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As we move into 2025 and reflect on the learnings of the 2024 holiday season, customer loyalty \u2013 and the risks of losing it \u2013 are at the top of every business leader\u2019s mind. Speed, consistent uptime and outstanding UX have emerged as non-negotiable elements for survival in today\u2019s fast-paced market.<\/p>\n
73% of retailers report that downtime during high volume moments would have serious consequences for their business. As we kick off the new year, businesses clinging to outdated legacy ecommerce platforms will be sure to feel those consequences, unless they take the opportunity to get serious about digital transformation. Otherwise, they risk being left behind.<\/p>\n
The rise of AI, cloud technology, and composable architectures leaves no room for complacency. According to a commercetools and Master B2B report, 94% of survey respondents say their CEOs are now backing digital transformation efforts. That\u2019s progress \u2014 but the real question is, why has it taken so long?<\/p>\n
Digital Transformation: Not New, but Urgent<\/strong><\/h3>\nWe\u2019ve seen waves of digital transformation for years, but this one is different. Why? Because AI is at the forefront, and technology lifecycles are shrinking. From 2018 to 2022, companies that embraced digital leadership saw average annual shareholder returns of 8.1%<\/strong>, compared to 4.9% <\/strong>for those that didn\u2019t, proving that businesses stuck in the past aren\u2019t just losing out on efficiency \u2014 they\u2019re putting their bottom line at risk.<\/p>\nWe\u2019re not talking about minor inconveniences. The average tenure of a company on the S&P 500 has dropped from 32 years <\/strong>in 1965 to less than 20 <\/strong>today. The market is ruthless, and there\u2019s no more room for businesses to drag their feet. Just look at Bed Bath & Beyond \u2014 once a retail giant, now a case study in what happens when companies don\u2019t evolve fast enough.<\/p>\nThat said, embracing new technological capabilities isn\u2019t just about avoiding catastrophe \u2013 it\u2019s also about gaining the competitive advantage. While generative AI may be the media darling, standard AI can offer huge tangible benefits: 91% of retailers utilizing AI report improved forecasting accuracy, avoiding costly stockouts or overstocks, and 94% have enhanced their fraud detection capabilities in response to rising online threats. As AI continues to prove its worth in critical areas like inventory management and security, the pressure to adopt these technologies also is mounting. Whether by carrot or stick, all signs point to upgrading.<\/p>\n
The Driving Force of Customer Experience<\/strong><\/h3>\nMuch of this urgency comes from the pressing need to improve customer experience (CX): 79% <\/strong>of executives are investing heavily in technologies that elevate CX, which is the bare minimum in today\u2019s omnichannel world. Features that were once cutting-edge, like buy online, pick up in-store, are now table stakes. Consumers demand immediacy, particularly among younger generations, and savvy business leaders like Ulta and DoorDash are listening, prioritizing the patronage of the shoppers of the future.<\/p>\nBut delivering a great customer experience hinges on more than just strategy\u2014it requires seamless user experiences (UX) at every touch point. We know that smart, strategic UX can boost conversion rates by 400%<\/strong>. But the flip side? A poor UX can drive 89% <\/strong>of customers to your competitors. Retailers are losing customers not because of lack of product, but because they\u2019re technologically deficient.<\/p>\nWhy isn\u2019t Every Company Moving Forward?<\/strong><\/h3>\nOne major holdup to mass adoption? Poor leadership structures. There is a long tradition of companies being held back by outdated attitudes in the C-suite. Many executives come from backgrounds where they simply don\u2019t grasp the urgency or nuances of digital technology. They defer, delay or worse \u2013 choose the wrong tech because they rely on faulty advice.<\/p>\n
There\u2019s another related issue at play here: fear<\/strong>. Large enterprises are complex, and no executive wants to be the one to touch an aging IT system and knock down the house of cards. It\u2019s easier to accept cushy perks from legacy providers and punt the problem to the next CIO.<\/p>\nThe reality is that a true digital transformation requires a level of foresight and investment many leaders are simply unwilling to embrace. Anyone tuned into the business landscape can see the tides are shifting toward composable commerce and that one-size-fits-all models are on their way out. Risk-averse actors might be waiting until they have a \u201csure thing,\u201d at which point they will be irreparably behind those who have proactively met the moment by embracing digital transformation head on.<\/p>\n
