What is Headless Commerce and Why Do We Need It?

June 16, 2022
Guides
Team Streamoid

eCommerce has been evolving at a rapid pace over the past decade. Brands started exploring newer channels to sell and advertise, beyond their own physical stores and websites. We saw the rise of mobile commerce, the evolution of social commerce, and the market domination of marketplaces like Amazon. On the tech front too, there have been tectonic shifts that are changing the way brands reach, engage and convert customers.  

Customer behavior and preferences are ever shifting. They are engaging with brands on several touchpoints across multiple devices before they make a purchase decision. They are leveraging IoT devices, progressive web apps, social media platforms and so on to purchase and expect brands to be present across all the touchpoints they prefer. They are embracing technology such as instant checkouts, smart assistants, AI-powered tools, visual search and so on.  

Forward-thinking brands that are equipped to keep pace with or stay ahead of the market trends and customer preferences have flourished. The brands that haven’t are wondering how they can get in on the action without having to build tech solutions from scratch or investing insane sums of money on building a tech solution that will become redundant soon.  

Well… the answer is going headless!  

In the article, we take a deep dive into headless commerce and its many benefits to eCommerce companies.  

Image Credit: BigCommerce

Understanding Headless Commerce

What is it?
Headless commerce is an approach wherein the frontend or presentation layer of an eCommerce application is decoupled/ separated from its backend systems/ business logic of the application. Since content, services and customer experiences are delivered and managed without the application’s head – the application presentation layer, headless commerce gets its name.  

How It Works?
The frontend or the presentation layer includes the UI, design elements (colors, layouts, text styles, etc.), buttons, chatbots, etc. For instance, the look and feel of the website, apps, social commerce, digital marketplaces, voice commerce, etc. are the frontend of the eCommerce application.  

The backend systems/ business consists of the commerce functionalities and business logic that drive sales and customer experiences. The backend commerce functionalities include infrastructure, pricing, security, checkout, inventory, payments, orders, customer account management, etc.  

In headless commerce, the presentation layer and backend commerce functionalities are separated from and work independently of each other. The focus of headless architecture are the backend processes which work invisibly in the background. APIs are used to deliver content, services and functionalities to separate frontend applications. This way, customer experiences are not broken or disconnected across the different channels and platforms.  

The backend developers can quickly update, modify or redesign features to augment the business functionalities. For instance, the backend team may want to add new payment methods to payment functionality to empower customers with more choice. In a full-stack monolithic architecture, doing so would have ripple effects on the entire application, which is why developers find it difficult to evolve with the full-stack architecture.  

The frontend developers can make changes and update the UI or other elements without interfering with the backend. They have the flexibility to design customized UIs, create unique API-driven customer experiences across multiple touchpoints, etc. by choosing and customizing features and functionalities for each touchpoint, user group and goal. This way, they can drive higher engagement, sales and ROI from eCommerce campaigns.  

For instance, frontend developers can choose to add the instant checkout and shopping cart features to their social channels. They can do so in a hassle-free manner by simply integrating the payment API with the UI. When the user clicks on the button on their smartphone or while scrolling on Instagram, the API makes a call to the backend application layer to process the order.  

When transactions are completed in the headless architecture, the API facilitates communication between the frontend and the backend systems such as the PIMS, WMS, CRM, payment processing systems, etc. to update records accordingly.

Image Credit: elasticpath

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Traditional eCommerce Vs Headless Commerce
Traditional commerce models are monolithic models where the frontend and backend are tethered together. These full-stack models contain everything from the business logic and functionalities to the design, UI and so on. Even small changes impact the rest of the components in the application. So, developers cannot flexibly make changes or customizations or modifications on either layer without spending a great deal of time on making changes to the code, databases, features, the frontend platforms and so on. This reduces their agility, flexibility and speed to market.  

In the headless commerce models, the presentation layer and the application layer/ business logic are separated. So, frontend and backend developers have higher degrees of flexibility, freedom and control. They can seamlessly adapt to the fast-paced market trends, customer behavior and tech developments. Frontend developers can hyper-personalize experiences without being constrained by the impacts these changes will have on the rest of the application. Testing and iterations are much easier too. So, you have accelerated speed to market.  

In headless commerce, the users drive their experiences, not the eCommerce business. They decide what, where, how and when to purchase products or engage with the brand. Brands, on their end, can keep expanding to newer channels to reach wider audiences while continuously customizing experiences. In traditional commerce, the experiences are predefined for customers with little room for customization or personalization. There is limited room to add new channels as it would mean starting from scratch and building an entire app.

The other major point of difference between traditional eCommerce and headless commerce is the page loading speeds and platform performance. Several functionalities are packed into the application, this leads to a larger number of API calls and creates technical constraints that lead to slow page loading in traditional eCommerce. In headless commerce, the separation of the layers and the use of several modern technologies help accelerate page loading speeds.  

Even though third-party integrations are simple in traditional eCommerce, the frontend experiences are not as seamless. With the headless architecture, integrations on the backend do not cause broken customer experiences.  

