The Total Economic Impact™ Of Salesforce Commerce Cloud Composable Storefront
Cost Savings And Business Benefits Enabled By Composable Storefront
A Forrester Total Economic Impact™ Study Commissioned By Salesforce, February 2024
Retailers need to create commerce sites that are fast, flexible, and adaptable to changing consumer preferences. Salesforce Commerce Cloud Composable Storefront decouples the front- and back-ends of e-commerce solutions, creating a more modular and scalable architecture. This allows developers to operate more effectively and offers digital teams and shoppers improved storefront performance. The Composable Storefront gives retailers a headless front-end and the ability to deliver consistent experiences across different channels and devices, create sites that drive better conversion, and reduce technical debt.
Salesforce Commerce Cloud Composable Storefront supports organizations that want to improve their digital experiences and create a headless digital storefront. Composable Storefront enables developers to innovate, experiment, and create experiences that drive higher conversion. Composable Storefront uses progressive web application (PWA) architecture for a flexible and efficient front-end that decouples the customer-facing presentation layer from the backend e-commerce functionalities. Decoupling these layers enables organizations with choice to independently select best-in-breed vendors for creating the user interface (UI) and user experience (UX) across various digital touchpoints or leverage native Commerce Cloud capabilities. Composable Storefront is the newest B2C storefront framework offering, improving on previous SiteGenesis and Storefront Reference Architecture (SFRA) front ends. Organizations can leverage any Commerce Cloud storefront independently or blend multiple storefronts together in a single site using a hybrid methodology. There are no additional licensing costs to adopt Composable Storefront.
Salesforce commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Composable Storefront.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Composable Storefront on their organizations.
Return on investment (ROI)
271%
Net present value (NPV)
$7.46M
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Composable Storefront. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization.
Interviewees said that they adopted Composable Storefront to improve their ability to adapt to changing customer expectations, reduce storefront maintenance costs, improve site performance, and have more options with a modular architecture.
After the investment in Composable Storefront, the interviewees said their organizations’ development teams were able to do more without increasing headcount, improved site performance, improved customer experience and conversion rates, and reduced technical debt costs.
Key Findings
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
- Accelerated time to market and more than doubled developer capacity. With a headless front end, the composite organization’s development team can release updates and new features more quickly, improving their continuous integration and continuous delivery (CI/CD) process. Enhanced flexibility, modular components, automation, and insights drive better productivity, more experimentation, and better outcomes. Over three years, the additional developer capacity is worth $2.85 million to the composite organization.
- Better customer experience increased conversion rates by 5 basis points. Improvements to site performance, SEO scores, control over merchandising, and immersive experiences all contribute to a better customer experience, driving up conversion rates on mobile and web. Moving from a 2.5% conversion rate to a 3.0% conversion rate drives 20% more revenue for the composite organization over three years and is worth $7.09 million in additional profit to the composite organization.
- Reduced front-end tech debt by up to 25%. The reduction of tech debt and reliance on third-party service contracts enabled the composite organization to consolidate and decommission pieces of the legacy environment. Over three years the reduction in tech debt is worth $264,000 to the composite organization.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
- Improvements to the developer experience.
- Improvements to talent attraction and retention.
- Improvements to accessibility.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
- External licensing costs total $1.09 million. The composite organization incurs no external costs for the licensing of Salesforce Composable Storefront and no additional cost for hosting the headless site. The composite organization leverages its existing investment in B2C Commerce and native commerce platform capabilities like Business Manager and chooses to integrate a content management system (CMS) and a search tool to support its front-end experience.
- Internal implementation labor and system integrator (SI) costs total $1.50 million. Thirteen internal business and technical resources dedicate a portion of their time to implementation over the course of nine months to the implementation of Composable Storefront alongside a SI.
- Training and ongoing management total $157,000 over three years. Upskilling existing resources and a portion of a Salesforce administrator are included in the composite organization’s ongoing costs for Composable Storefront.
Results. The representative interviews and financial analysis found that a composite organization experiences benefits of $10.21 million over three years versus costs of $2.75 million, adding up to a net present value (NPV) of $7.46 million and an ROI of 271%.
Key Statistics
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Return on investment (ROI)
271%
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Benefits PV
$10.21M
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Net present value (NPV)
$7.46M
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Payback
6 months
Benefits (Three-Year)
Increased developer capacity Improved conversion profit Legacy technology savingsTEI Framework And Methodology
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering implementing Salesforce Composable Storefront.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Salesforce Composable Storefront can have on an organization.
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Due Diligence
Interviewed Salesforce stakeholders and Forrester analysts to gather data relative to Composable Storefront.
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Interviews
Interviewed four representatives at organizations using Composable Storefront to obtain data about costs, benefits, and risks.
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Composite Organization
Designed a composite organization based on characteristics of the interviewees’ organizations.
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Financial Model Framework
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
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Case Study
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Disclosures
Readers should be aware of the following:
This study is commissioned by Salesforce and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Composable Storefront.
Salesforce reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Salesforce provided the customer names for the interviews but did not participate in the interviews.
