E-commerce trends
Headless Commerce Explained: Benefits for E-commerce Brands
Julie Cauville
May 5, 2023
1. Understanding Headless Commerce and How It Works
Headless Commerce defines an e-commerce architecture where the frontend and backend are independent of each other. This architecture is supposed to give online stores more flexibility with customization because the frontend can be updated without touching the backend.
What do these two concepts mean?
- Frontend: The “visual part of the site” (customer-facing digital storefront, shop, online shop). It is also called the presentation layer.
- This can be much more than just a website but also channels like social media, mobile apps, and the billions of devices we use on the Internet of Things (IoT).
- Backend: All the systems, processes, and tools run in the background to handle operations and ensure your business is running smoothy. This tech stack deals with activities like merchandising, fulfilment, integrations, data storage, and checkout.
The separation of frontend and backend is essential to understand the headless approach because traditional commerce platforms tie these two elements together.
But how does it work?
The secret to headless commerce is the API or Application Program Interface 🗝
An API is a connection between the frontend and backend, sending information between the two in real-time.
Customer-facing content is managed on a back-end platform, like a CMS. With headless storefronts, you can leverage multiple backend systems depending on your needs.
These systems can include:
- Content Management System (CMS) like Shopify, Woocommerce, Prestashop, etc.
- Progressive Web App (PWA) : A progressive web app is a website that looks and behaves as if it is a mobile app. PWAs are built to take advantage of native mobile device features without requiring the end user to visit an app store, purchase, and download software locally.
- Customer Relationship Management (CRM)** like Hubspot, Pipedrive or Sellsy.
- Digital experience platform (DXP): A digital experience platform (DXP) is an integrated set of core technologies that support the composition, management, delivery and optimisation of contextualised digital experiences.
These additional SaaS (software as a service) tools build touchpoints for customers, like a mobile app or vending machine. Whenever a customer has a touchpoint with your storefront, an API call sends that information to your backend.
🌰 Headless Commerce vs Mobile first approach in a nutshell
Mobile first approach: your ecommerce is optimized for mobile thanks to a monolithic approach where the frontend and the backend are tied together without flexibility.
Headless Commerce: API-first approach, your commerce primitives and capabilities are sending to your customer touchpoints in realtime. "There’s no need to code to build a mobile-optimized landing page".
2. The Benefits of Headless Commerce for E-Commerce Brands
Headless commerce is anywhere commerce 🌍
It assumes commerce will rapidly evolve and offer our merchants to be wherever commerce and technology lead while helping them accomplish all of this in three key ways:
1. Increased personalization
With headless, customer behavior is your North Star.
Headless allows to instantly split test what you build so you can optimize your customer experience and your conversion rate.** You’re able to deploy changes to any storefront your consumers are shopping, passing data through to each and personalizing the entire customer journey.
Shoppers are 40% more likely to spend more than planned when the shopping experience is highly personalized. Choosing to go headless affords your brand the agility necessary to keep up with changing customer acquisition trends.
5 years ago, mobile traffic was accounting for less than 50% of the traffic within the e-commerce space. No surprise that most platforms were born in a desktop-first/desktop only environment.
⇒ Nowadays we observe at a 2/3+ ratio and growing at a 25% CAGR.
2. Faster time to market and less frustration.
Making changes to the website over time is of central importance for any merchant seeking performance and good branding.
Though it’s not as easy as it sounds when relying on monolithic platforms.
With headless, customer-facing work can be done independentlyn, without having to wait for backend work, and vice versa. It means you can separate copy from code and allow each team to keep moving without depending on the other to finish first.
3. More control and faster scaling.
Data have shown that 57% of IT and e-commerce leaders say their current platform would be capable of supporting their business for no more than 12 months.
Mostly because developing new features can be cumbersome for developers, especially on platforms that rely on old coding language and unmanageable environments. Moreover, **it is impossible to make those features accessible to non-tech people in a simple way** (like a marketing team for instance).
Headless plays are nice with everyone ❤️
With powerful APIs, it lets you integrate all of your existing systems (ERP, PIM, IMS, etc.) to build a shopping experience using the programming language of your choice. This also implies that any developer can build custom components locally with their beloved environment, as long as they rely on a modern language library (React.js).
