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Everything You Need to Know About Headless Commerce

At the peak of the COVID-19 epidemic, the ecommerce industry grew tenfold in ninety days. As physical shops closed as a result of the worldwide shutdown, ecommerce increased to a record 16.4 percent of total global retail sales.

The move to online shopping is going to stay for a long time, as consumers demand a consistent experience across different touchpoints and channels ranging from Internet of Things devices to Progressive Web Apps and mobiles. To keep their consumers satisfied, ecommerce companies must provide seamless, customized purchasing experiences.

Today’s digital environment is more consumer-centric than ever before. This has happened because of the Internet of Things (aka IoT) and the web.

As increasing number of purchases occurs outside of the conventional website, such as via IoT channels, social platforms, mobiles, etc., the traditional eCommerce systems are unable to react quickly enough to these new touchpoints.

Businesses that depend on eCommerce as a critical component of their business model must change to maintain a competitive advantage; as a result, many are shifting to digital delivery using headless commerce.

Therefore, how can businesses adapt to shifting consumer expectations? To remain ahead of the market and meet consumer expectations, businesses will need the adaptability and agility provided by headless commerce.

What is Headless Commerce?

Headless commerce is all about separating the presentation layer, that is, the front end from the back-end infrastructure. The front end or the presentation layer includes the themes and templates of an ecommerce mobile app or website, including videos, images, and content.

The decoupling enables businesses to have more control over their offering of customer experience, enabling them to connect with consumers more effectively and remaining way ahead of what customers expect.

Headless commerce enables them to provide a customized and consistent experience across different channels by connecting the presentation layer with the backend infrastructure using what is called APIs, which is an acronym for application programming interfaces.

No matter the consumer access point, a genuinely headless commerce platform offers powerful commerce capabilities such as a product information management, merchant tools, shopping cart, and promotions. Additionally, a true headless eCommerce system may simply connect to any customer experience presentation layer or the front-end using API.

Thus, with headless commerce all you get is ‘content.’ There is no such thing as web content, or social content, or display content. Apart from just ‘content,’ you also have ‘data,’ capable of adapting at a moment’s notice.

Headless Commerce Architecture

A subset of decoupled or disconnected architecture is the headless architecture. It is designed to send your content or data to a variety of platforms through APIs.

In a headless design, all processing occurs in the background, with data made accessible to distinct frontend apps through commerce APIs. The backend – which includes infrastructure, pricing, checkout, and security – operates in the background silently. The frontend and backend communicate with one another through straightforward API calls.

A headless commerce architecture requires the development of a headless content management system (CMS).

Ahead of the scenes, a headless CMS for any purpose (including commerce) is composed of distinct components.

The backend database stores many types of information, including textual copy and pictures.

However, in contrast to headless designs that just provide content, headless commerce needs a few extra technologies.

Headless commerce makes use of a separate inventory management system in along with the content’s backend database.

Typically, other backend systems include CRM or Customer Relationship Management systems, multi-channel security systems, and payment processing platforms.

After certain steps are completed, the API is responsible for pulling data into particular systems, rather than just delivering material to various channels.

Consider the following scenario: a consumer views a product on a mobile browser and makes a purchase.

If they are a new client, they will complete a form that will be used to update the business’s customer relationship management system.

Additionally, personal information may be obtained through a platform such as Apple Pay, Google Pay, PayPal or any service that facilitates the checkout process.

Following the completion of the transaction, the API updates backend systems by calling on data to record the money exchange, save the consumer information, and update the inventory system.

How Does Headless Commerce Work?

A lightweight API, by definition, allows the distribution of material stored in a backend system to a much larger number of channels than a “theme” can, since themes are often designed for a particular endpoints.

In headless commerce architecture, the API may be used for pulling data to a large number of endpoints, including automotive commerce, wearable technology, IoT devices such as Amazon Alexa, smart appliances, smart TVs, etc., kiosks, cross-platform applications, and social networks, and so on.

This future-proof architecture basically guarantees that ecommerce distribution can expand in the future to accommodate new and innovative goods.

Unlike a configuration optimized for content distribution, a headless commerce architecture needs an inventory system for product management.

Inventory management systems may communicate with wholesalers, suppliers, or vendors, depending on the distribution network’s structure.

Additionally, it may link to business-owned distribution facilities, enabling companies to ship from nearby warehouses, thereby saving a lot of money.