The Solution: Incremental Progress, Not a Big Bang<\/strong><\/h3>\nTransformation doesn\u2019t mean ripping out entire systems overnight. One of the biggest misconceptions is that digital transformation requires a massive, all-or-nothing revamp. That thinking is outdated. The future is composable \u2014 an incremental, modular approach that allows businesses to evolve without reinventing the wheel.<\/p>\n
According to a recent study, 91% of businesses already use or are considering using composable commerce solutions. But for those that fear the cost or complexity of digital transformation, the good news is that modular, composable solutions are more accessible than ever. You don\u2019t need to write a massive check to start \u2014 you can begin with a modest pilot and scale up. This is not a giant leap into the unknown, but rather the first in a series of steps with intention.<\/p>\n
Smart companies aren\u2019t necessarily making sweeping changes \u2014 they\u2019re solving specific problems with solutions that last. Whether it\u2019s upgrading search functionality or launching a new CRM, the key is starting small, piloting new technologies and iterating rapidly. The era of once-a-year updates is in the past.<\/p>\n
The Stakes: Innovate or Face Extinction<\/strong><\/h3>\n2025 will be a defining year for many. Business leaders who continue to rely on outdated technologies risk not only their company\u2019s market position but also their own careers, as organizations increasingly seek skills in modern, flexible technologies.<\/p>\n
Organizations that fail to modernize are at risk of extinction, with more agile, digitally native competitors disrupting entire industries. In companies that recently migrated to a composable platform, 67% cited the ability to compete with their peers as the key motivator. For many of them, this year will be one of reaping the benefits.<\/p>\n
There\u2019s no longer a question of whether to invest in tech, only how long companies can afford to wait. The choice for C-suite leaders is stark: take steps now, or risk falling behind in a market that waits for no one. In this environment, the real risk isn\u2019t adapting \u2013 it\u2019s complacency. <\/p>\n
\nKelly Goetsch is an advisor for <\/em>Commercetools<\/em>. He previously served as the company\u2019s Chief Strategy Officer and prior to that he was the Chief Product Officer at Commercetools for nearly six years. Goetsch is an industry thought leader who champions Commercetools\u2019 unique MACH (Microservices, API, Cloud-Native, and Headless)-based architecture, and he co-founded the MACH Alliance, a group of 100+ independent, future-thinking tech companies dedicated to advocating for open, best-of-breed technology ecosystems. Prior to Commercetools, Goetsch held senior-level product development and go-to-market responsibilities at Oracle and held the role of Senior Architect ATG (acquired by Oracle), where he was instrumental to 31 large-scale ATG implementations.<\/em><\/em><\/em><\/p>\n<\/p><\/div>\n
We\u2019re not talking about minor inconveniences. The average tenure of a company on the S&P 500 has dropped from 32 years <\/strong>in 1965 to less than 20 <\/strong>today. The market is ruthless, and there\u2019s no more room for businesses to drag their feet. Just look at Bed Bath & Beyond \u2014 once a retail giant, now a case study in what happens when companies don\u2019t evolve fast enough.<\/p>\n That said, embracing new technological capabilities isn\u2019t just about avoiding catastrophe \u2013 it\u2019s also about gaining the competitive advantage. While generative AI may be the media darling, standard AI can offer huge tangible benefits: 91% of retailers utilizing AI report improved forecasting accuracy, avoiding costly stockouts or overstocks, and 94% have enhanced their fraud detection capabilities in response to rising online threats. As AI continues to prove its worth in critical areas like inventory management and security, the pressure to adopt these technologies also is mounting. Whether by carrot or stick, all signs point to upgrading.<\/p>\n Much of this urgency comes from the pressing need to improve customer experience (CX): 79% <\/strong>of executives are investing heavily in technologies that elevate CX, which is the bare minimum in today\u2019s omnichannel world. Features that were once cutting-edge, like buy online, pick up in-store, are now table stakes. Consumers demand immediacy, particularly among younger generations, and savvy business leaders like Ulta and DoorDash are listening, prioritizing the patronage of the shoppers of the future.