeal approach, Sreedhararaj cautioned against trying to build everything yourself.Each of these presents an area of opportunity where technology can help accelerate change.
In addition to Mulreid’s piecemeal approach, Sreedhararaj cautioned against trying to build everything yourself.
“There are so many platforms out there… you can just plug in and start using immediately,” he noted, recommending that brands try to use those “rather than building everything” themselves.
By doing that, they can differentiate where it makes a real impact. In the case of Sephora, they created their own loyalty ecosystem, an area that helped them stand out from competitors and build a devoted following with their most engaged customers who now serve as passionate brand advocates.
Sephora benefited from being early adopters of composable commerce, and there are plenty of lessons to be learned from their digital transformation journey from both a business and technological standpoint. To hear their full story and more, check out the full webinar.
Adam Craveiro
Content Writer, Orium
As a former teacher and writer for a multimedia agency, I blend my passion for cutting-edge technology to create content that helps retailers navigate the composable commerce space. I leverage my background in adult education and personal experience with web development to cover the latest industry news and provide insight on the technologies shaping the commerce world at large.