Additionally, businesses will need extra backend technologies to ensure the success of digital commerce. By monitoring client preferences in a CRM and using data science techniques to get a deeper understanding of their consumers, organizations may significantly boost revenue via recurring business.

By establishing a database and using analytics to examine preferences and trends, companies may improve their connection with current consumers and get a better understanding of purchasing habits for a wider population.

The primary constraints are imposed by front-end developers’ ability to craft an appropriate user experience for every frontend. On the positive side, this results in less backend work, since the API in most designs is capable of easily transferring data across a broad range of current systems.

The headless commerce architecture works well with systems using readily queryable open databases.

Frontend developers may simply integrate the stripped-down data using frameworks such as Reach or Angular.

By using APIs like the ones provided by Bloomreach, the primary issue of marketers being too dependent on web developers for style adjustments or content creation is resolved. Additionally, this eliminates the need or necessity for a second, linked CMS with WYSIWYG capabilities.

Of course, a safe payment system is required for online sales as well. While some businesses develop their own, the majority of the others incorporate existing, secure payment systems.

In a headless commerce architecture, the API enables communication between payment processing, CRM system, inventory management, and several other systems for updating records appropriately after a transaction is complete.

In headless commerce architectures, the API enables smooth information sharing across systems, enabling a retail environment that is truly omnichannel.

Traditional eCommerce vs. Headless Commerce

Historically, the majority of ecommerce businesses relied on a single platform to handle both the front-end user experience and back-end processes. Because of its monolithic system, it was impossible to change the front end without also modifying the back end. This approach may work effectively for companies without big development teams in the short term.

Even small changes, on the other hand, become time-consuming tasks, resulting in a lengthier implementation period. Additionally, traditional ecommerce systems limit consumer experiences due to their lack of creative freedom. Additionally, legacy systems make it difficult to embrace new technologies that increase consumer touchpoints, reducing the company’s overall agility and competitiveness.

However, in order to fulfill consumer expectations and overcome competitive challenges, you need a platform with a scalable architecture to support your company. That is when headless commerce enters the picture.

In this decoupled architecture, creative teams improve the user experience and enhance consumer engagement and conversions by using headless Content Management System such as WordPress or DXPs (that is digital experience platforms) such as BloomReach as presentation layers or the front-end layers.

On the backend, you’ll find a payment gateway, an inventory management system, an accounting system, and a subscription and billing platform that takes care of things like data processing, checkout process, billing and payments, product inventory, and customer account management.

APIs are used to establish and maintain connections and communication between the backend and the front-end systems. Headless ecommerce systems offer APIs and technologies that enable you to create a consistent brand experience across different channels using a single view of your data.

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Image Source: Iflexion

Three Core Differences Between Headless and Traditional Commerce

Quick Scaling for Reaching New Touchpoints Using Headless Commerce

Frontend developers may use the API to get material from backend systems and distribute and arrange it using whichever frameworks they want.

When something new becomes available or a company chooses to capitalize on an underused existing channel, developers may build bespoke delivery models to send content and products to these endpoints.

Headless Commerce Allows Quicker Content Delivery

Despite the addition of other systems enabling headless commerce, the API may be used to send and pull data without interference from other programs or processes.

Frontends make API requests to get just the material required. Coupled systems generally slow down at times of high traffic since resources are not shared.

Headless Commerce Improves Security

Business systems should be kept as distinct as feasible in any networked environment, with precisely calibrated ACLs or access control lists to restrict access from individuals and systems outside the network.

Since headless commerce depends on many systems cooperating, which removes the prospect of a hacked account causing havoc.

The Four Drawbacks of Traditional Commerce

Because the traditional commerce follows a monolithic system, it is plagued with at least four major issues that include:

Constrained Framework

In traditional commerce, the limitations of the framework are often stifling. Developers are constrained by matching toolkits, which may obstruct functionality, delivery, and layout.

Weak Security

Because administrators and content producers all access the system via the same interface, data-related dangers are significantly increased.

While the accounts of editors and authors may be set with restricted permissions, compromised accounts having full admin rights or elevated rights might provide unauthorized individuals access to anything from payment information to customer data, and even content.

Limited Design Possibilities

Limited design capabilities are yet another major issue with a predefined framework.

While themes and layouts may be changed manually, the fact that these systems are built on many levels of programming implies that unexpected effects may occur. This significantly complicates the process of correctly delivering material to a large number of channels.

