Estimated to reach $6.3 trillion in 2024, the global eCommerce market is expanding at an unprecedented rate even while navigating through pandemic-induced disruptions.
Retailers are overwhelmed by the challenges of this sudden acceleration and are looking for ways to take advantage of the opportunities that the adversity presents. Today, customers are on multiple devices, across multiple touchpoints and they want seamless, personalized, and effortless shopping experiences at all times. Therefore, to survive, retailers have no other options but to accelerate the adoption of digital business and explore every possible direct digital route to meet customers wherever they are.
Rapid digitalization is turning the spotlight on ‘headless commerce’, especially as webshops metamorphose into a variety of digital fronts such as social media apps, internet of things (IoT) apps wearables, and other smart products, as well as artificial intelligence (AI)-powered conversational commerce, and more. This is primarily because, unlike traditional eCommerce systems where the front and the back-end are inseparable, in headless commerce, they can function independently, resulting in greater agility and flexibility.
However, at the same time, some businesses vouch for traditional commerce because of reasons such as price, technological skills, and ease of use, which startups and smaller enterprises seek at the beginning of their journey. So, while in essence, it is a business decision steered by the “here and now,” the question to go for headless commerce or to stick to traditional commerce is also deeply related to an organization’s future plans and business landscape.
Let’s delve a little deep into both the models and weigh the pros and cons of each to help you understand what may work best for your business:
Headless commerce: Truth vs. Hype
With increasing smartphone penetration, i.e., half the world owning one, consumers are increasingly using their mobile phones to shop and this is adding to the use of headless commerce. By decoupling the front-end (presentation or user interface) and the back-end (behind-the-scene functionalities), headless commerce ensures that the multiple platform commerce is possible with the help of APIs. On the other hand, traditional commerce platforms restrict organizations to classic web stores only.
However, creating a headless commerce solution requires substantial amount of effort initially as it demands high-end development, robust and flexible back-end functionalities and sophisticated knowledge of the system architecture. Therefore, it calls for significant investment in development resources and infrastructure at the start.
However, looking at the benefits that a headless commerce platform ensures – speed to market, flexibility, reach and outstanding customer experience – it is worth every penny spent, plus it is the need of the future. As you are not limited by cookie-cutter themes, headless commerce allows you to broaden your online presence in entirety and create immersive customer experiences that match rapidly evolving customer needs, without having to worry about altering the backend. Add to that the additional flexibility and agility to scale as your business grows, high adaptability to user experience (UX) and APIs, quick content delivery, and enablement of payment across multiple digital touchpoints.
Traditional commerce is good if you are looking for a quick start
Traditional commerce, on the other hand, is cost-effective, easy to set up and run as everything comes as a package. Operating on a monolithic architecture with the front and back-ends tethered together in a traditional ‘full stack’ approach, these platforms offer many features that are combined into one interdependent system consisting of the content management system (CMS), shopping cart, web store design, and product management. Reliably efficient, these platforms offer your IT teams full platform control. Setting up a simple storefront and maintaining it is easy if you do not require frequent changes.
However, when it comes to tailoring customer experiences across multiple digital channels and touchpoints, the traditional commerce platforms are limited by several constraints regarding front-end design, user interface, add-ons, and customizations. As these platforms leverage pre-defined themes, templates, and components of commerce platforms, such as Adobe (Magento), Shopify etc., they are contained within the specific framework and technology. Moreover, they come with a fixed back end, inflexible business-centric customizations code changes, and front-end. Therefore, even for making a small change on the homepage, extensive modifications have to be made in the back-end, which would take a lot of time and effort and would increase the time-to-market.
Headless or traditional – take your pick
Using a traditional commerce platform does not require exorbitant set-up costs and is simple to deploy. While components like frameworks, scripts, and templates can be easily applied to traditional commerce platforms, they add to the limitations of the platforms and restrict seamless digital experiences. It is true that traditional commerce applications have evolved to include state-of-the-art features, but many continue to remain primarily web-centric and less open to adapting to the new digital channels and devices.
