Event Driven Architecture for E-Commerce

Photo by Hanna Morris on Unsplash

Advanced Optimization for Digital Commerce Platforms

A quick guide to how B2B and B2C companies can benefit 
from implementing event driven architecture to orchestrate their digital commerce operations, increase customer loyalty and boost profitability

• Composable commerce — the enabler of event driven architecture 
• How does event driven architecture work?
• How does event driven architecture impact your customers?
• The benefits of implementing event driven architecture

• The benefits of using GAPs
• The ultimate goal: automated commerce

• How B2B companies benefit from event driven architecture
• How B2C companies benefit from event driven architecture

Executive summary

Digital commerce should be easy: you sell and ship the right products to your customers and make a healthy margin on each sale. But as we know all too well, in order to retain existing clients and win new business the reality is far more complex.  Evolving customer expectations, increasing competition, and changes or disruptions in supply chains are all pushing your organization to be more agile and responsive than ever before.

It's increasingly difficult to keep pace with these changes using traditional, monolithic commerce platforms. These legacy systems were simply not designed for rapid customization and adaptability.  Nor were they designed to support or respond to the real-time data and changes that can make the difference between a successful sale and a lost customer.

With critical information spread across your bricks-and-mortar sites, ERP, data centers, cloud deployments and more, it’s an ever-growing challenge to get the consistent, trusted, always-updated overview of your digital commerce operation that’s needed to enable fast, personalized responses to customers’ needs.

To make your organization more responsive, its IT architecture needs to recognize important real-time data on ‘events’ – such as a customer placing items in their shopping cart, a stock-level notification, a delivery update, a payment, and so on – across the business, and enable automated actions to be made based on those events.

An architecture that can continuously process real-time event data as it is produced, and automatically orchestrate responses to those events, enables you to accelerate key digital commerce operations including:
●      Adjusting product pricing more efficiently, based on stock levels, market costs, and customer demand to maximize sales
●      Introducing new products faster and increasing stock turnover
●      Offering added value to individual customers with personalization and targeted promotions to boost loyalty
●      Automatically initiating shipping of products
●      Notifying suppliers about product demand

This agility enabled by an event-driven architecture (EDA) helps you to respond to changes as they occur, automating and enhancing customer experiences to deliver real business value, gain competitive advantage, and maximize your profitability. 

In this article, we will explain what an EDA for digital commerce is, the benefits it delivers, and how you can approach building and deploying an EDA in your organization to boost efficiency across your entire operation to accelerate innovation and meet your key business goals faster.

1. What is Event Driven Architecture?

Composable commerce — the enabler of event driven architecture

Many organizations are still using monolithic solutions for their digital commerce operations, but they are recognizing that they need more customizability and flexibility than their current architectures can support.  At best, adding new functionality often proves to be a major programming effort, which carries significant expense as well as the risk of outages and downtime. At worst, adding that desired new feature may not be possible, simply because their monolithic solution may not allow it.

So it’s no surprise that in a 2022 survey of B2B and B2C eCommerce organizations, we found that the overwhelming majority of respondents acknowledged that being tied to a specific software vendor and operating on a monolithic, static platform comes with severe limitations.  90% said they were already actively planning to update or upgrade their eCommerce operations, with over a third (35%) saying they were planning major extensions to their platforms.

Respondents recognized that many of the new features and changes they required couldn’t be achieved using monolithic platforms, and they wanted the freedom to compose their own solutions. They also stated that to achieve this, their approaches to digital commerce needed to change to a more modular architecture that could unlock the ability to keep up with the rapid pace of market changes and fluctuating customer demands, and make it easier to interact with their ecosystem of partners’ and suppliers’ technologies. 

According to Gartner, this ‘composable’ approach uses modular, cloud-native capabilities to move toward future-proof digital commerce experiences, selecting best-of-breed solutions and assembling them to fulfill exact business needs.  Gartner predicted that “organizations that have adopted a Composable Commerce approach will outpace the competition by 80% in the speed of feature implementation.” That speed and flexibility generates competitive advantages for businesses.  And this composable approach is also the enabler of the next stage in making digital commerce truly dynamic, helping retailers to realize significant cost savings, optimize supply chain efficiencies, and strengthen customer loyalties. That next stage is event driven architecture.

How does event driven architecture work?

Event driven architecture (EDA) builds on composable commerce’s ability to add features or swap out applications seamlessly, and further accelerates and automates commerce processes by supporting truly real-time, event-driven actions. 

With EDA, a time-sensitive ‘event’ (such as a customer placing an order, stock-level notifications, delivery updates, or payments) is used as the trigger for applications and services in your commerce architecture to talk to each other. The event data from the original application is routed to other related applications or services, which in turn perform actions automatically based on that data.

