The Commerce Graph

Last updated: 27 Feb 2019
In this post we discuss the basics of graph theory, what it means, how this applies to commerce, why it matters and introduce the concept of “The Commerce Graph”.

The Commerce Graph allows us to understand the fundamental principles of commerce and the value it creates. It enables us to put up a framework around the plethora of commerce concepts, put them in context, and describe them. It potentially lets us peer into the future, as the variables continue to change with the relentless march of time and innovation. Continue reading to take the red pill!

A summary of graph theory

Graph theory is a way to formally represent networks and model relationships between objects or things. The importance and value in a graph is placed on the relationships between the objects, not on the objects themselves. To put it another way, mapping, understanding, and drawing from the relationships between things is valuable. By relating objects together, data is turned into meaningful information that can then be acted upon.

Facebook’s Social Graph, first announced back in 2007, is one of the most well known representations of graph theory. The Social Graph maps everybody and how they are related, such as users (friend network), likes, songs, photos, videos, facebook pages, brands, etc. This graph is driven by the new “digital oil”, relational data. Being able to acquire this “digital oil” as quickly as possible creates huge competitive advantages over time.

A simplified representation of a tiny fraction of the Social Graph.

Defining the Commerce Graph

To describe the Commerce Graph we should first step back from the many complex commerce concepts that have been coined over the past two decades and get back down to basics.

 

Essentially, commerce is the act of trading resources (usually money) for another resource (be that physical or digital) between two or more entities (people or companies). We need to truly understand the importance of the many relationships that takes place in this process, from the product being purchased, the discovery method & needs, the consumer, the seller, the place, the means, and so on. From these elements and relationships we can start to create the Commerce Graph.

From a graph perspective, these relationships are woven between all nodes. It can be used to not only describe features, but also helps us understand and describe concepts. There’s myriad possible relations to map. Whether that be between a person and their location, products related to other products, a person tied to certain products (wishlists/carts/orders), customers to customers (the “customers also bought” concept), store-to-product, store-to-store, omnichannel, personalization, and various contextual data points within each of those.

 

When thinking literally, a graph looks a lot like a net or a ‘web’. Metaphorically thinking, this is a powerful concept, because we’re casting our net far and wide to bring the commerce moment (value exchange) together.

 

Nowadays, if you sell your product online, you’ll likely have your website on one of the top platforms available, this gives you one single website (or store) that exists alongside millions of other websites. Sellers, or “Merchants” as we call them, have to spend a lot of money to acquire eyeballs and customers. They cast their pole in the hope to catch a fish, or in other words to land a sale. This is eCommerce as we know it today, but it’s inefficient, time-consuming, and expensive.

 

Part of the reason is because the world of eCommerce tries to replicate that of the physical world with locations or destinations (websites) rather than to enhance and optimise for the commerce moment. There’s a discovery and conversion gap. Today, that gap is bridged with a long-shot method of advertising and a monumental focus on keeping people on your site, increasing order values and optimizing conversion rates.

 

The Commerce Graph in practice

The Commerce Graph in practice covers the entire customer journey from finding a store, browsing products from a catalog through to the transaction and order fulfillment process. Below, we’ve identified basic concepts that need to interact seamlessly with each other to create a seamless, frictionless shopping experience.

 

Core Nodes

In this section we cover the key nodes of the Commerce Graph. Like in the Social Graph, which maps everybody and how they are related, the Commerce Graph maps people (customers) to how they come to acquire things.

 

Catalog (The Things)

The products & services, categorization and search to navigate to discovery/finding things for sale in the world.

 

Transactions (The How)

This includes the various states, from carts and the checkout process through to orders, payment, and fulfillment.

This piece is critical to connect the what with the who. Whether that’s a consumer buying a new item of clothing, or a business buying supplies.

 

Location (The Where - sub part of the how)

Omnichannel, cross platform, in-store vs online. These are completely new ways to transact, like self-checkout where the graph and the relationships themselves are reconfigured into a new, more streamlined order.

 

 

People (The Who)

The two or more entities involved in the act of commerce itself, from the person or entity selling the thing to the customer, to more complex parties like dropshippers, fulfillment, the supply chain, and resellers.

