Headless Commerce is a new phenomenon, and headless commerce software allows companies to rethink their online commerce technical architecture and user experience. This definitive guide to enterprise buyers will provide an overview of the concept of headless commerce and dive in-depth into the world of headless commerce software tools.
According to Statista: “In 2020, retail e-commerce sales worldwide amounted to 4.28 trillion US dollars, and e-retail revenues are projected to grow to 5.4 trillion US dollars in 2022. Online shopping is one of the most popular online activities worldwide.”
Given the size of the market, innovations in eCommerce are a strategic imperative to meet the burgeoning demand and the experience needs of a demanding customer.
What is Headless Commerce? A Definition
We will define Headless Commerce as a decoupled architecture that distinctly separates the front-end interactions from the back-end operational transactions, thus allowing companies the flexibility to offer unique and personalized customer experiences.
The term “headless commerce” is attributed to Dirk Hoerig, co-founder of CommerceTools.
It is almost like having a fantastic façade in a fancy storefront on the fifth avenue while hiding the ugly back-end underbelly. Adopting headless commerce software will foster better customer conversation.
While we have our definition, here is what Dirk Hoeirig explained about the concept of headless commerce: “Headless eCommerce platform gives companies the full potential of best-in-class online retail without the boundaries to specific touchpoints and ensuring a great user experience. A true headless commerce platform provides robust commerce capability such as shopping cart, product information management, promotions, and merchant tools no matter the customer entry point. On top of that, a headless eCommerce system can easily connect – via API – to any customer experience front-end.”
Why should Companies consider Headless Commerce?
The biggest challenge with the current architecture of e-commerce is that it still relies on the assumption that eCommerce transpires on a desktop computer form factor. But the reality is some many other avenues and channels are new frontiers of commerce.
Headless commerce software supports multiple sales channels, including web, mobile, smart speakers, kiosks, television, and social media, with a single back-end supporting all such interactions and transactions.
The separation of the front-end allows companies to design interfaces that are perfect for each medium. For example, the needs of UX in Snap are different than Instagram versus Facebook messenger, or WhatsApp, or a channel on YouTube, or selling on television.
If implemented well, headless commerce software facilitates the dovetailing of user experience to channels and media while at the same time decoupling what happens in the customer’s e-commerce journey after placing an order to receiving the product. This means even smaller companies can gain the architectural flexibility of large firms with millions of dollars of ecommerce technology spend.
How does Headless Commerce Software Work?
While each vendor of headless commerce solutions may bring their unique flavors and focus, in general, here is how it works:
- In the front end, search, visual display, personalized content, user reviews, and user behavior tracking are all critical functions facilitated by APIs (Application Programming Interfaces. The front end is usually served by a headless CMS (content management system). The front-end, which can be a desktop, mobile, kiosk, IoT, smart speaker, messaging, chat, or other media, can request through the APIs the information, content, product details the customer needs instantly.
- The middle layer may comprise multiple pricing schema, promotions, coupons, product catalogs, and content, etc., each of which may be one or separate systems.
- In addition, the APIs connect to other enterprise solutions such as CRM, Inventory Management, Supplier e-Sourcing Systems, Warehouses, etc.
A couple of Headless Commerce Software Vendor’s solution architecture will visually demonstrate the concept and the power of going headless.
BigCommerce Headless Commerce Architecture:
Here is the architecture of the pioneering headless commerce tool, BigCommerce:
Image Courtesy of BigCommerce.com
Here is another headless commerce tool architecture, this one for SAP:
SAP Headless Commerce Architecture:
Image Courtesy: SAP.com Headless Commerce by SAM Solutions
Enterprise Use Cases for Headless Commerce:
Implementing shiny new software without proper use cases does not result in ROI (Return on Investment). Hence it is essential to identify the appropriate use case and build a business case to implement a headless commerce solution.
Here are some classic headless ecommerce use cases to consider:
- Personalize to Drive More Sales: Headless e-commerce tools allow companies to personalize user experiences, content, context, and even pricing to drive more sales.
- Device and Channel Native Experience: Go away from one-size-fits-all front-end display to customizing experience to the native ambiance. For example, displaying and selling in a social media channel may be different from your website.
- Expand Globally: Instead of coupling the entire cycle of commerce with headless e-commerce solutions, overcome barriers of language, culture, pricing, taxation, and availability across the globe.
- Manage Content and Code Separately: Instead of depending on coders to update content, the teams that drive content, experiences, and back-end code can work synergistically without over-reliance and dependence. Hence, updating content or experiences can be distinct from any back-end code.
