This article is provided by BRC Associate Member, Shopify.


Why a blended tech stack is the road to growth for enterprises

It should come as no surprise that the ability to shop across channels has escalated customer expectations to new highs. In fact, research by Accenture found that 64% of consumers wish companies would respond faster to meet their changing needs. And that expectation is only going one way, especially within the retail industry. 

In partnership with IDC we polled 1,000 enterprise retailers to find out more about their challenges. While there is consensus to upgrade their commerce platforms, the appetite to do so in light of the time and cost investments is lacklustre. In fact, two thirds (66%) quoted cost-effectiveness as a key concern when changing their commerce platform and 94% said a timely implementation is important. But is the potential risk swaying too many not to innovate? 

The problem is that customers simply are not going to wait around for retailers to deliver a better shopping experience. They will simply move to a competitor brand. Research by Shopify in partnership with Sapio demonstrates the growing consumer demand for tech-enabled experiences. It found that two fifths (39%) of shoppers are more likely to buy from brands that embed technology into the shopping experience, and one in five say they are more likely to be loyal to those brands. For enterprise retailers it means that they need to ensure both their backend and frontend tech stack delivers otherwise they risk losing customers fast. While the sentiment from both businesses and consumers is clear, how to get there is not.

Finding the sweet spot the tech stack 

Traditionally there have been two options for enterprises looking to upgrade: an all-in-one solution, often built bespoke by one solutions provider, or a fully composable one with modules and apps from a range of vendors. Both had their merits and plenty of issues for enterprises. 

Today there is a better option, the blended model. It combines a composable frontend and a full-stack back-end. It’s a sweet spot between the two that can be quick to market, cost-effective and optimise the customer experience. 

A recent study by BCG shows the blended model works for enterprises. The analysis of over one billion data points across 220,000+ ecommerce sites found that websites with front-end customisation achieve higher conversion rates than those with back-end customisation only. In short, it means consumers respond better to those commerce sites that look and work well. Enterprises must be cognisant of this and start optimising now to remain competitive.

Streamlining checkout with accelerated payments 

A seamless checkout process is essential for higher conversions and to deliver the better buying experience that customers expect. In the study with BCG, we found that offering at least one accelerated payment method can increase lower funnel conversion rates by upward of 50%. 

However, fast payment processing and smooth user experience across platforms and devices are incredibly complex to deliver. Enterprises going it alone with their own payment methods or custom tech stack are creating unnecessary pain and missing out on increased efficiencies. Why compete with the best in class when it is easier than ever to integrate accelerated payment methods into any tech stack? That is why we made Shop Pay available off the Shopify platform, so enterprises can incorporate the world’s best converting accelerated checkout, while keeping their existing back-end in place. We believe it is what makes the sweet spot even better for retailers.

Improving conversion with low latency 

Checkout speed is not the only area where a blended model can alleviate pain points. Latency is critical to conversion too. Reducing latency issues to an absolute minimum makes the shopping experience faster and could even help to reduce cart abandonment as consumers are less likely to encounter lag and frustration. It is also important to squeeze latency out of the entire customer experience because it drives down SEO performance and reduces conversion through webpages all the way to checkout. 

This is why we have focused on ensuring that the infrastructure Shopify provides for enterprises effectively mitigates latency issues thanks to our globally scaled infrastructure that means consumers simply do not have to wait as long to buy. However, latency issues don’t just plague the checkout. That’s why, for the blended model to work successfully, latency needs to be a key consideration across the entire tech stack. For enterprise retailers operating across multiple markets in particular, having a solution in place that means the customer gets the same great experience wherever they are in the world can be make or break. 

As consumer demand for innovative shopping experiences grows, all retailers must take steps or risk losing their edge. But for enterprise retailers, the challenge is particularly noticeable. Responding quickly to customer needs isn’t always possible with their current tech stack, and the traditional models are not fit for purpose anymore either. The blended model removes the pain points experienced by the other two while delivering benefits of both and more. By having the options available to compose the front-end to be bespoke to their consumers’ needs, while incorporating a robust back-end, enterprises can offer a more compelling shopping experience that will drive conversion rates forward.