Challenging Third-Party Integrations

It is possible for developers to create plugins or even purchase existing add-ons to connect with external systems. Unfortunately, the experience is quite often a bumpy one. Contrary to that, the experience offered by an API in any headless commerce system is smooth.

As a result, some organizations may rely on an alternate method like manually inputs for porting customer and inventory information directly into the system backend, leading to loss of time.

Headless Commerce Solves the Drawbacks of Traditional Commerce

Headless commerce avoids the aforementioned issues by utilizing the API as the central interface to external business systems.

Admins may secure each system by restricting access to each machine to those who need it and by limiting the quantity of data accessible to the API.

Due to the fact that there is no code associated with the backend database that holds content, endpoint layout can be easily modified by the frontend developers using the most appropriate framework.

This implies that the information and goods are not limited to the websites or applications for which they are designed; a touchpoint may be any device connected to the internet.

Retailers may benefit from genuine omnichannel design by creating bespoke layouts in a fraction of the time it is needed to grow a linked system.

Additionally, this allows for A/B testing, which can be compared to consumer interaction to identify the most successful functionality and layout.

When one design has a higher conversion rate of users to customers, the less successful system may be phased out in favor of the more effective design.

What Makes Headless Commerce Popular?

Increased Customer Expectations

The contemporary age of business has afforded the consumer many benefits. As a consumer, accessing and enjoying anything you want is as simple as a few taps or clicks.

Customer expectations have risen in several areas, including frictionless shopping, availability, and service and product quality.

This has placed retailers and other enterprises under pressure to provide services and products as fast as possible. This is the reason for increased popularity of headless commerce.

As per Gartner, in 2019, API-driven headless commerce was the top investment priority for organizations and businesses.

Increased Availability of Channels

A successful digital strategy for sellers entails reaching out to as many potential customers as utilizing as many channels as they can.

Without the constraints associated with conventional designs, headless commerce enables the direct delivery of goods and services to customers in any format.

Using headless architecture to transition or grow commerce allows companies to access a wider audience and significantly boost revenues.

Competitive Advantage

Today, shops must support a broader range of devices, provide exceptional and customized consumer experiences, and finally, become quicker and more adaptable via the use of the technologies that allow all of this.

However, historical commerce systems are very rigid since they were designed to address different problems.

The reason why headless architecture is so popular is because it can separate user experience and commerce functionality & performance, allowing businesses to offer their consumers the best possible purchasing experiences.

What are the Benefits of Headless Commerce?

In case you want to scale up your eCommerce business, switching to headless commerce will bring several benefits to the table. They are:

Increased Personalization

Because the headless commerce strategy decouples the front-end display layer, you may test customization techniques without affecting your back-end services. Personalization contributes significantly to the development of long-term consumer connections and brand loyalty.

Marketers may use all the consumer data collected across all touchpoints to develop more relevant promos and offers that connect with customers and help them have a positive shopping experience.

Decreased Marketing Time

Consumers nowadays are very demanding, and companies must provide what consumers want, when and where they want it, in order to remain ahead of the competition. Headless commerce enables organizations to stay current with trends and technology and rapidly deploy new products at a fraction of the cost and time required by conventional systems. Development teams spend less time making improvements to the user interface. The decoupled headless commerce architecture enables seamless integration with any system that may assist in reaching consumers more quickly and increasing conversions.

Fast Experimentation

Experimentation with various user experiences and pricing models may be transformative in ecommerce. Headless commerce has a variety of applications, including launching new products or services, testing various promotions and discounts, experimenting with alternative page layouts, and generating more engaging user experiences without modifying back-end systems.

Consistent Customer Experience Across All Channels

Headless commerce enables you to add additional customer points that are driven by the same set of APIs, ensuring data and functionality consistency. Consumers now use a variety of channels to research and purchase goods, and these touchpoints serve as an extension of your brand.

Headless commerce solutions enable you to maintain a consistent brand presence across channels without re-architecting your platform and to allow transactions without requiring consumers to visit your online shop. For example, you can add the ‘Shop Now’ button to your Instagram posts and convert it into a mobile storefront.

What are the Problems of Headless Commerce?

It is not all hunky dory when it comes to headless commerce. There are some obvious drawbacks that you must account for. For starters, transitioning from a traditional commerce platform to headless commerce is going to be challenging.

