What is Headless Commerce and Why Your Business Needs it Now
- DATE PUBLISHED (17/4/2023)
- READ TIME (5MIN)
In the world of eCommerce, growth, social media, and cutting-edge technology is the talk of the town. Brands today are like gladiators in a digital colosseum, battling it out with rivals from around the world. They strive to grab shoppers' attention, spark conversations, turn them into loyal customers, and keep them returning for more.
However, these brands face significant challenges:
Fierce competition from every corner of the globe
Expensive customer acquisition costs (CAC)
The ongoing battle to build brand loyalty
The absence of third-party cookie support for personalized experiences
Enter headless commerce with a promising solution.
What is headless eCommerce?
Forget conventional headless commerce definitions. Instead, here's a more engaging way to describe this transformative commerce concept.
Headless is like breaking free from the constraints of standardized shopping journeys and lackluster developer experiences. It lets you sell your products anywhere without design or development limitations.
The magic of headless commerce lies in its ability to let merchants create omnipresent experiences for their customers. So, let's dive in and explore the ins and outs of headless commerce, shall we?
Why Are Businesses Making the Headless Leap?
1. The rise of omnichannel commerce
Picture this: the good ol' days of the 1990s, when the internet was spreading its wings for us regular folks. Back then, there was pretty much just one way to do some online shopping: park yourself in front of a bulky desktop computer and type your way through a store’s website.
In this model, the website (the digital storefront) was tightly linked to the commerce engine that handled all backend tasks. We're talking catalogs, inventory, payments, taxes, fulfillment; you name it.
Fast forward to the present day, and the eCommerce landscape has changed dramatically. We now have multiple entry points, including mobile apps, voice assistants, wearables like smartwatches and VR headsets, smart TVs, game consoles, and more!
Each of these devices is an experience layer (or head) that brands today use to reach their target audience. But here's the catch: they all have their own rules for how content should be dished out to ensure the user interface is smooth as silk, spot-on, and gets the job done (aka personalization). Connected with all those backend services that keep the gears of eCommerce turning.
The rise of omnichannel commerce has transformed the whole packaged commerce deal, and brands today work with a decoupled backend and deliver personalized functionality via API to the frontend.
Customers may not be aware if it's a headless commerce platform because the technology is in the underlying architecture, but they surely feel and understand the difference in ‘experience.’
2. Catering to ever-evolving customer expectations
The pandemic challenged our worldview and prompted us to reevaluate our behavior and daily interactions. As a result, our shopping habits have become more versatile than ever.
A newfound appreciation for omnichannel experiences led to 51% of shoppers checking online for local store inventory, 37% ordering online and picking up from stores, and 36% turning to web-only retailers for speedy same-day delivery.
That’s one of many benefits of headless architecture; brands can embrace this omnichannel trend and deliver unique customer experiences. They can create, launch, and scale new sales tactics without accumulating significant technical debt.
In this sense, headless commerce is like a reliable Swiss Army knife, prepared to tackle whatever challenges it encounters.
What are the Common Use Cases for Headless Commerce?
Many eCommerce business managers and developers recognize that headless commerce is growing in popularity in today's digital-first economy. However, some mid-market enterprise companies continue to rely on trusted, older legacy platforms, unaware that these monolithic systems may limit their brand experiences.
With a single codebase handling all heavy lifters – the CMS, the shopping cart, site design, and product management – flexibility is compromised, and updates are slowed down. This ultimately leads to missed sales opportunities, such as IoT.
So, how can the best headless commerce platforms help you achieve your business goals? Let's explore some practical use cases:
Use Case 1: Connect with customers everywhere and in every way.
Imagine a customer browsing your website for a product, adding it to their cart, but not completing the purchase. With headless architecture, you can send a personalized email reminding them of the product and their abandoned cart. The email may also include product recommendations and a special discount code to incentivize them to buy.
That's not all! When your customer searches for the same product on their mobile device, the headless architecture lets you personalize their experience with mobile-specific content like a mobile-optimized website or app. You can also streamline the checkout process by offering mobile payment options like Google Pay or Apple Pay.
Moreover, the headless architecture enables you to deliver targeted content to customers on various social media platforms based on their interests and behavior. For instance, send a personalized Instagram ad to a customer who previously engaged with your brand on Instagram or a targeted Facebook ad to a customer interested in a particular product.
Traditional platforms may provide some level of multi-channel integration, but it often requires additional effort and time to ensure a consistent and seamless experience across various devices and platforms. Integrations might be limited or more challenging to achieve due to the monolithic structure of traditional platforms.
With headless commerce, the possibilities for integrating multiple channels and delivering seamless content are endless, creating a personalized and connected customer experience regardless of how they interact with your brand.
Use Case 2: Secure customers' payment data effortlessly.
Managing PCI compliance, fraud protection, and checkout security can be a headache for eCommerce brands. A single data breach can damage a company's reputation and result in costly fines and legal fees. Traditional platforms may provide these services, but headless commerce simplifies the process.
Using a SaaS provider with your headless architecture can help reduce the workload for your internal IT team and streamline the process of staying compliant and secure. SaaS providers can take on the risk and manage the process, helping you stay updated with the latest regulations and providing continuous monitoring to prevent breaches without burdening your internal IT team.