Consulting Team:
Veronica Iles
Kara Luk
Drivers leading to the Composable Storefront investment
Interviews
| Role | Retail Type | Region | Revenue | Employees |
|---|---|---|---|---|
| Chief technology and logistics officer | Workwear apparel | US HQ and operations | $653 million | ~2,500 |
| Product manager | Cosmetics | US HQ; global operations | 578 million | 340 |
| Global EVP of technology and innovation | Apparel | US HQ; global operations | $45 million | ~100 |
| Head of e-commerce | Footwear | US HQ and operations | $1.2 billion | 5,400 |
Key Challenges
Before adopting Salesforce Composable Storefront, the interviewees’ organizations built their commerce sites using a templated, full-stack approach with SiteGenesis or Storefront reference architecture (SFRA), and one organization outsourced their commerce front end. The interviewees noted how their organizations struggled with common challenges, including:
- Needing to better meet changing customer expectations. Interviewees were aware that the customer experiences created by their legacy sites were failing to meet customer expectations for an app-like experience, including fast page loading, smooth navigation, and the ability to work offline. As the evolution of their legacy architecture did not readily support major shifts, they were failing to keep up with the changing customer expectations. The chief technology and logistics officer at a workwear apparel retailer shared: “We were a scrappy catalog company 15 years ago when we put an online catalog on SiteGenesis. And that’s the site we evolved as we grew, and so the logic and the maturity [of our commerce site] reflects those catalog origins. But they were not malleable enough to allow us to create the consumer experiences that we need today.”
- Costly legacy site maintenance and support costs. Interviewees noted that whether they relied on internal developer resources or outsourced to a third party, maintaining the legacy front end required significant resources. The head of e-commerce at a footwear retailer shared, “The status quo carried a lot of cost because, while my engineers could do a little bit of the lifting, for the vast majority of it, we were spending hundreds of thousands of dollars for other partners to do the things that we couldn’t fully do ourselves.”
- Difficulty adapting due to complex customizations. Although their legacy architecture models were designed to be customizable, after years of customizing their headed legacy architecture, interviewees found that they were faced with increasingly brittle applications and inefficient point-to-point connections. The chief technology and logistics officer at a workwear apparel retailer shared: “[Our prior environment] was a very highly customized system with inefficient point-to-point connections feeding it data and leveraging data out of it. With the way that it was constructed, it was very difficult to do things like AB testing. The front end was overly complicated and there was a lot of bad hard coding.”
- Underperforming site speeds. Interviewees found that their legacy sites were not meeting performance expectations and were negatively impacting the customer experience. Efforts to improve site load times often misfired. The product manager at a cosmetics retailer shared: “As our lead engineer would call it, [our prior environment] was ‘death by a thousand scripts.’ The more we kept implementing JavaScript onto our site, the more we could see performance go down. The more we put pixels into our data layer, the more we could see performance go down.”
Investment Objectives
Salesforce presented Composable Storefront as a new modern storefront solution for B2C Commerce, and the existing customers chose to adopt it with the following goals:
- Accelerate speed to market. Interviewees said that when it comes to commerce development, they need to move fast and have an iterative approach. The head of e-commerce at a footwear retailer shared: “We are working off short runways throughout the year, so we don’t have the luxury of a nine-month [development] runway. We have to be looking at what we need to do for tax season, for back to school, and then for the holidays. We have to be able to develop features quickly, get them live, learn from them, and then make adjustments before we’re in peak selling season. We don’t have three months to refine the perfect solution.”
- Provide customers with personalized and relevant multichannel experiences. To provide customers with personalized, relevant experiences, interviewees knew they needed to leverage the customer data and content within Salesforce. The chief technology and logistics officer at the workwear apparel retailer said: “We understood that in order to compete going forward, we needed to evolve to be a true omnichannel retail organization with the consumer at the center. That required different foundational capabilities, one of which is to really talk in a hyperpersonalized and authentic way to our customers, and that was not possible in our old platform. We needed something that could be more responsive, that could travel with them whether they were on desktop or on their mobile, and that could be more hyperpersonalized to their needs in the moment. That was the catalyst for [adopting] the new commerce [architecture].”
- Modernize the mobile customer experience. With significant traffic coming through mobile but only a portion of conversions, interviewees said they wanted to use Composable Storefront to elevate and modernize their customer experience, especially on mobile. The global EVP of technology and innovation at an apparel retailer shared: “[The retailer] has been on a journey to elevate the brand. … So, we wanted to make sure from a brand and experiential standpoint that we can push the boundaries as much as needed.”
- Select best-in-breed components. Interviewees highlighted the goal to use the disconnected front end to plug and play with various vendors and Salesforce components, selecting those that that their organizations considered best in breed. The global EVP of technology and innovation at an apparel retailer said: “Composable brings robust capability because it sits on top of things like Business Manager, which is really best in class. We wanted the merchandising and promotions engine components to be best in class because they’re critical for driving the business.”
- Amplify the ROI from the Salesforce platform investment with data connections and AI options. The interviewees noted their organizations had large investments in their Salesforce platforms from Sales and Service to Marketing and Commerce Clouds. Interviewees identified that Composable Storefront would be a way to amplify their investments by connecting data. Interviewees were also interested in expanding into new capabilities that Salesforce is building with AI. The global EVP of technology and innovation at an apparel retailer shared: “We are multicloud customers and we wanted to make sure to take advantage of the connections, data infrastructure, and the direction that Salesforce is moving in with Data Cloud. They are enabling us to have a strong data foundation to push into AI.”
