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Headless Commerce:
Is Now the Right Time for It?

More than $1.65 billion in funding was raised for headless technologies during 2020 and 2021, as reported by Forbes. Retail giants like Amazon and Target have already embraced the trend. In 2020, more than 60% of ecommerce leaders believed that headless commerce could significantly improve their conversions and engagement, per the eCommerce Leaders Survey.

Clearly, headless is hitting the headlines. Retailers that are considering making an investment in headless commerce must first understand the intricacies tied to this technology. While it provides distinct features, there are drawbacks to evaluate as well. A look at how headless commerce works and its complexities will help retailers determine if now is the best time to forge into this realm.

What is Headless Commerce

In an ecommerce store, there is a front end and a back end. The front end—similar to the brick-and-mortar concept—is what customers see. It includes the font, text colors, style, and design of the website. It could also portray images, graphs, charts, and other visible features. The backend refers to parts that tend to be hidden from customers’ view. This could be the infrastructure related to billing, security, checkout, and inventory, among other functions.

Early, basic forms of the ecommerce store tied the front end and back end together. As such, any changes made to the front end would mean that the back end would have to be adjusted too. Making a change could be tedious, time-consuming, and costly. In addition, channels in this arrangement are not integrated. Any updates to what a customer can see on a website will not automatically transfer to a mobile app, and so on.

Headless commerce separates the front end and back end of the ecommerce store. This makes it easier to change the design of the front end, as it is not necessary to update the back end at the same time. Headless commerce also enables faster site speeds. This allows customers to quickly access information and carry out a transaction.

The Pros of Headless Commerce

With headless commerce, retailers can build an omnichannel experience. Headless commerce uses Application Programming Interfaces (APIs), which serve as a bridge to share information between the front ends and the back end. A customer might be viewing a pair of sunglasses on a retailer’s app. If they click “Add to Cart,” an API request will be sent from the front end to the back end, and the shades will be placed in the online checkout point. Later the same customer may turn on their laptop and pull up the retailer website. The sunglasses they were viewing from the app will appear in their online shopping cart. If they click “Buy Now,” an API request will go from the front end to the back end, signaling the transaction process.

Having multiple front ends that are integrated provides the opportunity to personalize the shopping experience. If a shopper creates a profile on a retailer website, the information entered can be synced with other devices. When the same shopper asks their Alexa at home to make a purchase, the personal information for their profile won’t need to be re-entered. Shoppers value these seamless journeys. According to the Treasure Data and Forbes Insight Survey, 74% of consumers say they their experiences influence their purchases.

After an initial transaction, customers appreciate having information related to their payment method and shipping address stored. Along the same line, products can be recommended based on past purchases. Among smartphone users, 58% reported feeling more favorable toward companies with mobile sites or apps that remember who they are and their past behavior, according to a Google study.

Flexibility is at the center of headless commerce. Designers can focus on the front end. They might try new layouts, change font sizes, and switch out images. Meanwhile, programmers can spend their time on the back end. They can add in a new function or make a change without having to worry about disrupting the user experience.

With a headless solution, marketers have the freedom to innovate and create specific experiences across different channels. They may add sharing and shopping features on social media platforms. They could put in a function that saves the items in an abandoned shopping cart and notifies shoppers to see if they want to complete the purchase.

The Cons of Headless Commerce

The core features of headless commerce come at a price. For large retailers, funds may be readily available to implement the system. It might also be a priority for companies looking to have a presence on different channels. Due to the high investment costs, small retailers may lack the resources needed.

Setting up the architecture for headless commerce is a multi-layered task. The IT and development hours required to establish the system could be extensive. There is also ongoing maintenance to consider. A company may not have the in-house staff and technology solutions needed to set up headless commerce. Given this, retailers often work with a third party to implement and maintain the system.

Startups with limited budgets may decide to wait with headless commerce. The technology could be added later when higher levels of funding are secured. As the company grows, it may become necessary to provide seamless customer experiences across multiple channels. At this point, headless commerce could be considered.

Headless commerce provides customer data, but if the insights are ignored, retailers are missing out on key information. A time commitment is required to ensure the right data is monitored. Retailers that don’t have the resources to manage information may first want to work on improving other areas of their operations. Once departments are integrated and staff members are trained, headless commerce could be considered as an option.

Deciphering Next Steps for Commerce Solutions

Headless commerce holds the potential to provide ease. Developers and programmers can work independently to improve the system. Customers appreciate the personalized experience. Repeat buyers prioritize simplicity. Marketers thrive on the chance to implement engaging strategies across channels.

Before barreling forward with headless commerce, a careful cost versus benefits analysis should be performed. The investment costs will need to be evaluated. Retailers will want to consider their own capabilities for implementation. In most cases, organizations will reach outside of their own resource pool. A third party can provide the expertise to orchestrate and develop the system. After it has been set up, an outside source may help maintain it.

In addition to the expenses, the potential revenue should be considered. If current systems are clumsy, shoppers might click away before finalizing a transaction. Having to re-enter their payment method and shipping information for each channel may frustrate repeat buyers. In these cases, headless commerce could lead to improved sales and stronger customer retention.

If the decision is made to hold off with headless commerce, retailers who want to remain relevant will keep it in mind for the near future. The high levels of funding for this technology demonstrate the strong demand for it. Customers are coming to expect quick access, seamless shopping transactions, and personalized recommendations. For their upcoming transactions, regardless of the device they’re using, they’ll turn to retailers that provide the best experience.

Gerard Szatvanyi

Author: Gerard Szatvanyi

As a founding member and CEO of OSF Digital, Gerry has more than 15 years of experience managing start-ups and medium-size IT businesses and driving them to peak performance. With background in Enterprise Applications, IT Services and Consultancy, Gerry's impressive client and business portfolio sets him in the new breed for global entrepreneurship.