Image Credit: objectedge

Why Headless Commerce?  

From The Organizational and Employee Perspective

Better Employee Adoption
New technologies could mean steep learning curves, causing high levels of employee reluctance to adoption such technology. The simplicity of the headless architecture means everyone can access and update the frontend without technical, programming or coding skills. For instance, a marketer can finetune or customize customer experiences without waiting endlessly for backend teams to work on coding and database changes.  

For backend developers, the processes are simplified, and the best headless platforms allow developers to customize their toolkit, thus, improving familiarity. Overall, there is better employee adoption when you choose a headless architecture along with a modern commerce platform.  

The Right Tools for The Job
With headless commerce, brands and their developers can pick and choose tools to custom-build user experiences that make their brand stand apart amid the growing clutter and competition. The all-powerful APIs ensure that brand experiences are coordinated and consistent across channels.  

Flexibility And Familiarity for Developers
With headless commerce, you can choose eCommerce platforms (the engine for their online store) and a frontend (CMS, DXP or a custom solution) that works best for them. The best platforms enable brands and developers to customize the toolkit and work from a single, cohesive dashboard to manage multiple touchpoints.  

Backend developers do not have to worry about updating/ modifying the presentation layer while making modifications, adding new features, making new third-party integrations, etc. And frontend developers can focus on crafting authentic customer experiences.  

Faster Time to Market
Frontend developers can independently innovate, update, modify and reshape experiences for different devices, touchpoints and goals without impacting the business logic or functionalities. Since the data, content and products are stored centrally and accessed via APIs anywhere, the headless architecture accelerates the speed to market.  

Complete Ownership and Control Over Site Architecture
The frontend and backend environments are not tethered in the headless architecture. This separation puts brands in the driving seat. They are not tied up to pre-packaged tech stacks that do not help them achieve their vision. They can swap out parts of the application that aren’t working for them. For instance, if they have a frontend solution that they are happy with but want more from the backend system, they can upgrade/ modify/ change the backend system.  

Time And Cost Savings Across IT
With legacy, monolithic tech stacks, iterations, optimization and modifications take weeks and months. It affects the agility of eCommerce brands to respond to the dynamism of the business environment, customer needs and the tech landscape. And the business suffers.  

With headless architecture, you can keep iterating the parts of the application – be it features and business logic or the UI. The best headless solutions have no-code platforms where making iterations take just a few clicks or some slight code and a few minutes. Testing and optimizing experiences are seamless as well. So, it is easy to make, test and deploy changes to your commerce experiences at a rapid pace.  

Omnichannel Adoption Made Easy
There is no platform-specific content like social content or web content. There is content and data that adapt automatically to the touchpoint the user chooses at a moment’s notice. A headless CMS (Content Management System) would draw information from across databases and sources (CRM, ERP, PIMS, OMS, etc.) to service customer requests.  

Data, content and products are stored centrally and accessed via APIs, allowing brands to go omnichannel effortlessly. So, eCommerce brands can expand quickly to newer channels and enter newer regions.  

Greater Competitiveness
Through continuous testing and optimization cycles, you can gain a better understanding of what customers want and go above and beyond their expectations better than other retailers, thus, improving your competitiveness.  

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Impact on Customers  

Instantaneous Changes and Optimization
With the decoupled frontend and backend systems, you can seamlessly iterate and improve customer experiences across multiple channels without having to iterate your backend systems. Updates can be rolled out at a rapid pace. Since only parts that are modified are updated, the length and number of outages are reduced.

Rich, Consistent User Experiences
With headless commerce, brands can seamlessly create and deliver rich, consistent customer experiences across multiple channels and devices. While the brand tonality and style can be consistent, the UI and the experiences can be hyper-personalized.  

Add Transactional Functionalities to Existing UIs
If you have a content website or channel that does not have transactional functionalities, headless commerce allows you to add a separate UI layer. This way, you can easily make the existing UI transactional without disrupting the entire tech stack.  

Reduce Marketing Time and Costs
With headless commerce, your marketing team has full control over customer experiences. They can design new customer experiences, continuously iterate UIs, roll out multiple touchpoints for different customer segments and goals, innovate to drive competitive advantages and so on, without hurting the backend processes or depending on backend developers to make coding changes. They can roll out campaigns faster and without expending large sums of money in setting up websites or adding new channels.  

Greater Conversion Rates
eCommerce brands can improve conversions in organic ways with headless commerce. They don’t have to spend large sums on paid advertising. They can personalize and customize experiences across multiple channels and keep iterating these experiences with the headless architecture. They can try different templates, run continuous tests and gain a better understanding of their audiences to improve experiences and conversions at a much greater pace than traditional eCommerce businesses.  

Improved Website Performance
Since the frontend and backend are separated, headless systems are easier to update and maintain. They help reduce page loading speeds and improve responsiveness and performance of the website.  

Conclusion
Headless commerce gives eCommerce brands the necessary agility and flexibility to keep optimizing shopping experiences amid the growing complexity and dynamism of the market and the tech landscape.  

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