EDA enables business flows to be dynamically orchestrated in real time, based on each specific event and its requirements.  This immediate response is critical in digital commerce where events such as customer transactions, inventory counts, or personalized offers are always time-sensitive.  After all, if your business doesn’t respond quickly to a customer-related event, that customer may well be tempted to take their business elsewhere.  Real-time, automated responses to events are the key to competitive advantage – which in turn leads to greater revenues and profitability.

How does event driven architecture impact your customers? 

Here’s an example of how an EDA works in a digital commerce environment, contrasted with a traditional monolithic platform approach.

Jon visits an E-Commerce site and adds multiple items to his cart.  He then goes to the checkout page, fills in his address and payment information, and places his order.  But what happens next?

The monolithic approach

With a legacy architecture, Jon’s order is typically processed in a stop-start manner.  His order is first entered and stored in a database. At some point – either later the same day, or even the next working day – a script or person queries that database for new orders.  Jon’s order is seen and the order payment is processed. Another script or person in the company’s warehouse then queries the database and starts the packing and delivery process.

Those delays while Jon’s order waits to be processed can create bottlenecks in operations, especially if there is an unexpected spike in order activity. Further, this approach to handling payments and fulfilments is slow and error-prone – especially if manual intervention is needed at any stage to process data.

The event-driven approach

With an EDA, services such as the E-Commerce site, order validation, stock management, payment processing, and fulfillment can be from multiple different vendors to suit the organization’s needs.  Each service produces and consumes data on new events (such as Jon placing his order), and the event data is filtered and pushed to the relevant services automatically by an event router.

Jon’s order is processed like this:

1. His order is entered into a database, which immediately sends event data to the event router.
2. The event router looks up which services should handle this type of event (such as payment processing and fulfillment).
3. The event router notifies the payment processing service, which calls the company’s payment processor with Jon’s payment data.
4. When the payment is authorized, the payment processing service sends a ‘payment authorized’ event to trigger an order confirmation email to Jon, and to the warehouse for fulfillment.

In this case, the order moves automatically through to fulfillment with no need for manual intervention and no delays, while also minimizing the risks of errors being introduced.

EDA is just as efficient in handling more complex transactions than the simple example above.  Another scenario could be that Jon is a regular customer of the company, and does not pay for an order during checkout but is invoiced monthly. 

In this case, the order is processed like this:

1. His order is entered into a database, which sends the event data to the event router.
2. The event router looks up which services should handle this type of event (in this case, stock control, the ERP system or finance system).
3. The event router notifies stock control and the ERP / finance system of Jon’s order.
4. If Jon’s company’s credit is good, the ERP / finance system updates Jon’s account and sends a ‘clear to send’ event to the warehouse for fulfillment.
5. If stock is not available to fulfill Jon’s order, the stock control system sends an event triggering the eCommerce UI to notify Jon and offer a smaller quantity, or substitutions.

All of the services and solutions in the EDA are integrated via APIs.  In effect, the event router is the brain of the EDA, and the APIs are its nervous system, enabling the various services to integrate and interoperate seamlessly based on the event data that each service creates and receives.  
 
It’s also important to note that an EDA offers complete flexibility, so that if process flows change due to introducing new suppliers or delivery partners, your entire digital commerce operation does not have to be taken offline to make these changes. You only need to change the specific process flow, ensuring the overall customer experience is maintained with minimal or zero interruption to services.  So, instead of buying a new car because you want an electric rather than a petrol engine, in this analogy you only need to replace the engine, not the whole car.

The benefits of implementing event driven architecture

An EDA is ideal for digital commerce as the majority of companies already have a mix of solutions and services deployed from a range of different vendors to handle the various functions across their operation. In fact, these different solutions and services benefit from being decoupled from each other and simply communicating via the EDA event router because:

• Decoupling allows for faster development cycles, as each service in the architecture can be developed independently from the others
• Each service can be scaled independently to meet the organization’s specific needs
• Response times for each service are faster, as they operate independently from each other
• Fault handling and problem-solving is easier and quicker than in a monolithic architecture: if a service fails in a monolithic platform, then it can have a chain-reaction effect on related services. However, if a given service fails for any reason in an EDA, then other services will not be affected. The EDA event router will simply store the event until the relevant service is available again. This feature also enables EDAs to easily accommodate surges in traffic or workloads during busy periods, without causing the entire digital commerce system to crash.

