Technology and the rise of eCommerce have revolutionized how people shop for goods and services online. However, browsing and buying from an online store can often take time and effort.
The checkout process can be particularly frustrating as it usually requires customers to create an account, fill out a lengthy form, and enter their payment details.
What is Headless Ecommerce?
A relatively new type of eCommerce has emerged to address these problems: headless ecommerce. Headless ecommerce is an approach to eCommerce that separates the front-end experience from the back-end systems.
It allows businesses to manage and customize their customers' experiences without being hindered by the limitations of a specific eCommerce platform.
This article will provide detailed insight into what is headless ecommerce and its potential impact on the future eCommerce market.
Current State of Headless Ecommerce in the US
Experts estimate that a compound annual growth rate (CAGR) of 6.9%, which may reach $3.5 trillion by 2025, is making businesses and e-commerce retailers look for new ways to manage volume and logistics.
This has led to significant interest in headless commerce trends. A Vanson Bourne research involving 400 employees found that, as of 2021, 64% of enterprise organizations were using headless ecommerce, an approximately 25% increase from 2019. This figure is expected to proliferate in the next few years, partly due to eCommerce's growth.
Many investors are also funding headless ecommerce platforms. Since 2019, several platforms have raised nearly $330 million to explore headless eCommerce technology.
As per Forbes, $1.65 billion has been raised to fund headless technologies, with several experts claiming that this will shape the future of eCommerce.
Experts also agree that fulfillment systems, marketing and sales teams, and even content management systems or CMS will have more control over their processes since they can be decoupled from the front-end part of the business.
Companies can integrate end-to-end automated warehouse management systems like Hopstack with other CRMs, best ecommerce tools and eCommerce websites, ensuring a seamless customer experience even on omnichannel platforms.
What is a Headless Ecommerce Platform?
A system separating an eCommerce platform's front and back end is known as a headless ecommerce platform. Among the two components of a headless ecommerce platform, the front end is the customer-facing aspect where the shoppers interact. It includes product pages, user interfaces, etc.
The back end of headless ecommerce platforms includes a store's technical aspects, such as order processing, shopping cart, checkout, tax calculations, product shipping, return management, etc. On the other hand, the back end is the part that the customers don't see. The business logic aspect helps to run the entire customer experience.
The most famous examples of headless ecommerce platforms are Salesforce Commerce Cloud, Shopify, Magento (Adobe Commerce), BigCommerce, Swell, Nacelle, Commerce layer, etc.
Comparison between Headless Commerce and Traditional Commerce
There are two main types of eCommerce: headless commerce approach and traditional commerce approach. Traditional commerce is the older model where a single platform handles everything or where the platform predefines the shopping experience.
This model can be a good option for e-commerce businesses that don't want to manage multiple platforms or can't handle all aspects of eCommerce sales, such as storage, delivery, and logistics.
A headless commerce platform is a newer model that doesn't rely on traditional eCommerce platforms. Instead, it uses application programming interfaces or headless commerce software APIs to connect to different parts of the business, like accounting, marketing, and shipping.
This allows companies to use the best tools for each task instead of being limited by a single platform.
Three things differentiate headless ecommerce from the traditional model:
- Headless commerce solutions are not limited by the front-end design or structure.
- Headless ecommerce software offers limitless personalization and customization for businesses and customers.
- Headless ecommerce saves time, effort, and cost for all users.
Impact of Technological Advances on Headless Ecommerce
Developments in artificial intelligence, Progressive Web Apps, and even UX/UI (user experience and user interface) create new opportunities that drive headless commerce trends. Two such significant technologies are APIs and microservices.
Application Programming Interface (API)
An API, or application programming interface, allows different systems to communicate with each other. It enables different parts of a business to work together seamlessly, even using additional software.
In the context of eCommerce, APIs allow headless e-commerce software to connect with a third-party provider (such as a shipping company) to automate tasks such as order fulfillment and shipping.
Most headless e-commerce platforms offer some level of API integration, but the degree of integration varies from one platform to another. Some venues provide limited API capabilities, while others are more extensive and allow for high customization.
Microservices
Microservices are small, self-contained applications that can be used to build a more extensive application. This makes them very scalable and easy to manage and update.
Microservices help design an application as a set of small services that communicate with each other, allowing more flexibility, scalability, and easier testing and debugging.
Microservices can be especially useful in eCommerce applications that may require different parts of the application to be scaled up or down depending on traffic.
For example, a microservice-based architecture can create a headless eCommerce store where a separate service would handle the checkout process, allowing the main website to scale up or down without affecting sales.