 

Putting it all together

Now we have all the nodes (elements), we can bring them together and draw the relationships between them. Creating these relationships begins to highlight the complex world we live in and the need to be able to navigate this complex web as seamlessly as possible.

 

The diagram above is by no means exhaustive and is a very small, simplified representation of a much larger, more complex and dynamic Commerce Graph.

 

Why do the relationships matter anyway?

The ability to configure the relationships between nodes and introduce new nodes unlocks new business models and ways in which consumers and businesses interact with each other inside the fabric of the Commerce Graph (value creation), and therefore, new ways to transact (value exchange!).

 

The Commerce Graph of the past

A hundred years ago people met in person and bartered at marketplaces and stalls. The relationships between people, things, and the transactions didn’t change very much due to technological and geographical limitations - there were very few, rigid relationships between the nodes. As technology progressed, these continued to evolve, but the fundamentals remained the same to this day.

 

The Commerce Graph yesterday

With the dawn of the Internet, we entered a new age where the digital world enhanced and displaced the physical world. New elements and variables were introduced into the Commerce Graph. This manifested itself into thousands of centralized proprietary walled gardens for retailers and brands building their own catalogs of products or services and extracting “digital oil” from customers for their own use.

 

The largest and most successful of these is Amazon. A lot of this is due in part to their rapid accumulation of product, customer, and transaction data into a single, vast silo. This is a big advantage, and we want to provide that same ability to anyone selling a product on the Internet today. The process and location itself, though, has remained quite restrictive and rigid, recreating the destination driven physical world. You arrive on amazon.com, search to discover products in a grid or “product shelf”, purchase them, and then receive them in the mail or via collection.

 

The Commerce Graph today

With the rise of new technologies, like mobile phones, Apple Pay, AR/VR, IoT, smart homes, and beyond, new variables are constantly being added into the mix and rapidly re-shaping commerce as we know it and how we buy things.

 

In short, for brands and retailers to truly succeed they must utilize graph theory to capture the commerce moment. It requires a new focus on the relationships between the nodes. So far, this has been incredibly difficult to achieve. Platforms of the past have prescribed rigid relationships across the graph to serve a single use case, e.g. a single siloed destination like a grid-based website. Reality and people are much more nuanced than this cookie-cutter approach.

 

How to enable the Commerce Graph anywhere

To enable any seller, retailer, and brand to traverse the Commerce Graph and capture value anywhere the following is required:

 

Abstract core commerce logic

The nodes are important data stores and standard patterns exist in how they interact with each other (products, carts, checkout, etc.). These must be simple to invoke but malleable, like lego bricks that can be assembled into a variety of different combinations.

 

Embrace data

To create value, we must enable data storage beyond just key value pairs. Structured and relatable data is vital. This is where Flows, our EAV (Entity Attribute Value) system comes into play. Flows enable the extending of existing resources or the creation of entirely new resources.

 

Embrace Interoperability

Seamless and tailored integrations to solve the unique needs of each business and model are the cornerstone of each well-designed architecture. They allow Moltin to be mashed up with other best-of-breed services (nodes), such as the sending of events and notifications to third party applications and services in real-time.

 

Open Architecture

Most commerce platforms lock you into a very specific technology stack, or rigid and brittle integration patterns. JAMstack is a great manifestation of this new way of architecting and delivering modern websites, and we discuss its importance in our blog post, Build fast eCommerce stores with JAMstack. The API-first approach is simply the delivery mechanism, modern architectural design consists of a patchwork of best-of-breed APIs, tools, and services to achieve flexibility and interoperability. This enables you to effectively navigate and re-shape the Commerce Graph by swapping nodes and relationships out quickly.

 

Combining these principles together enables true simplicity and flexibility to navigate the Commerce Graph to meet an ever-changing and complex landscape.

 

Welcome to the Commerce Graph!

 

What next?

Stay tuned for the second post in this series, where we’ll go deeper by mapping out the commerce landscape or what we call The Commerce Grid. This will help to categorize the key moving parts that make up a modern commerce system today.

 

In the last post we will cover Open Commerce Architecture, this unifies and applies The Commerce Graph, The Commerce Grid and some key architectural concepts together. For now, you can check out how Moltin can help by checking out our product overview, start a free trial today, or schedule a free commerce solutions assessment.