<\/p>\n But delivering a great customer experience hinges on more than just strategy\u2014it requires seamless user experiences (UX) at every touch point. We know that smart, strategic UX can boost conversion rates by 400%<\/strong>. But the flip side? A poor UX can drive 89% <\/strong>of customers to your competitors. Retailers are losing customers not because of lack of product, but because they\u2019re technologically deficient.<\/p>\n One major holdup to mass adoption? Poor leadership structures. There is a long tradition of companies being held back by outdated attitudes in the C-suite. Many executives come from backgrounds where they simply don\u2019t grasp the urgency or nuances of digital technology. They defer, delay or worse \u2013 choose the wrong tech because they rely on faulty advice.<\/p>\n There\u2019s another related issue at play here: fear<\/strong>. Large enterprises are complex, and no executive wants to be the one to touch an aging IT system and knock down the house of cards. It\u2019s easier to accept cushy perks from legacy providers and punt the problem to the next CIO.<\/p>\n The reality is that a true digital transformation requires a level of foresight and investment many leaders are simply unwilling to embrace. Anyone tuned into the business landscape can see the tides are shifting toward composable commerce and that one-size-fits-all models are on their way out. Risk-averse actors might be waiting until they have a \u201csure thing,\u201d at which point they will be irreparably behind those who have proactively met the moment by embracing digital transformation head on.<\/p>\n Transformation doesn\u2019t mean ripping out entire systems overnight. One of the biggest misconceptions is that digital transformation requires a massive, all-or-nothing revamp. That thinking is outdated. The future is composable \u2014 an incremental, modular approach that allows businesses to evolve without reinventing the wheel.<\/p>\n According to a recent study, 91% of businesses already use or are considering using composable commerce solutions. But for those that fear the cost or complexity of digital transformation, the good news is that modular, composable solutions are more accessible than ever. You don\u2019t need to write a massive check to start \u2014 you can begin with a modest pilot and scale up. This is not a giant leap into the unknown, but rather the first in a series of steps with intention.<\/p>\n Smart companies aren\u2019t necessarily making sweeping changes \u2014 they\u2019re solving specific problems with solutions that last. Whether it\u2019s upgrading search functionality or launching a new CRM, the key is starting small, piloting new technologies and iterating rapidly. The era of once-a-year updates is in the past.<\/p>\n 2025 will be a defining year for many. Business leaders who continue to rely on outdated technologies risk not only their company\u2019s market position but also their own careers, as organizations increasingly seek skills in modern, flexible technologies.<\/p>\n Organizations that fail to modernize are at risk of extinction, with more agile, digitally native competitors disrupting entire industries. In companies that recently migrated to a composable platform, 67% cited the ability to compete with their peers as the key motivator. For many of them, this year will be one of reaping the benefits.<\/p>\n There\u2019s no longer a question of whether to invest in tech, only how long companies can afford to wait. The choice for C-suite leaders is stark: take steps now, or risk falling behind in a market that waits for no one. In this environment, the real risk isn\u2019t adapting \u2013 it\u2019s complacency. <\/p>\n Kelly Goetsch is an advisor for <\/em>Commercetools<\/em>. He previously served as the company\u2019s Chief Strategy Officer and prior to that he was the Chief Product Officer at Commercetools for nearly six years. Goetsch is an industry thought leader who champions Commercetools\u2019 unique MACH (Microservices, API, Cloud-Native, and Headless)-based architecture, and he co-founded the MACH Alliance, a group of 100+ independent, future-thinking tech companies dedicated to advocating for open, best-of-breed technology ecosystems. Prior to Commercetools, Goetsch held senior-level product development and go-to-market responsibilities at Oracle and held the role of Senior Architect ATG (acquired by Oracle), where he was instrumental to 31 large-scale ATG implementations.<\/em><\/em><\/em><\/p>\n<\/p><\/div>\nThe Driving Force of Customer Experience<\/strong><\/h3>\n
Why isn\u2019t Every Company Moving Forward?<\/strong><\/h3>\n
The Solution: Incremental Progress, Not a Big Bang<\/strong><\/h3>\n
The Stakes: Innovate or Face Extinction<\/strong><\/h3>\n
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