Composite Organization
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the four interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite organization is a retailer that is headquartered in the United States and has global operations. It generates $700 million in annual revenues, 60% of which are derived from online sales. There are 1,500 employees worldwide. The average order value (AOV) is $110.
Deployment characteristics. The e-commerce team includes eight developers. The composite organization adopts Composable Storefront with the initial goal of applying it to customer-facing experiences like product landing pages. By the third year of the investment, 100% of the front-end site is composable. This incremental approach allows the composite to iterate at its own speed, begin to realize value, and increase skills of the internal e-commerce development team.
Quantified benefit data as applied to the composite
Total Benefits
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Increased developer capacity | $1,020,000 | $1,173,000 | $1,275,000 | $3,468,000 | $2,854,621 |
| Btr | Improved conversion profit | $2,851,200 | $2,851,200 | $2,851,200 | $8,553,600 | $7,090,512 |
| Ctr | Legacy technology savings | $81,000 | $108,000 | $135,000 | $324,000 | $264,320 |
| Total benefits (risk-adjusted) | $3,952,200 | $4,132,200 | $4,261,200 | $12,345,600 | $10,209,453 | |
Increased Developer Capacity
Evidence and data. Headless commerce architecture allows developer teams to make quick changes to their customer experiences without having to deploy those changes along with the entire back-end commerce engine, i.e., they avoid painful upgrades to deliver new features.2 After adopting Salesforce Composable Storefront, interviewees measured a positive impact on their front-end development teams. Interviewees shared several ways that Salesforce Composable Storefront improved the capacity of their development teams:
- Accelerated speed to market with enhanced flexibility of loosely coupled APIs. Interviewees said that their developer teams took advantage of front-end independence to make changes to their sites more readily. They pointed to the ability to release more features, more frequently in a way that their prior environments didn’t support. For the head of e-commerce at a footwear retailer, compared to their heavily customized prior environment, Composable Storefronts enabled them to make changes to their front end without breaking other pieces of their front- or back-end environments. They shared: “Every time that we touched checkout or anything that had any complexity associated with it, we would end up breaking three or four more things. Then, when we broke three or four things, we’d go after the most important of those four, and then something else would break as a result. So, you’ve got the three issues you didn’t fix now coupled with four new issues, and so I’ve got seven issues, and over time it magnified, and that debt snowballed.”
- Modular components empowered developers to experiment more. Interviewees shared that having a modular and disconnected front end enabled them to innovate with less fear of unintentionally introducing errors or issues. With Composable Storefront, the developers could experiment with site experiences and compare by using data and insights, allowing them to move forward with the most impactful experience. The chief technology and logistics officer at a workwear apparel retailer shared: “It allowed us to experiment better because we can swap out modules. It drove innovation for us and facilitated our desire to be more of a test and learn organization. The modularity allows for faster development and deployment of new features. It makes it easier to try new customer-facing things”.
- Automations increased developer productivity. Interviewees said that their developer teams were relatively small with the size of the teams ranging between two to 15 people. With mandates to grow the e-commerce businesses profitably, teams needed to do more without adding headcount. Interviewees shared that automations, flexibility, and out-of-the-box components enabled them to do more with their small teams. The chief technology and logistics officer at a workwear apparel retailer said: “Our [developer] team is incredibly small for a group that supports a $500-million-dollar online business. Four developers support multiple factors, whether it’s mobile or desktop. [Composable Storefront] allows us to more quickly integrate third-party components so that we can construct solutions rather than having to write everything ourselves. Reusability has increased for us as a result.” The chief technology and logistics officer added: “We’ve experienced the most lift from the test, build, and release automations. Because it’s very composable, we’re able to test modular functionality discreetly, which is more efficient.”
- More timely insights enabled informed decision making. Instead of relying on limited testing, historical data, or gut instinct, interviewees were empowered by Composable Storefront with more timely insights that revealed when experiments were successful. The head of e-commerce at a footwear retailer said: “We have great ideas, but not all of those ideas are profitable. [Now] we can get them out there very quickly and see if they have the impact that we expected. If we have signals that indicate an idea is profitable, we will invest further in it. We can rapidly make those decisions; we don’t have to wait.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization has eight developers on the e-commerce team that are directly impacted by the Salesforce Composable Storefront investment.
- In the prior environment, these developer resources were at full capacity running the composite organization’s existing e-commerce sites.
- After the investment in Composable Storefront, the developer team realizes productivity gains and additional capacity due to the solution’s automations, flexibility, insights, and modern React development framework. The composite’s developer team increases its capacity by 200% in Year 1, 215% in Year 2, and 225% in Year 3, effectively more than doubling the team’s output.
- The average burdened cost of a developer is $150,000.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this benefit will vary depending on the following:
- The maturity of the digital team. Existing skill sets with software frameworks and familiarity with the Salesforce platform will determine how steep of a learning curve the developers will face and impact the additional capacity that they are able to realize.
- The burdened cost of developer resources. The size and type of company, location of the employees, and employee seniority will all factor into the burdened cost of the developer resources.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.85 million.