It gives merchants access to the whole open-source ecosystem rather than the Shopify community. The components, when ready are pushed to the builder so they are accessible for non-tech people.
3. How Headless Commerce Benefits Shoppers
1. Balance privacy and personalization.
Highly required in a world where online privacy is top of mind for online shoppers 🔓
However, research supports the fact that consumers are still open to sharing customer data in return for personalized shopping experiences. Nine in 10 are willing to share behavioral data in return for a cheaper and easier experience.
Headless commerce equips to collect data and share it across platforms. If a consumer creates an account on an e-commerce website and continues his shopping journey on a different device (like a smartwatch), a headless architecture syncs its data across the two.
Thus, ecommerce brands can provide personalized product recommendations, save shopping carts across devices, and offer the preferred payment option based on a repeat customer’s order history.
2. A true omnichannel experience.
The customer journey is becoming increasingly more complex: 74% of customers have used multiple channels to start and complete a transaction while 76% prefer different commerce channels depending on the context.
Headless and an omnichannel approach make a perfect match because it makes shopping experiences available for both online and offline consumers.
Headless commerce can be a mobile app, an internet of things devices such as a smart mirror or watch, voice shopping, a Buy button, or a progressive web app… It turns any possible customer touchpoint into a sales opportunity while the commerce side is managed from a single backend.
3. More trust and loyalty to brands.
A really important aspect for DNVBs.
When customers trust a brand, there’s a sense of mental relief when it comes to making sure their needs are met. With headless commerce, they always are.
Not to mention the peace of mind in knowing they won’t need to spend hours chasing down a package, arguing with customer service, or battling a glitchy or unresponsive storefront.
4. When to Go Headless and How to Get Started
Going Headless can be a big investment and is not necessarily recommended to every merchant. Especially if their business is doing well enough with traditional architecture - it all depends on what they want to achieve.
💡 How much costs of a Headless Commerce Transition?
An e-commerce headless project cost from $50,000 to $500,000, plus annual maintenance costs, depending on the functionality, supporting tools, and level of customization.
Other channels built on a headless platform (like a mobile app, audio stream, or video game integration) could cost as low as $99 a month if you use an app to build your custom storefront.
There are 3 metrics, you should observe before going Headless:
1. Your website performance
- Performance < 50 : it is bad, often linked to the installation of lots of external applications (like pop-ups, etc.). The more apps you have, the more your score decreases). You should do something!
- Performance 50 <> 75 : medium, you can improve it to gain more revenue and consider a headless transition.
- Performance 75 <> 100: you are a speed champion, stay like this and consider a headless transition if you want to improve your customer experience and bring your checkout further 🚀
🛠️ You can use GTmetrix: to calculate your website's speed for free. It also gives you the top issues impacting your performance so you can work on them.
2. Your traffic on mobile
If More than 70% of your website traffic is on mobile.
3. Your GMV / Revenue
It 's recommended to go headless from about 1M GMV but it depends on the 2 other indicators too.
You also have to focus on your average cart: it might be more relevant for brands which realize 1M GMV with a €60 average cart than one around €500.
If you check all the boxes, you have 2 choices :
- Building your headless commerce architecture from scratch (usually more recommended for big businesses).
- Using platforms that already have headless architecture available (usually more recommended for small businesses).
Here is a quick overview of how it goes:
1. Determine if you should keep or switch your commerce platform.
- Adding API might be the best route for small businesses but also many mid-brands opt to switch to a SaaS (software as a service) solution which offers more scalability and flexibility in the long run.
- Shopify has a lot of APIs that can help our merchants go headless without ditching their ability to use the functionality they already have.
2. Pick a headless CMS.
- If you are selling on multiple channels, a headless content management system (CMS) is the best way to go. You can use a single CMS to create content specific to each channel and user experience and the API will sync their frontend and backend, sending the right content to the right touchpoints.
- An open-source system gives ultimate flexibility, but you’ll need more specialized knowledge to build and deploy it.
- SaaS is a great solution if you want to get started quicker and leaner.
3. Sync your CMS and APIs.
The critical step of the process - is when it comes to a smooth system that integrates the frontend and backend.
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