With the best headless eCommerce platforms, you can focus on growing your business and providing an exceptional customer experience while your SaaS provider handles your payment security needs.
Use Case 3: Bring your eCommerce personalization dreams to life.
Headless commerce's open architecture allows you to achieve anything you can dream up. Indeed, the personalization possibilities are endless. You can use pre-built integrations with platforms for ERP, CRM, and many more functions or opt for custom builds using APIs and SDKs, enabling you to create a truly unique and personalized experience for each customer.
In traditional commerce, the monolithic eCommerce systems can limit personalization capabilities, leading to generic customer experiences. In contrast, going headless provides the opportunity to create targeted product recommendations based on a customer's purchase history or browsing behavior.
You can also personalize their journey by presenting relevant content based on their preferences and interests. Another major benefit of headless commerce - it is easier to integrate third-party personalization tools and tailor the user experience without being constrained by traditional limitations.
Because ultimately, building loyalty and increasing CLV is best achieved by tailoring customers' experiences to their needs and interests.
Decoding the Headless eCommerce Architecture
Headless commerce can be likened to a well-oiled machine where the frontend (the sleek, user-friendly exterior) is separate from the backend (the nuts and bolts that keep everything running smoothly). This separation allows businesses to customize and upgrade each part without affecting the other, making adapting to ever-changing customer needs and market trends easier.
In this well-oiled machine, APIs ensure seamless communication between the frontend and backend. APIs act like finely tuned gears in a complex mechanism, enabling them to share information and stay in sync.
APIs allow businesses to integrate new features (such as payment gateways or customer support chatbots) without causing disruptions. They enable companies to utilize the latest technology and services without being confined to a specific platform or tech stack.
This flexibility is crucial because your business presence is more expansive than just an online store. You may have also launched an app, interconnected PoS systems, and set up push notifications on smartwatches. New devices are emerging quickly, and customer loyalty to brands is not setting a standard for comparison.
If you want to know how to ride the wave of innovation while keeping your core systems steady and reliable with headless commerce, check out this blog on How Headless eCommerce Works.
Headless vs. Traditional Commerce
For running a successful eCommerce business, employing the best consumer experience technology is essential. Your platform needs to be highly scalable and flexible. While this may sound simple, platforms-built decades ago (and updated periodically) were not designed to adapt to changes regularly.
A traditional platform cannot be optimized at every small but iterative step, simultaneously focusing on increasing customer retention, conversion, or engagement. This limitation is one of the reasons headless commerce came into the picture.
By utilizing microservices, headless commerce can separate functionalities from each other. For example, changing something in the product logic won't impact the customer's interaction with the headless storefront or the items they add to their cart.
Let's examine a scenario from both traditional and headless commerce perspectives.
Little Wonders store aims to create a seamless shopping experience for new parents and gift-givers. They want to launch an app with a user flow optimized for both types of customers and a web store and even integrate IoT devices.
With a traditional commerce platform, Little Wonders would face limitations in customization and flexibility. They would be working with a pre-built solution, where adapting it to their unique requirements could prove challenging. It would be like trying to add new features to an assembled bicycle – not easy.
In contrast, a headless technology would allow Little Wonders to build their digital store from scratch, with the freedom to choose every component.
They could use a separate CMS (like Contentful) to manage their catalog and guides and integrate custom microservices for cart and payment flow, search, and other store-specific features.
The frontend would be decoupled from the backend to:
Make it easier to create distinct user flows for different customer types, and
Scale up by adding more channels like IoT devices.
Here is what the architecture of Little Wonders’ headless eCommerce example store would look like:
Backend: Little Wonders' custom backend services (inventory, customer data, etc.)
Frontend: Web store, mobile app, IoT devices, and other channels
Contentful CMS: Manages catalog, guides, and other content
Custom Microservices: Cart and payment flow, search, and store-specific features
API-driven communication: Connecting backend, frontend, and other services seamlessly
As illustrated, by choosing a headless commerce platform, Little Wonders would have the flexibility and agility to create a tailored shopping experience. This approach would set them apart from the competition and enable them to cater to their customer's evolving needs.
What is Headless Vs. Traditional eCommerce?
Traditional eCommerce relies on a monolithic architecture that tightly connects the frontend and backend, whereas headless eCommerce uses a new approach that decouples the two, enabling greater flexibility and customization.
Is Amazon headless commerce?
Although Amazon is not a headless commerce platform, it does use some parts of headless architecture in its services, such as AWS Amplify and AWS App Runner, allowing businesses to construct their own headless solutions.
Is Shopify headless eCommerce?
Yes, Shopify Plus supports headless eCommerce through its API and allows developers to build custom front ends while leveraging Shopify's backend services.
Why is headless commerce the future?
Due to its adaptability, scalability, and capacity to change to changing consumer demands, market trends, and emerging technologies, headless commerce is seen as the way of the future. It offers a seamless and personalized user experience across a variety of channels.
Who uses headless commerce?
Businesses seeking greater customization, flexibility, and scalability, as well as those aiming to provide personalized experiences across multiple channels, often adopt headless commerce.
When should I go headless eCommerce?
First, prioritize understanding what is headless eCommerce and what value it can bring to your business specifically. You can consider going headless when -
You need greater customization and scalability.
You want to provide hyper-personalized experiences across multiple channels; or
You plan to adapt to emerging technologies and market trends quickly.