Developer Efficiencies
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|
| A1 | Size of development team | Composite | 8 | 8 | 8 |
| A2 | Capacity of developers in prior environment | Interviews | 100% | 100% | 100% |
| A3 | Capacity of developer team with Salesforce Composable storefronts | Interviews | 200% | 215% | 225% |
| A4 | Burdened cost of developer | Composite | $150,000 | $150,000 | $150,000 |
| At | Increased developer capacity | A1*(A3-A2)*A4 | $1,200,000 | $1,380,000 | $1,500,000 |
| Risk adjustment | ↓15% | ||||
| Atr | Increased developer capacity (risk-adjusted) | $1,020,000 | $1,173,000 | $1,275,000 | |
| Three-year total: $3,468,000 | Three-year present value: $2,854,621 | ||||
Improved Conversion Profit
Evidence and data. Forrester’s research finds that people spend the bulk of their mobile time in just four apps.3 So, while a mobile app may be important, its adoption is probably lower than e-commerce leaders would like. But anyone can discover and visit a website on their phone. E-commerce teams need to create seamless online and mobile experiences and mobile is ripe with opportunities to increase conversion. On average, conversion rates on mobile are about one-third of those on the desktop web. By decoupling the front end, businesses can expand their reach to various digital touchpoints and ensure a consistent brand presence and shopping experience wherever customers are.
Interviewees found that when they built their commerce sites using Composable Storefront, they created better customer experiences and consequently measured increased conversion rates. Interviewees shared several ways that Salesforce Composable Storefront drove increased conversion:
- Improved site performance speeds. By using a PWA architecture and caching frequently accessed data, interviewees noted they generally saw an increase in site speeds. The actual speed improvement varied between the interviewees’ organizations and was sensitive to choices made on the site. Faster site load times helped increase the amount of time that customers spent on the site and reduced bounce rates.
- Improved search engine optimization (SEO). Interviewees said that pages that load quickly are prioritized by search engines like Google. Interviewees found that by optimizing performance, their sites appeared higher in relevant searches. The chief technology and logistics officer at a workwear apparel retailer said: “[Composable Storefront] significantly improved our Google core web vitals which has implications for how we show up in search. Our SEO scores went up 10 to 12 points right off the bat.”
- Ability to pivot more quickly to optimize experience. Interviewees noted that they were able to react to information more quickly than in their prior environments. This enabled them to evaluate experiences on their sites and quickly decide if they were driving desired outcomes. The global EVP of technology and innovation at an apparel retailer said: “We can track sell-through and pivot in near real time if we’re not meeting sales expectations. [Composable Storefront] gives us more flexibility around custom landing pages and to really change up the experience to see if that drives sell-through. We have more control over how product is merchandised.”
- Created immersive experiences that connected across channels. Interviewees said that they were able to use Composable Storefront to deliver front-end content through APIs, which allowed them to use dynamic content updates based on user interactions and preferences to create more personalized experiences. The global EVP of technology and innovation at an apparel retailer shared how their organization ties together online and offline experiences using Composable Storefront. They said: “Creating an immersive experience is the true benefit of Composable. We’re doing a lot of offline branding moments that we can bring online in an immersive way that we haven’t been able to do before.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite has 8 million monthly impressions.
- Prior to adopting Composable Storefront, the organization had a mobile and desktop blended conversion rate of 2.5%.
- The composite measures an improvement of five points to its blended conversion rate.
- The average order value is $110.
- The composite estimates that the improvement to conversion rate is attributed only partially to Salesforce Composable Storefront, as other macroeconomic factors and additional technology investments are occurring simultaneously.
- The composite organization has a 12% operating margin.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this benefit will vary depending on the following:
- Conversion rates in the prior environment and room for improvement with optimization. A more nuanced analysis might be used to measure the impacts on mobile conversion separately from web conversion.
- Average order value and impressions will directly impact the amount of revenue created.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $7.09 million.
Improved Conversion Profit
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | ||
|---|---|---|---|---|---|---|---|
| B1 | Monthly impressions | Composite | 8,000,000 | 8,000,000 | 8,000,000 | ||
| B2 | Blended conversion rate in prior environment | Interviews | 2.5% | 2.5% | 2.5% | ||
| B3 | Point improvement to conversion rate with Composable Storefront | Interviews | 5 | 5 | 5 | ||
| B4 | Blended conversion rate with Composable Storefront | B2+B3/1,000 | 3.0% | 3.0% | 3.0% | ||
| B5 | Average order value | Composite | $110 | $110 | $110 | ||
| B6 | Additional revenue driven with Composable Storefront | B1*(B4-B2)*B5*12 months | $52,800,000 | $52,800,000 | $52,800,000 | ||
| B7 | Attribution to Composable Storefront | Composite | 50% | 50% | 50% | ||
| B8 | Income margin | Composite | 12% | 12% | 12% | ||
| Bt | Improved conversion profit | B6*B7*B8 | $3,168,000 | $3,168,000 | $3,168,000 | ||
| Risk adjustment | ↓10% | ||||||
| Btr | Improved conversion profit (risk-adjusted) | $2,851,200 | $2,851,200 | $2,851,200 | |||
| Three-year total: $8,553,600 | Three-year present value: $7,090,512 | ||||||
Legacy Technology Savings
Evidence and data. Digital business leaders tell Forrester they struggle with the costs of replacing legacy, customized, long-standing systems with modern technology.4 Many find it more affordable to continue to pay licensing fees for the legacy system plus subscription fees for cloud components. They then carve out pieces of the monolith to replace with components, evolving iteratively.