In turn, the EDA enables you to enhance and optimize your business by: 

• Leveling-up sales performance across your digital commerce channels by delivering enhanced, automated E-Commerce customer experiences
• Supporting and delivering customized interactions with customers using automated business scenarios
• Enabling you to react in real-time to evolving sales environments and demands
• Helping speed up the introduction of innovative new services to stay ahead of your competition

2. GAPs / iPaaS: How automation platforms support event driven architecture

“We often hear from our prospective customers that they have purchased dozens of different software solutions and struggle to make them work together. This is where iPaaS comes into play – and why we have built an integration with Make©." — Stefan Schmidt, CTO at Emporix.

So far, we’ve described what an EDA is, how it works, and outlined the benefits it can deliver to your business. But how do you approach developing and deploying an EDA in your organization?

The most efficient, feature-rich and cost-effective method is to use General Automation Platforms (GAPs), also known as an integration Platform-as-a-Service (iPaaS) offering. GAPs are cloud-based platforms for integrating software applications and services that are deployed in different environments – for example in cloud instances, and in an organization’s on-premise systems. With GAPs / iPaaS, users can quickly and easily develop integration flows that connect applications wherever they reside, without needing to install or manage hardware or middleware.

These features make GAPs particularly well-suited to digital commerce environments, where many companies have a variety of systems (both cloud and on-premise) which store and process critical data, such as finance systems, ERP, warehousing systems, eCommerce and more. Sharing, utilizing and acting on the data in each of these systems which are often ‘siloed’ from each other is critical to the success of an organization’s digital commerce operation if it’s to deliver a flexible, optimal and streamlined customer experience, enable the company to react quickly to changes, and maximize revenue potential and profitability.

The benefits of using GAPs

The traditional approach to systems integration involved developing code that connects one system directly to another.  However, these ‘point’ integrations can be difficult to develop and maintain, and lack robustness and scalability, making them a potentially risky point of failure for a real-time commerce operation.
GAPs provide an easy, standardized set of tools to enable and support low-code, no-code integration of software and services irrespective of where they are based, using an extensive range of APIs.  With this ‘API first’ approach, GAPs allow you to access multiple systems from different vendors regardless of location, extract their data and ‘events’, and combine them to automate and orchestrate new processes in real time.

The benefits of using GAPs as the basis for an EDA deployment are:
●      New project development is accelerated: GAPs use a visual Graphical User Interface (GUI) with no requirement to understand programming languages in order to integrate software and services, helping to quickly unlock new revenue opportunities
●      Managing automated data and event flows between systems is easy: using a highly visual GUI, changes can be made on-the-fly by digital commerce managers
●      Integrations between systems are done without impacting or having to change how those systems function:  this dramatically reduces the risk of downtime or system outages
●      Projects can be reconfigured and scaled dynamically, in real time:  to suit your evolving business needs or market demands, making your business more agile and responsive
●      GAPs boost efficiency by enabling workflow automation:  crucially, workflow automation supported by GAPs, and using a visual builder tool, helps to eliminate errors arising from manual data entry and correlation tasks. This increases speed and accuracy and, by cutting out errors associated with these tasks, you improve the customer experience

The ultimate goal: automated commerce

The last point above, on how GAPs enable workflow automation, is the key operational benefit of using them to enable EDA. The platform gives you a visual tool managed through a highly interactive, drag-and-drop GUI (such as the Emporix Make app) which enables you to fully automate and orchestrate repetitive, labor-intensive tasks without needing to touch a single line of code.

Using the low-code, no-code visual builder tool, business managers can create their own event-driven automated workflows comprising a series of predetermined actions, triggered by specified events or circumstances, then execute them across multiple platforms. This enables faster reactions to events, avoids human errors, and enables teams to focus on creating and delivering a better customer experience.
Let’s take a closer look at some specific use cases in B2B and B2C eCommerce that benefit from the workflow automation and orchestration enabled by GAPs and EDA.

3. Example use cases of event driven architecture for B2B and B2C companies

Both B2B and B2C operations have their own requirements and complexities, but both benefit equally from the automation and orchestration made possible with EDA.  Here are some examples of B2B and B2C operations that can be quickly and easily transformed into automated workflows, to improve order handling, cut costs and enhance customer experience:

How B2B companies benefit from event driven architecture

1. Save time and improve data quality through order process automation

When a B2B customer places an order via your commerce site, several actions need to happen behind the scenes, such as sending data to your ERP, updating stock data, notifying the customer of shipment dates, and so on.  Automating all of these actions saves time and eliminates data-entry errors. This automation can also beneficially extend to internal systems such as your CRM and accounting software, and externally to partners such as shipping and fulfilment providers.

2. Optimize your inventory levels

Effective inventory management is critical to successful digital commerce:  stock levels must closely match with demand or you risk either running short, or holding too much stock. EDA automates the process of notifying when stock levels are too low or too high so that the appropriate action can be taken quickly.

