Marketplace

Why Microservices, Headless, & APIs Are the Future of Retail Marketplace Technology

When the pandemic crisis hit in 2020, most retailers shuttered their stores and braced for the inevitable hit to their bottom lines. Best Buy, however, went on the offensive. They deployed contactless curbside pickup within a matter of weeks. 

As consumers ordered webcams, office chairs, and microphones for their new work-from-home set ups, Best Buy offered continuous service, thriving under relentless pressure.

According to Joel Crabb, the former Chief Architect of Best Buy who spearheaded its microservices transformation, the highest praise a retailer can receive today is that their brand is “Amazon-proof.” 

After reading this article, you’ll get a sense of how Best Buy made that choice. We’ll talk about what microservices are and why it and headless architecture are the key ingredients in any digital transformation strategy. We also briefly cover the opportunity cost of continuing to work with your current software provider. 

But to get there, we first need to understand your current software’s structure: monolithic architecture.

The pros & cons of legacy monolithic architecture 

Before the popularity of application programming interfaces (APIs), an all-in-one, monolithic strategy was the natural approach to building software systems. All the requisite functionality that a retail organization needed — from the customer-facing website to the enterprise resource planning (ERP) system — could come from one technology service partner, work off of one database, and use one programming language that its developers already knew how to use.

Technology partners that offer monolithic software entice large retailers with fast – albeit expensive – marketplace execution. In the long run, monoliths are difficult to update and scale. And ending a 6-figure, multiyear enterprise contract requires painfully trading out the core systems. These enormous switching costs handicap a retailer’s growth and ability to rapidly adapt to the environment and customer demand. 

Monolithic software is fast out of the gate, but is an anchor around your neck when faced with changing consumer demands or an industry crisis like a global pandemic. Because the technology is not modular, developers needed to test the entire system for issues to make any changes, even if it’s just pushing out a small bug fix. 

Fortunately, the ubiquity of APIs and the rise of accreditation organizations like the MACH Alliance — which stands for Microservices, API-first, Cloud-native, Headless — have ushered in a new era of nimble enterprise software architecture.

The case for migrating monoliths to microservices

The term “microservices” describes both the strategy and the tools a company uses to execute a best-of-breed strategy. 

Taking the microservices route means taking a best-of-breed approach to your software engineering. Microservice architecture allows marketplaces to choose and swap technology providers – microservices – for each business function without having to change the rest of the system. 

As a component within a marketplace’s ecommerce stack, each service is fully maintained and upgraded on its own. Any system failures are siloed to their own function and are oftentimes maintained by a specialized, cross-functional team. These failures, when addressed within a certain period of time, do not pull down the entire system with them.

Having delineated services means that companies can update and maintain each business function quickly, without having to check for dependencies and bugs with other functions. 

Even if a single point of failure is less fragile (monolithic) than a network of connected systems (microservices), this piecemeal approach makes updates safer. This is why modern technology companies that serve a global customer base like Uber, Facebook, and Netflix are all microservice companies under the hood. 

Uber, for example, migrated Tincup, its currency and exchange rate interface, from a monolithic to a microservices software architecture when it started to scale out of San Francisco and needed to handle multiple currencies. 

Headless architecture falls under the umbrella of microservices. It was pioneered by innovative ecommerce platform commercetools and is most commonly used to build omnichannel ecommerce experiences

Headless decouples the frontend portion of the digital experience with the backend content management system (CMS). For example, a retailer could use Vue Storefront for its customer-facing website, commercetools for its ecommerce platform, and Amplience as a CMS to push media and product information to the website.

The cost of converting monoliths to microservices 

Between 2012 and 2015, while most large retailers resisted ecommerce as an emerging channel, Best Buy invested well over $100 million to fully support their migration from a monolithic to a service-oriented architecture.

As headless software architecture leaders Adam Sturrock and Matt Bradbeer write, “The cost of maintaining the status quo is ‘the cost of the current solution’ plus ‘the cost of not being able to adapt your business fast enough and the lost revenues and customers’.”

While your organization’s conversion might not cost $100 million, your executive team needs to take the opportunity costs of not being adaptable to a fast-changing retail environment into account. The retail marketplace executive team also needs to decide on the best-fit solutions for each component of the business:

  • A frontend and/or ecommerce platform like commercetools to manage the ecommerce website and operations. This could also include a built in Order Management System (OMS) for handling online order fulfillment. 
  • A content management systems such as Amplience and Contenful to store product and marketing media
  • A seller enablement platform  like Convictional for onboarding, managing, and sourcing sellers
  • An ERP like SAP for handling the business' core financials
  • A product information management system like Riversand and Akeneo for storing product and SKU data

This MACH Alliance article goes into more detail on how each component fits into the overall picture and also details the total cost of migration.

Convictional: The API-first microservices integrator for ecommerce marketplaces

A microservices architecture allows retailers like Best Buy to break down the problems it faces and quickly deploy the best software solutions to address them. 

For example, we’ve found that onboarding sellers is one of the biggest hurdles amongst retailers who want to start marketplaces with their monolithic systems. Monoliths and large retailers tend to work with EDI, while modern sellers juggle EDI and API connections. If a retailer wants to scale their marketplace, they need an API-first integrator like Convictional that pulls all their microservices and sellers into one unified system.

Because Convictional is API-first and built to plug into a microservices architecture, we scale with the marketplace as it grows, like Lightspeed’s Supplier Connect. Because of this flexibility, we’re the seller enablement integrator of choice for large B2B online marketplaces like Ingram Micro

As MACH Alliance chairman and commercetools CPO Kelly Goetsch writes, “A strong, headless system integrator is one who can handle a multitude of best-of-breed vendors and solutions, and have the vision to see how it all can be woven together.”

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