The interviewees’ organizations realized savings related to their prior environment once they moved to Composable Storefront. Interviewees shared the following examples:
- More easily connected best-in-breed vendors into the storefront. Compared to prior efforts to integrate third-party vendors point solutions or building point solutions themselves, the interviewees found that with Composable Storefront they could plug and play different vendors into the front-end without needing significant retooling on the back end. Two of the common headless integrations amongst the interviewees were Algolia and Amplience for search and CMS.
- Avoided tech debt associated with custom development. The head of e-commerce at a footwear retailer shared that their organization had previously attempted to create a headless e-commerce environment without using Salesforce. These efforts worked for a short period of time, but the level of customization required limited their flexibility and increased tech debt. They said: “[We] realized that everyone was going to a micro-front end. So [the developers] went headless and did a lot of custom work themselves to increase speed, to deliver capabilities, to respond quickly, to empower business users. But it ended up, like with all custom development, that they painted themselves into a corner. We did a great job of improving that experience and it made us some money, but it was a very brittle application and our ability to develop quickly, to learn quickly, to make adjustments was challenging because most of the time we were chasing tech debt.” With Salesforce Composable Storefront, the interviewee’s organization was able to build a composable front end with a solid foundation that helped them avoid over customization and subsequent tech debt.
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Avoided expensive professional services maintenance contracts. In their prior environments, some of the interviewees’ organizations were more dependent on third parties to provide ongoing maintenance and support for their commerce sites. With the adoption of Salesforce Composable Services, and the additional capacity realized by developers enabled the organizations to lessen their reliance on service contracts.
Beyond the cost of the partners, involving a third party also added layers of complexity and slowed response times. When this was the case, this interviewee said that they had no control over their own destiny when they relied on a professional services group to run their front end. The global EVP of technology and innovation at an apparel retailer said: “[In the prior environment,] if we needed to make any kind of UX/UI changes or nuanced merchandising, that was all professional services and were slow to turn around”.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- In the prior environment, the composite organization had measured an ongoing run cost of $600,000 a year related to front-end tech debt.
- After the Composable Storefront adoption, the composite organization takes an incremental approach to decommissioning legacy integrations. It also weans off the support of professional services engagements as contracts ended. Technical debt savings were 15% in Year 1, 20% in Year 2, and 25% Year 3.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this benefit will vary depending on the following:
- Hidden technical debt may increase the run costs of the legacy program.
- An organization’s ability to effectively consolidate and decommission legacy technology will depend on company culture, appetite for risk, and how well an organization adopts and uses the platform and processes.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $264,000.
Legacy Technology Savings
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | ||
|---|---|---|---|---|---|---|---|
| C1 | Technical debt to support prior environment front end | Composite | $600,000 | $600,000 | $600,000 | ||
| C2 | Percent of prior environment decommissioned | Interviews | 15% | 20% | 25% | ||
| Ct | Legacy technology savings | C1*C2 | $90,000 | $120,000 | $150,000 | ||
| Risk adjustment | ↓10% | ||||||
| Ctr | Legacy technology savings (risk-adjusted) | $81,000 | $108,000 | $135,000 | |||
| Three-year total: $324,000 | Three-year present value: $264,320 | ||||||
Unquantified Benefits
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
- Improvements to the developer experience. Developing or improving internal practitioner tools was one of the most reported priorities for firms’ customer-facing technology in 2023.5 Furthermore, Forrester’s research finds that better tools mitigate burnout in hard-to-retain staff and enable lean teams to do more with less, while improving those users’ experience.6 The chief technology and logistics officer at a workwear apparel retailer said: “[Developers are] working in this sexy space for a very well-known brand and everyone is learning and growing by being able to play and learn and get skilled on the new technology. That was a big morale boost for my organization. They were thrilled to be trusted and thrilled to [get] these new skills that will take them forward in their career.”
- Improvements to talent attraction and retention. In addition to improving the experience of developers by using modern development frameworks, interviewees also noted that there was a correlation between their organizations’ investment in Composable Storefront and their ability to attract talent. The head of e-commerce at a footwear retailer said, “Because we’re embarking into this new composable world, we are attracting better talent and we’re retaining that talent more effectively because they feel better supported by Salesforce’s ample documentation and a network of other engineers and product people.”
- Improvements to accessibility. Digital accessibility is on the rise: 60% of global design professionals indicate that their executives have mandated their commitment to creating accessible experiences.7 For the chief technology and logistics officer at a workwear apparel retailer, this was a high priority and a benefit of Composable Storefront for reaching an older demographic better. They said, “Through a progressive approach, we were able to deploy mobile friendly versions, and through a lot of that work, we were able to greatly improve our ADA [Americans with Disabilities Act] scores which are really important.”