3. Maximize ROI by promoting the right products

Automated marketing and pricing can be closely linked to inventory tracking.  For example, a fast-food consumables supplier has too many paper cups in its warehouse, and wants to sell them quickly to reduce stock-holding. The supplier uses their EDA to orchestrate their services to enable this to happen:  the supplier’s Web search provider is updated to boost search rankings for the cups to maximize their promotion;  the supplier’s eCommerce platform’s pricing service can automatically discount the pricing on the cups to a level that suits the vendor’s immediate need while retaining margin;  and promotional banners for the product can be activated on the commerce site too.

The parameters for this type of special offer can be pre-defined, so that the process happens automatically and crucially, in real time, when certain events are triggered or thresholds are crossed.

4. Automate customer onboarding for easy scaling

Vendor and supplier onboarding processes vary, and often require input from decision-makers, which needs to be coordinated.  Automating critical steps, such as issuing and processing documentation, performing relevant checks and more, saves staff time and reduces the risks of errors from manual data entry.
Improve customer retention with targeted marketing initiatives

EDA helps you gain visibility of who your most active and most loyal customers are, so you can accurately and reliably perform targeted marketing initiatives to deepen those relationships. Customers can be tagged based on their overall spend or spend frequency with you, and your customer service team notified so that promotions can be triggered. The end-to-end visibility and orchestration enabled by the EDA ensures that the correct decisions are made automatically, based on stock levels and fulfillment times to ensure that promotions run effectively with minimal need for intervention. 

5. Streamline price negotiation and approvals process for faster order placing in B2B context

B2B purchases are frequently negotiated on an individual basis, depending on the size of order, the goods being ordered, the customer’s credit and more.  Automation via the EDA allows you to have a clear, real-time picture of the current status of ongoing transactions with each customer, so that you can make the right calls when handling the order negotiations, with approvals and prompts for action being routed to the correct decision-makers depending on the order’s scale.

6. Improve customer experience by automating the returns management

The returns process can vary from customer to customer, depending on whether exchanges or refunds are offered.  By linking your ERP, CRM and E-Commerce systems, EDA ensures that returns processes run as automated and as smoothly as possible, with only exceptions being flagged for intervention.  This is key to a good customer experience.
 

How B2C companies benefit from event driven architecture

In addition to the B2B examples above, EDA workflow automation delivers real benefits to B2C companies:

1. Improve ROI from marketing incentives

Offering the same incentives to all customers will simply burn through your marketing budget and not create the impact you envisioned.  Instead, you should offer the right incentives to the right customers, whether those are discounts, coupons, referral or loyalty programs, at the right amount and at the right time to minimize your marketing spend and maximize the impact of your campaigns. To determine which customers should receive which incentive at which time, you need your various software solutions to communicate with each other and orchestrate the promotion, publishing and shipping. For example, if a customer leaves some items in their basket, creating a personalized coupon code for 20% off the items in their cart that works on all sales channels (mobile app, website), that expires in 24h and sent to them via email and SMS will encourage the customer to purchase the items and increase revenues with minimal additional marketing effort. 

2. Decrease losses by identifying high-risk orders

If your business involves selling bespoke products, such as customized printed goods, then you’ll know the risks of taking a large order that is canceled after production is already under way, leaving you with a batch of unsaleable products.  With EDA you can set up automated alerts that notify your customer service team to review a potentially high-risk order before payment is taken and production started.  This ensures you won’t get stuck with thousands of incorrect ‘France:  World Cup Winners 2022’ commemorative items.

3. Improve customer experience through real-time stock management

It’s a fact of life in retail that items go out-of-stock sometimes. Most consumers are fine with that – but the message needs to be communicated to them in the right way.  Few things turn a consumer off more than seeing the item advertised, finding it on your eCommerce site, and trying to buy it only to find it’s not available.  With EDA, low-stock or out-of-stock products can be automatically hidden from your online store and banner adverts until new stocks arrive.  When stocks are replenished, the items are republished on the store and advertising resumed.

With the EDA linking to your inventory management system, stock thresholds can be set to automatically trigger reorder requests with your supplier.

Summary

Digital commerce is about making your business easier to do business with.  An event driven architecture enables you to digitize your organization’s value proposition and automate key processes, to streamline and optimize your operations.  This in turn helps you deliver a better customer experience, enables you to react faster to external events, supports innovation to stay ahead of your competition, and maximizes your profitability.

Using Emporix as the basis for your EDA gives you the freedom to choose the services and software you want to use, whether they are existing technologies or new, cloud-based or on-premise, and allows you to adapt and scale your IT ecosystem to meet tomorrow’s demands – while maintaining full control of your digital commerce operations at all times.

If you're ready to rethink your approach to digital commerce, then contact Emporix to find out how we can help you make your business more agile and future-proof.