By Bobby Morrison, Shopify Chief Revenue Officer on the Shopify blog
Many CTOs still think they have to choose between two options: buy a ready-made commerce stack for the company, without any flexibility, or build a custom solution.
Neither option is ideal. Either you miss the opportunity to adapt your technology to the unique needs of your business, or you run into time constraints when building and maintaining a custom solution. And let's not forget the cost: hiring a full-stack developer costs, on average, more than $120,000 a year, and when operating at an enterprise scale, you may need hundreds of developers to keep your custom solution running.
So, what should a modern CTO do? Have their cake and eat it too.
Today, there are more options than ever for building a custom technology stack, and many enterprise-scale companies are starting to adopt a modular approach—choosing only the components they need to meet their business requirements. Think of it as an adrenaline shot: take a ready-made component built specifically for commerce and inject it into an internally developed technology stack to drive growth through higher conversion and a better customer experience.
A modular and composable approach helps companies build for the present AND the future—with the flexibility to evolve as needs change, simply swapping out components you no longer need for the ones you do.
Bringing the modular approach to life
The most important component in commerce is checkout. It can be difficult to get right—many have tried—but when it is good, it is hard to beat at converting browsers into buyers. We recently partnered with the Boston Consulting Group to explore how conversion drives commerce. One key finding from that research: flexibility is essential. The study concluded that websites with front-end customization—such as streamlined user experiences, easy-access product portals, and compelling product pages—achieve higher conversion rates than websites that focus only on the back end.
The study also concluded that loyalty incentives can be highly effective at increasing conversion. Stores with an average order value of less than $200 see a 4–6% increase in conversion when they implement loyalty programs. These are just a few examples of how customization can drive higher conversion.
But many companies fall into the trap of building their own checkout process. All this does is create a barrier for buyers, who are forced to repeatedly enter their information to make a purchase, often leading to a drop in sales.
At Shopify, we are so optimistic about modular, adaptable solutions to this common dilemma that we launched Commerce Components earlier this year to make Shopify components available to enterprise retailers. In fact, last week, Shopify was recognized as a leader in the 2023 Gartner® Magic Quadrant™ for digital commerce and ranked first in execution capability—a testament to our unique innovation and vision for commerce.
And in June, we made our accelerated checkout, Shop Pay (still unavailable in Brazil), a commerce component in response to strong demand for a higher-converting accelerated checkout and its more than 100 million users.
So, going back to our checkout example. Instead of doing it themselves, CTOs can now integrate the rest of their custom technology stack with the world's highest-converting accelerated checkout, Shop Pay, which is maintained in production by hundreds of developers and is easy for customers to use. There is no more wasted time, engineering power, or money building critical foundations that Shopify has already perfected. And there is no need to rip and replace your existing commerce infrastructure to get the best and latest features.
From flexible headless SDKs to edge-deployed carts and low-code storefronts, the ability to compose a commerce stack that combines ready-made solutions with customizable ones to accelerate growth makes perfect sense.
Have all the cake
My message to commerce CTOs: settle for nothing less than the whole cake—or at least the slices you think look the tastiest.
Bobby is Shopify's Chief Revenue Officer, joining the executive team in August 2022. He brings more than 25 years of experience transforming multibillion-dollar organizations.