Flexibility
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Composable Storefront and later realize additional uses and business opportunities, including:
- Identifying opportunities to extend experiences to other channels and regions. Once interviewees tackled creating a composable website, they could repurpose the built components in other geographies and channels. The global EVP of technology and innovation at an apparel retailer shared: “Because we have decoupled features, we can have much more immersive components, whether it’s mobile web or an app or within our point-of-sale ecosystem in store. So, [Composable Storefront] gives us a lot more opportunities there. So, as an example, we have a mobile POS in store for smartphones, but because we’re on Composable, we can build modular components for smartphones directly for store associates to use instead of getting a third-party app. We’re able to use a lot of the front-end work that we’re building ourselves.”
- Using the momentum created by a successful implementation to spur other transformative projects. The chief technology and logistics officer noted that the successful implementation of Composable Storefront and the digital transformation that accompanied it served as a confidence builder across their workwear apparel company. With the confidence gained from this project, this interviewee saw a springboard for further transformative projects for their organization. They said: “The morale boost extended beyond the engineers; it was a boost for the marketing and creative teams, too. It was an important moment for the organization to see that they can be successful with a [transformative] project. Everyone now says, ‘Hooray, now we have a flexible platform that will allow us to move forward with the strategies that we couldn’t do before.’”
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).
Quantified cost data as applied to the composite
Total Costs
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Dtr | External licensing and hosting costs | $0 | $440,000 | $440,000 | $440,000 | $1,320,000 | $1,094,215 |
| Etr | Implementation costs | $1,501,500 | $0 | $0 | $0 | $1,501,500 | $1,501,500 |
| Ftr | Ongoing training and management | $76,032 | $32,569 | $32,569 | $32,569 | $173,738 | $157,026 |
| Total costs (risk-adjusted) | $1,577,532 | $472,569 | $472,569 | $472,569 | $2,995,238 | $2,752,741 | |
External Licensing And Hosting Costs
Evidence and data. Interviewees incurred no external costs for the licensing of Salesforce Composable Storefront and no additional costs for hosting their headless site. Interviewees chose to integrate add-on products to support their front-end experiences. Additional information about these cost categories includes the following:
- Salesforce licensing cost. Salesforce offered Composable Storefront at no additional cost to its Commerce Cloud customers.
- Hosting costs. Interviewees’ prior commerce sites were built using SiteGesisis or SFRA. Hosting, server maintenance, and scaling considerations were managed as part of the software-as-a-service (SaaS) service. Unlike their prior environments, Composable Storefront ran on a separate server. With the deployment of Composable Storefront and adoption of PWA application development methodology, Salesforce continued to manage hosting, and therefore, interviewees’ organizations incurred no additional costs for hosting. Had the interviewees organizations chosen to build their own PWA-driven front-end, they likely would have incurred new costs to host on a traditional web server, a content delivery network, or a cloud platform.
- Third-party add-on licensing. Composable Storefront sites can integrate third-party technologies, such as payment gateways, analytics tools, and marketing automation, to enhance the customer experience. Companies may choose to bring in third-party apps, in addition to native Commerce Cloud tooling, to extend content or search to omnichannel touchpoints. The interviewees noted that they also purchased additional add-on products to support their front-end experience, including a content management system (CMS) and a search tool.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite incurs no additional licensing or hosting expenses.
- The composite licenses a CMS and a search and merchandising add-on solution, which cost $400,000 per year, to support their front-end experience.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this cost will vary depending on the number of additional products integrated with the site. In addition to a CMS and search tool, organizations might consider integrating tools for data asset management (DAM), a digital experience platform (DXP), marketing and automation tools, product information management (PIM), testing and automation, personalization, search and search and merchandising.8
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.09 million.
External Licensing And Hosting Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| D1 | Licensing costs for Composable Storefronts | Composite | $0 | $0 | $0 | $0 | |
| D2 | Hosting fees | Composite | $0 | $0 | $0 | $0 | |
| D3 | Licensing costs for add-ons | Composite | $0 | $400,000 | $400,000 | $400,000 | |
| Dt | External licensing and hosting costs | D1+D2 | $0 | $400,000 | $400,000 | $400,000 | |
| Risk adjustment | 10% | ||||||
| Dtr | External licensing and hosting costs (risk-adjusted) (risk-adjusted) | $0 | $440,000 | $440,000 | $440,000 | ||
| Three-year total: $1,320,000 | Three-year present value: $1,094,215 | ||||||
Implementation Costs
Evidence and data. The interviewees’ organizations incurred external and internal costs in the following categories as part of their Composable Storefront implementations:
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Internal labor costs for business and technical resources. Internal resources worked closely with system integrators to implement their Composable Storefront environments. Several interviewees noted that due to their early adoption of Composable Storefront and their teams’ relative immaturity related to PWA development, their organizations faced steep learning curves. The chief technology and logistics officer at a workwear apparel retailer noted their organization had the simplest implementation, while the cosmetics retailer had the most complex. Those interviewees shared the following about their implementations:
- The chief technology and logistics officer noted their workwear apparel retailer implemented Composable Storefront across 100% of its site in nine months, working on planning during the holiday season and mobilizing efforts in the new year. A team of four engineers partnered with the SI to complete the project.
- The product manager at the cosmetics retailer noted that their organization took a global implementation approach, rolling Composable Storefront across three regions over the course of two years. During the implementation, their organization managed competing priorities and holiday-related time constraints, extending the timeline. The product manager estimated that a year-long implementation would have been reasonable if Composable Storefront had been the only priority. The implementation team was staffed with approximately 15 in-house technical resources who dedicated between 20% and 75% to the project. There were also business resources, including the CDO who was the executive sponsor, the CEO, and several e-commerce team members.
