Introduction to a Headless Commerce Approach
Reaching buyers in an increasingly complex consumer journey that stretches across numerous devices and channels is a high priority for marketers and merchandisers. Due to the ongoing explosion in the volume of content, data, devices, and channels, organizations may have very complicated problems on hand but they equally have a very advanced technology landscape which should be utilized to break the silos that lead to separate technology solutions for content and transactions. The main reason to do so is that this separation often creates fragmented digital experiences which then cause businesses to leave money on the table.
The demand for breaking silos and creating unfragmented digital experiences across devices and channels is driving the content and commerce technology ecosystem to drastically change. As Forrester also explains, commerce solutions have evolved to support customer engagement features, such as page templates, navigation tools, site search, and personalization, while some web CMS now offer shopping carts, checkout workflows, and product catalog management. This shift leaves digital businesses at a crossroads. Although legacy patterns will continue for the next three to five years, cloud deployments, headless solutions, and operating models expose a new way forward that will eventually take over and shape digital experience strategies. Therefore, retailers, who don’t want to sit with laggards where they drag their feet and cling to antiquated ways, should be aware of new emerging content and commerce possibilities.
According to Forrester, there are three primary commerce approaches that online retailers purchase.
The first one is an all-in-one commerce suite approach where users can connect every step of a multichannel, multi-location business while all the capabilities from e-commerce, POS and order management to merchandising, marketing, inventory, financials and customer service are offered in one. If a retailer is in the initial period of building a digital commerce business, then this approach might be appropriate for them.
Another common, not as common as an all-in-one commerce suite though, is a best-of-breed approach. Some digital businesses prefer to invest in best-of-breed software for every single capability and integrate them with each other. The challenges with this approach are time, cost, and the need for expertise for integrating the systems chosen thus it is more popular among enterprise-level businesses that are overall satisfied with many capabilities of their suite but also need for a particular capability that other systems could offer.
Lastly, we have a headless commerce suite approach (also referred to as microservices) which is what we will go more in-depth about in this article. It is a relatively newer approach which enables online retailers to make shopping features of their commerce suites embeddable into digital experiences that go beyond their websites. If an online retailer wants to monetize their social content, they can adopt this approach and inject buying opportunities into images, videos, banners, and so on through a set of application programming interfaces (APIs).
A Headless Commerce Approach Helps to Drive Omnichannel Success
Gartner predicts that 25% of leading online sellers will have enabled first-generation "commerce that comes to you" capabilities by 2020. “Virtual reality, augmented reality, wearables, video and other new touchpoints will enable new interaction models, which means that buyers will not need to go to digital commerce sites. Moreover, peer-to-peer, 3D printing and drones will enable new sourcing and fulfillment models,” explains Gene Alvarez, Managing VP at Gartner.
However, in the real world, delivering omnichannel experiences still seems to be a huge roadblock for many merchandisers and marketers. Here’s a data point I cited in one of my most recent articles that bears repeating: “Only 9% of brands describe their marketing strategy as omnichannel, and 30% say they have no plans to implement omnichannel, or that they have abandoned the idea entirely.” To be honest, I am still appalled by this finding, however, there are so many reports that unveiled similar findings on the matter. The National Retail Federation (NRT), for instance, declared in early 2017, it’s still a “long road to omnichannel success".
Along that road, conventional commerce platforms may not keep up with complications emerging from digitizing stores and adding new content delivery formats, like a mobile app or web-based applications, as those monolithic platforms essentially limit retailers to a particular presentation or front-end experience throughout the entire commerce system. Therefore, commerce platform providers decided to chop off the “head” to provide more flexibility and extensibility to those that aren’t selling their products and services in a conventional way, or are looking for more innovative front-end interfaces, or are looking to pull in the best-of-breed from each platform, rather than ‘plug-in and go’.
As a headless commerce approach makes it easier to interact with cloud services to provide the relevant part of your platform via APIs, new or updated content, a catalog, can be automatically rolled out to new apps faster than ever. As a result, this creates frictionless experiences across all the digital properties with which it is connected.
A Headless Commerce Approach Drives Creative Commerce
As mentioned earlier, the approach is not for everyone but it is very beneficial to those who are striving to create effective and creative omnichannel experiences for their customers. Instead of wrestling with disjointed tools and inflexible architectures, with this approach, merchandisers can easily and quickly apply commerce-enabled content everywhere, creating contextually fit experiences reflective of their brand equity.
To put this into perspective, Amazon, for instance, uses a headless commerce approach and how we, as consumers, see the approach embodied is Amazon Echo and its “Dash Button”, where consumers easily reorder more detergent by physically clicking a button.
Another benefit of the approach is to allow digital store admins to make rapid updates without impacting the backend system or vice versa. Since the back-end and front-end are separated, if the back-end of the commerce platform has any performance issue or, simply, needs maintenance, it won’t create any downtime for the live site. So without risk of breaking the site, retailers can upgrade and customize their backend. Making changes on the commerce site is a very common scenario. In fact, Amazon updates on average every 11.7 seconds to reduce the number and duration of outages, whereas Netflix deploys code thousands of times each day.
In addition to scalability, a headless commerce approach may also speed up the response time of the site by shifting display logic to the client-side and streamlining the back-end, but this also depends on the front-end implementation. It is a prominent factor, as studies have shown that if your website takes more than 4 seconds to load, your conversion rate declines by 40%.
As Forrester’s analyst Mark Grannan told CMS-Connected in an interview, “API-based content delivery and microservices are hugely important.” By harnessing the power of APIs, a headless commerce platform may offer ultimate flexibility for creating rich web and mobile experiences and unleash the creative power of front-end developers but it comes at the price of sophisticated development skills and experience. That being said, in the long run, a headless design also reduces the hosting, licensing and maintenance costs associated with traditional e-commerce platforms. Additionally, the consolidation of operations and marketing tools offer even greater cost savings and potential of generating new revenue streams.
To me, there has never been a more exciting and interesting time to be a marketer and a retailer as they are exposed to so many forward-thinking ways of experimenting and utilizing various technologies.
The increasing demand for being armed with a rich content management system (CMS) around a commerce engine drives many marketers and merchandisers to take a Content-first and Commerce-first approach to commerce as they benefit from the best of both worlds. On top of that, many organizations also feel more efficient when they integrate a standalone best-of-breed e-commerce solution with their digital ecosystem.
On one hand, a headless content/commerce approach might be a good solution to support commerce in diverse use cases, such as the IoT or embedded commerce, on the other hand, it is not to be the best solution for those who are looking for a single-vendor commerce platform as there is an integration process involved. In order to speak to both personas, digital experience platform vendors persist to amplify their native capabilities in emerging areas such as e-commerce and marketing features, while providing solutions which can seamlessly integrate with different sets of third-party technologies in order to give their users ultimate flexibility.
At the end of the day, the main factor that merchandisers are looking for is a solution which can help them deliver contextual digital experiences to end consumers. While considering a purchase of technology, it is very common, for buyers, to be dazzled by the new or “trending again” innovative approaches and lose the sight of your organizations’ essential needs versus their resources. To help our readers navigate in these daunting waters, we will be publishing other articles on commerce platforms. To binge on all of our exclusive content on this topic, please check back to our website in the upcoming days.