Here are the problems with headless commerce:

Increased Ownership Expenses

Because the majority of headless systems do not have a frontend, you must factor in the expense of developing one. Additionally, since this is a pay-per-use design, the total ownership cost increases as the integration count increases.

Adaptable But Complex

Smaller teams may have difficulty managing a distributed system compared to a centralized solution. You’ll need to work with numerous suppliers and assign separate teams to different blocks.

Replatforming is Difficult

While there are certain long-term advantages to moving to a headless commerce, eCommerce replatforming may be difficult and time-consuming, depending on the amount of frontend experiences and back-end connections desired.

Who Needs a Headless Platform and When?

Headless commerce systems are ideal for direct-to-consumer businesses and online merchants, as well as those looking to sell across several channels. Additionally, it is well-suited for multinational businesses seeking to provide their consumers with a world-class and seamless user experience. If you want to increase your PCI compliance, headless commerce is also for you.

Traditional eCommerce platforms may still be a viable choice for businesses who are just getting started and seeking for fast wins during the early stages. Traditional systems have built-in front ends, which significantly reduces time-to-market during the launch phase. Additionally, if your company does not need a presence across a large number of channels, the conventional approach will suffice.

What to Look for in Headless Commerce Platforms?

If you want to switch to a headless commerce platform, you must ensure that the platform has the following key features:

The Platform Must Be Scalable & Customizable

As your company grows, the platform must grow with it and offer extra support. However, since each company is unique, ensure that the platform you choose has dependable and quick APIs that enable you to automate and personalize your shop. Ascertain if the platform has a sufficient number of one-click applications or built-in connectors that not only connect, but also update in real-time to enable smooth scaling without the need to hire extra developers.

The Platform Must Give an Omnichannel Experience

To become successful in the ecommerce industry, you must implement an omnichannel approach, since consumers search and shop for goods on a variety of channels, including marketplaces such as Etsy & Amazon, and social media platforms such as Instagram & Facebook.

If you are absent in the places where you clients are present, you are missing out on a growth opportunity. As a result, you must create a presence across many media. Your chosen headless commerce platform should provide centralized channel administration, allowing you to manage goods and pricing across many channels from a single location.

The Platform Must Give Security and It Must be Easy to Use

The whole purpose of transitioning to headless commerce systems is to ensure that you spend less time developing and more time on customer experience. As a result, the platform you select must be simple to set up, use, and utilize as your company grows.

One major advantage of headless commerce systems is the increased security they provide. The decoupled design mitigates the danger of catastrophic failures and strengthens the system’s resistance to cyber-attacks. Ascertain that the back-end systems comply with GDPR, PCI, and any other applicable requirements, such as SCA under PSD2, to guarantee a secure payment flow.

What are the Most Popular Headless Commerce Platforms Today?

Some of the most popular headless commerce platforms that exist today include the following:

Magento Commerce

Magento Commerce provides bespoke apps that enable experimentation and a high degree of customization for your customers. It allows inventory tracking across various sites, including shops and warehouses, and enables global configuration of management parameters by source and product.

Shopify Plus

Shopify Plus focuses on allowing merchants to be agile, and the platform is used by some of the most well-known B2C retailer brands, including Steve Madden, Decathlon, and Bebe. Shopify has a strong network of technology partners, and its API-first design enables many integrations, reducing the time required to launch new services. The platform enables you to interact with customers and provide a consistent experience across many touchpoints, such as vending machines, wearables, and kiosks.

BigCommerce

BigCommerce, a market leader in the SaaS ecommerce sector, provides all of the tools you need to grow your company, including customer segmentation, product listing, payment processing, and even cart recovery. Multiple storefronts may be managed from a single account, and its collaboration with Chargebee enables all of its merchants to start subscriptions and generate more consistent recurring income.

OroCommerce

OroCommerce is geared at wholesalers and the business-to-business ecommerce sector, although it may be modified to accommodate B2C and B2B2C companies. You may manage numerous websites and warehouses. OroCommerce supports traditional as well as headless commerce platforms.

Conclusion

Headless commerce systems also allow managing subscription offering in addition to conventional ecommerce shops, generating extra income. Headless commerce systems enable companies to expand across channels due to their flexibility and ability to operate numerous storefronts. Without a doubt, the future of eCommerce is none other than headless commerce. So, if you are already considering replatforming to accommodate the needs of your growing eCommerce business, headless commerce is a good place to start.

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