- System integrator costs. All of the interviewees noted that a system integrator partner was involved with the implementation of Composable Storefront, with costs varying between $600,000 and $1.8 million depending on the scope of the engagement.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite organization takes an incremental approach to implementing Salesforce Composable Storefront. The implementation includes a single site and is the main priority of the e-commerce team.
- The implementation takes place over nine months.
- Eight technical resources are tasked with the implementation and dedicate 75% of their time on average to implementation tasks.
- The burdened monthly cost of a technical resource is $12,500.
- There are five business resources who step in at various points of the implementation for product design, QA, user acceptance testing (UAT), and process design. The business resources dedicate 20% of their time on average to implementation tasks.
- The burdened monthly cost of a business resource is $10,000.
- The composite organization engages a system integrator to assist with the implementation. The SI has previous experience with Composable Storefront implementations and utilizes accelerators to roll out quickly with minimal customization. The engagement cost is $600,000.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this cost will vary depending on the following:
- The number of competing priorities. Implementation timelines were most volatile between interviewees depending on how many projects were in flight simultaneously. Those organizations with several competing priorities will have to share resources and capacity and will therefore likely have longer implementation timelines.
- The scope of implementation. Organizations aiming to deploy Composable Storefront into one country’s site had shorter implementation timelines than those organizations that went live with Composable Storefront across multiple country sites.
- The maturity of the digital team, existing skill sets with software frameworks, and familiarity with the Salesforce platform will determine how steep of a learning curve the organization will face and impact the implementation timeline.
- The size and capacity of the engineering team. There will be a trade-off for organizations who rely more heavily on internal engineering resources verses outsourcing development work to a system integrator.
- The culture of collaboration. As the adage goes, “If you want to go fast, go alone. If you want to go far, go together.” Interviewees who moved forward with smaller implementation teams tended to have shorter implementation timelines, while their peers who had larger implementations and more business and technical resources involved had slower implementations. Some organizations have a culture of collaboration and deliberation, while others will choose to move quickly. This will be a factor in the implementation cost for Composable Storefront.
- The burdened cost of resources. The mix of roles, location of the employees, and employee seniority will all factor into the burdened cost of the resources participating in implementation.
- The existing relationship with system integrator partners. Organizations may have existing relationships with a SI partner and be able to incorporate the implementation into Composable Storefront into existing engagement contracts, while others may need to open new contracts or find a new system integrator. There may be additional periphery costs related to the sourcing and managing of the SI partner.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.50 million.
Implementation Costs
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| E1 | Number of months for implementation | Interviews | 9 | |||
| E2 | Number of technical resources involved with implementation | Composite | 8 | |||
| E3 | Average percent of time spent on implementation | Composite | 75% | |||
| E4 | Burdened monthly cost of technical resource | $150,000/12 months | $12,500 | |||
| E5 | Number of business resources involved with implementation | Composite | 5 | |||
| E6 | Average percent of time spent on implementation | Composite | 20% | |||
| E7 | Burdened monthly cost of business resource | $120,000/12 months | $10,000 | |||
| E8 | Subtotal: Internal labor costs for implementations | (E1*E2*E3*E4)+ (E1*E5*E6*E7) | $765,000 | $0 | $0 | $0 |
| E9 | System integrator costs | Interviews | $600,000 | |||
| Et | Implementation costs | E8+E9 | $1,365,000 | $0 | $0 | $0 |
| Risk adjustment | ↑10% | |||||
| Etr | Implementation costs (risk-adjusted) | $1,501,500 | $0 | $0 | $0 | |
| Three-year total: $1,501,500 | Three-year present value: $1,501,500 | |||||
Ongoing Training And Management
Evidence and data. As part of the Composable Storefront investment, the interviewees’ organizations dedicated internal labor to training and the ongoing management of the solution.
-
Internal labor costs for training. Interviewees noted that as part of their implementation and change management efforts, internal resources participated in training to upskill them around their new Composable Storefront environments. The amount of training that employees participated in varied widely.
- The head of e-commerce noted that their footwear retailer has a culture of learning, and that one out of every five days should include new learning, personal development, or innovation. The interviewee further noted that 75% of engineers’ learning time is around Composable Storefront and other Salesforce technologies and for the product teams, 25% of their learning time is around Composable Storefront and other Salesforce technologies.
- The chief technology and logistics officer noted that their workwear apparel retailer focused on upskilling developers upfront, and after the initial training push, each individual team received customized training provided by Salesforce. The interviewee noted that the maturity of a retailer’s development function will determine how much and what type of training will be needed. Developers needed to understand the core Salesforce platform, Javascript, JSON, and React Native frameworks.
- The product manager at the cosmetics organization shared that their digital team focused training primarily around using the CMS that was implemented alongside Composable Storefront. Front-end content development required them to change their workflow, especially around how they look at localization and component libraries. The organization’s SI provided training for front-end developers in 4-hour sessions.