Although cost-sensitive, complex, and manpower-intensive, headless commerce platforms allow an unhindered pathway to innovate and experiment by decoupling the front-end and removing any restricting dependencies with the back-end. As commerce transcends from independent eCommerce websites to numerous digital touchpoints, traditional platforms make way for headless commerce.
The emergence of cloud and microservices demands that all backend systems such as CMS, product information management (PIM), enterprise resource planning (ERP), etc. must enable the information to the presentation layer. This is where headless commerce is a clear winner as it is about decoupled systems and decoupled commerce. It is about separating components of the eCommerce stack so that you gain more flexibility in the front-end or the customer-facing side. As the interfaces collaborate and exchange information seamlessly, the presentation layer stays flexible and talks to the right components at the backend.
What Headless Really Stands For?
Headless commerce is not only about differentiation between the backend and the front-end but also between all the combinations you need for enabling eCommerce on the web. Headless commerce allows different systems to talk to each other via APIs and collaborate via interfaces to exchange information. It also separates the data from the processes. It bridges the information through APIs, allows machines to talk to each other, and transfer data among each other. As this communication among machines or systems happens between the layers, the complexities remain completely hidden from the front-end in headless commerce.
In terms of system architecture, headless commerce is quite logical. In a tightly coupled architecture, updating all the components simultaneously is difficult and time-consuming. Whereas, in a decoupled environment, due to the architecture and the logic, it is easier and feasible to update all the microservices to suit business requirements. Hence, you can scale your eCommerce business easily, respond to market demands, and launch new CX initiatives swiftly and effortlessly with headless commerce.
This is the reason why we see a majority of eCommerce players gradually moving towards a decoupled system. In today’s omnichannel eCommerce environment, headless commerce has emerged as one of the most critical applications for creating exceptional customer experiences. This is because headless commerce facilitates the delivery of the right information to the right channel at the right time.
The Inevitable Change
A fundamental change that we are noticing in the eCommerce industry is the growing popularity of composable commerce, an approach of selecting best-of-breed components of commerce and composing them into a customized app to meet specific business needs. This is a paradigm shift that is permeating across the organizations, and forcing the C-suite to pay close attention to headless commerce and its immense possibilities.
Businesses intending to stay ahead of the curve and future-proof themselves vouch for decoupled systems to respond to the demands of highly-empowered customers. Headless commerce gives eCommerce businesses complete control over all user interaction elements and allows brands to optimize user interface and improve customer engagement and conversion rates. As headless commerce eliminates all interdependencies and the need for reconfiguring any backend logic, brands can quickly develop and implement new customer-centric solutions and achieve a faster go-to-market.
With a headless approach, enterprises can remain nimble, platform-agnostic, and keep pace with the latest technological advancements in the fields of augmented reality (AR), virtual reality (VR), the internet of things (IoT), conversational commerce, etc. that are changing the rules for the eCommerce industry. Headless commerce ensures seamless and consistent omnichannel enablement, enhances extensibility and augments scalability, and empowers eCommerce leaders with the agility required to stay in the race. With increasing complexity, headless is no more limited to a technology but has evolved as another – and better – way of doing business.
As recent trends in the retail industry point towards contactless and seamless digital customer engagements, headless commerce platforms have attracted investments worth $1.65 billion over the last two years. Retail organizations looking to drive resilient and sustainable business models need flexible platforms that enable innovation at scale to participate in the digital-first economy. They are beginning to realize the potential that headless technologies have in defining the future of eCommerce. The demand for headless applications will continue to increase as retailers look for more responsive and agile solutions that allow them to shape the shoppers’ journeys with innovative and hyper-personalized digital experiences.
About the Author
Dietmar Rietsch is CEO of Pimcore. A serial entrepreneur with a strong sense for innovation, technology and digital transformation. He is a passionate entrepreneur who has been designing and realizing exciting digital projects for more than 20 years.
Featured image: ©TippaPatt