Investing in headless Ecommerce Technology: Is it viable?
The market for headless commerce platforms presents a vast opportunity, but it is still growing. E-commerce businesses are exploring this new model, which can lead to a shift in the next few years. Several indicators show that going headless might be the future for many businesses.
Bridging the Growth Gap
Many small- to medium-scale businesses experienced sudden growth during the pandemic. This has led to enterprises needing flexible headless ecommerce software to help their merchants and suppliers meet demand without deconstructing and redesigning their front-end and back-end processes.
Scaling Costs
Creating new platforms can be costly, and expansion can only make it more expensive. Businesses need to develop modular solutions and deliver what is needed the most.
Headless ecommerce software will allow companies to switch to better CRMs, create new website designs, and use new digital warehouse platforms that can address logistics and storage issues.
Businesses can still use their end-to-end warehouse operating system like Hopstack to manage their inventory and delivery system while continuing their operations, even if upgrading their website or adding a new marketing campaign or advertisement.
However, the eventual winner might be any company combining the best elements of traditional eCommerce with headless eCommerce, especially for companies needing support to grow into headless commerce platforms.
The expansion that will continue in the next few years will offer opportunities for software providers who can provide merchants, suppliers, and logistics companies with an optimized way of creating seamless customer expectations and experiences online.
Advantages of Headless Ecommerce
Since headless eCommerce relies on APIs to connect to different front-end systems, it allows businesses more flexibility and control over their online store's design and customer experience.
Below are the benefits of using a headless ecommerce platform.
1. Customization and Personalization
Businesses can easily create custom designs for their store that reflect their unique brand identity.
Customer data is readily available, so companies can create targeted digital marketing strategies and campaigns based on user activity and promote products and services that are more personalized to improve customer experience.
2. Omnichannel Opportunities
Headless ecommerce platforms can easily integrate with other systems, such as marketing automation or customer relations management or CRM software.
It creates more marketing opportunities in other customer channels through mobile apps or brick-and-mortar stores.
3. Improved Customer Experience
The high level of customization and personalization means that companies have more control over the customer experience on various channels, such as mobile apps and online websites.
It improves the agility of the marketing campaigns and makes them better suited to specific customer needs and desires. Headless commerce uses backend data, which makes marketing campaigns more targeted and suited for customers.
4. Improved Conversion Rates
Headless commerce allows the separation of the front-end/backend activity and makes it easier to test technologies and optimization checks that can improve customer experience.
This further improves conversion rates, primarily when a company can address issues regarding delivery and logistics.
5. Improved Flexibility
Businesses have more flexibility when it comes to interacting with customers. Merchants and retailers can offer different front-end interface options, including smart technologies, platforms, and new devices. Users can change the front end without disturbing the backend processes.
Disadvantages of Headless Ecommerce
Despite the many advantages of headless commerce platforms, some drawbacks must be addressed. Here are some of the more challenging ones that companies must consider.
1. Tracking Conversions and Sales Can Be Tricky
It can be challenging to track conversions and sales. With headless ecommerce platforms, product pages are hosted on a different platform, so it can't easily track how many people are coming from the site and converting.
2. Website Update Challenges
Designing and managing the website can pose more challenges. Managing and updating content can be more difficult because a separate team or department often drives it.
This can lead to communication breakdowns and conflicts over who owns which pieces of content. Tracking user engagement with content can also become more difficult because that data is often scattered across different digital commerce platforms and tools.
3. Additional Costs
The business might need to spend more on maintaining the front-end and back-end of the website, which are separate while using a headless eCommerce platform.
Both aspects would require different expenses for hosting and maintenance, so additional costs can be expected for maintaining any digital transformation.
4. Training Teams and Learning Curves
With front-end and back-end decoupled, the teams must depend on management for additional training for logistics, marketing, storage, and warehouse associates.
These teams need to understand the site's design templates, upgrades, bugs, and other troubleshooting they may need to do.
The marketing team will also need to rely more on IT to update content or explore new technologies to prevent delays in time-sensitive campaigns.
Headless Ecommerce is the Future
Digital is the future. The more we learn to integrate technology and human capabilities into customer service and eCommerce, the more optimized and enjoyable the customer experience is.
The growth potential of a business depends on how much innovation and customization are used. So, headless architecture is the best answer for any company wanting to be part of eCommerce's big future.
Having an end-to-end warehouse platform like Hopstack could help to manage some of the backend processes and will give a big step into the headless commerce future.
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