- Ongoing management. Interviewees estimated anywhere between 20% of one FTE to 20% of 10 FTEs for ongoing improvements and optimizations to their Salesforce Composable Solution. Interviewees cited a variety of roles with administrative tasks, including DevOps, QA, and product owners.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
- The composite has one Salesforce administrator that dedicates 25% of their time to Composable Storefront. The burdened cost of the Salesforce administrator is $100,000.
- During the implementation of Composable Storefront, the eight technical resources ramp up their skill sets by participating in training. This training comes both from Salesforce-provided, self-led courses through Trailhead, as well as hands-on training provided by the system integrator during the implementation itself. During the implementation period, the technical resources participate in 120 hours of training. In the following years, these resources keep their skills sharp through 8 hours of self-led training on new features and functionalities of Composable Storefront.
Risks. Forrester recognizes that these results may not be representative of all experiences. The impact of this cost will vary depending on the following:
- The existing knowledge and skill set of business and technical resources. The maturity of the digital team, existing skill sets with software frameworks, and familiarity with the Salesforce platform will determine how much time that an organization will need to dedicate to training resources during the implementation and on an ongoing basis.
- Structure and size of the e-commerce team. An organization may choose to upskill a variety of roles or focus training on only developers. This will impact on the number of people receiving training as well as the type (and therefore length) of the training received.
- Culture of learning. As highlighted in the evidence section above, some organizations have a culture that focuses on the personal development of their employees. In these organizations, there may be higher levels of internal cost related to learning.
- Burdened cost of resources. The mix of roles, location of the employees, and employee seniority will all factor into the burdened cost of the resources receiving training.
- Peripheral costs. Organizations may incur additional internal or external costs for items like training materials, travel, and entertainment for in-person sessions, or additional costs for third-party trainers. Organizations may also incur costs for back-filling roles.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $157,000.
Ongoing Training And Management
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Salesforce administrators | Composite | 1 | 1 | 1 | ||
| F2 | Percent of time dedicated to Composable Storefront | Composite | 25% | 25% | 25% | ||
| F3 | Burdened annual cost of Salesforce administrator | Composite | $100,000 | $100,000 | $100,000 | ||
| F4 | Number of technical resources receiving training | Composite | 8 | 8 | 8 | 8 | |
| F5 | Number of hours of training | Interviews | 120 | 8 | 8 | 8 | |
| F6 | Burdened hourly cost of technical resource | $150,000/2,080 hours | $72 | $72 | $72 | $72 | |
| Ft | Ongoing training and management | (F1*F2*F3)+ (F4*F5*F6) | $69,120 | $29,608 | $29,608 | $29,608 | |
| Risk adjustment | ↑10% | ||||||
| Ftr | Ongoing training and management (risk-adjusted) | $76,032 | $32,564 | $32,564 | $32,564 | ||
| Three-year total: $173,738 | Three-year present value: $157,026 | ||||||
Consolidated Three-Year, Risk-Adjusted Metrics
Cash Flow Chart (Risk-Adjusted)
Total costs Total benefits Cumulative net benefits-
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
Cash Flow Analysis (Risk-Adjusted Estimates)
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($1,577,532) | ($472,569) | ($472,569) | ($472,569) | ($2,995,238) | ($2,752,741) |
| Total benefits | $0 | $3,952,200 | $4,132,200 | $4,261,200 | $12,345,600 | $10,209,453 |
| Net benefits | ($1,577,532) | $3,479,631 | $3,659,631 | $3,788,631 | $9,350,362 | $7,456,712 |
| ROI | 271% | |||||
| Payback | <6 months | |||||
Appendix A: Total Economic Impact
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Total Economic Impact Approach
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Benefits represent the value delivered to the business by the product. The TEI methodology places equal weight on the measure of benefits and the measure of costs, allowing for a full examination of the effect of the technology on the entire organization.
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Costs consider all expenses necessary to deliver the proposed value, or benefits, of the product. The cost category within TEI captures incremental costs over the existing environment for ongoing costs associated with the solution.
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Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. Having the ability to capture that benefit has a PV that can be estimated.
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Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
Appendix B: Supplemental Material
Related Forrester Research
“The Future Of Commerce Technology: Commerce Platforms End With An Ecosystem On FIRE,” Forrester Research, Inc., July 14, 2023.
“Executive Guide: Commerce,” Forrester Research, Inc., July 18, 2023.
“Join The Progressive Web App Movement,” Forrester Research, Inc., August 11, 2021.
“Digital Experience FAQ: Do I Need To Move To Headless Commerce?,” Forrester Research, Inc., July 20, 2020.
Appendix C: Endnotes
1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
2 Source: “The Future Of Commerce Technology: Commerce Platforms End With An Ecosystem On FIRE,” Forrester Research, Inc., July 14, 2023.
3 Source: “Digital Experience FAQ: Do I Need To Move To Headless Commerce?,” Forrester Research, Inc., July 20, 2020.
4 Source: “Executive Guide: Commerce,” Forrester Research, Inc., July 18, 2023.
5 Source: Forrester’s Digital Business Strategy Survey, 2023.
6 Ibid.
7 Source: “Firms Prioritize Accessibility To Win New Customers,” Forrester Research, Inc., February 21, 2023.
8 Source: “Firms Prioritize Accessibility To Win New Customers,” Forrester Research, Inc., February 21, 2023.
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