- Scale Seamlessly: Using the API-driven headless eCommerce software, companies can avoid sudden demand causing systems to fail like a traditional monolithic coupled architecture.
Benefits of Headless Commerce Software and Architecture:
Implementing a headless ecommerce solution is a bit more complex than launching a monolithic e-commerce store in an all-in-one platform. However, for companies trying to scale online revenues and compete with digital natives, headless commerce solutions will enable leapfrogging into the next generation commerce architecture.
Some of the critical advantages of using Headless Ecommerce Tools are:
- Every Digital TouchPoint can be a Commerce Frontend
- Flexible, Extensible, and Scalable Microservices Architecture
- Personalized Customer Experience
- Easy to Make Changes
- Ability to launch and serve customers across the globe, in many native languages, and across media.
- Decoupling Systems also will help improved Information Security
Disadvantages of Headless Commerce:
While there are several advantages to headless commerce, there are also pitfalls and disadvantages. Therefore, an enterprise must consider the totality of the picture to decide about implementing headless eCommerce.
- The architecture is not straightforward and has some inherent complexity.
- The headless commerce solution needs multiple systems and integrations.
- The cost for initial setup and launch, as well as ongoing infrastructure costs, can be higher.
- The CMS will depend on allowable functionality, resulting in custom coding or even what one might consider essential and straightforward functionality.
- Multiple systems could also mean managing numerous tech stacks.
- It will necessitate higher technical caliber resources and planning.
Capabilities and Features of Headless eCommerce Software Solutions:
As we will see, the top Headless eCommerce Platforms have a different focus and come with various bells and whistles. However, without accounting for the unique needs of your enterprise, here are some of the core capabilities and essential features of headless commerce platforms:
Headless Commerce Solutions Feature List:
Across many solutions for headless commerce, we identified a list of 55 features and functions.
- Extensive Pre-built APIs and API Recipes
- Role-based User Access and Control
- Customizable Dashboards and Widgets
- Alerts and Notifications
- Product and Service Catalog
- Flexible Category Structure
- Adding and Managing New Channels
- Content Delivery and Display
- Payment Methods and Processing
- Integration with CRM
- Support of Channel Switching
- Post-login Customer Account Functions
- Integration with Customer Database and Profiles
- Ability to Segment Customers by various factors
- Personalized Content
- Customizable Experiences for the audience, channel, form factor
- Customizable Branding
- Availability of Multiple Templates and WYSIWYG Customization
- Data Migration Capabilities
- Data and Content Synchronization
- Price Discounts Management
- eCommerce Lifecycle Management
- Pay After and Installment Payment Options
- Email Marketing, Newsletter Sign Ups
- Integration to Inventory Management
- Inventory Tracking and Stock Availability
- Ability to Build and Customize Customer Loyalty Programs
- Channel-Specific Content Customization
- Omnichannel Commerce Management
- Multi-Channel, Multi-Device, Multimedia Marketing Programs
- Multi-Currency Support
- Language Customization
- Flexible Order Management Flows
- Integration with Order Management Transaction Systems
- Order and Shipment Tracking
- Integration with Product Catalog
- Promotions Management
- Facilitation of Purchase Orders
- Ratings / Reviews
- User-Generated Content
- Real-Time User Behavior Data
- Analytics and Reporting
- Returns Management
- Estimates and Sales Quotations
- Chatbots, Voice Bots, and Conversational AI integration
- Robust Search including Parametric Search
- Filtering and Browsing
- Organic SEO Management
- Integration with Shipping
- Sales Tax Calculations
- Shipping Cost Estimations
- Social Media Integration
- Out of the Box Third-Party Integrations
- Integration with Backend Warehouse Systems
Evaluating Headless Commerce Vendors:
The criteria for evaluating headless commerce vendors will depend on various factors, including:
- Support for Company-specific Use Cases
- Features to Support Core Business Requirements
- Experience in your industry/sector
- APIs and Integration Capabilities
- Support for Channels, Media, and Venues your company prefers
- Vendor Lock-in considerations (versus Open Standards)
- Cost (including total cost of ownership)
- Technical Resource Needs
- Deployment Options and Considerations
- Performance, Scalability, Extensibility, and Availability Requirements
- Information and Cybersecurity
- Support and Partnering
- Business and Financial Viability of the Vendor
If you wish for Transformation.tech to support you with vendor selection and evaluation, don’t hesitate to contact us.