Since the beginning of the COVID-19 pandemic, we’ve seen that ecommerce has exploded. While retail stores shut down in 2020 due to global and local lockdowns, many traditional retailers found themselves turning to ecommerce and joining online retailers in what would be a massive boon for the industry. In fact, according to the United Nations Conference on Trade and Development (UNCTAD), the online retail sales’ share of total retail sales jumped from 16% to 19% in 2020 – and in some countries, like the United Kingdom, the total share jumped from 15.8% to 23.3%.
Full report from UNCTAD can be found here.
The shift to online shopping is here to stay as customers expect a seamless experience across channels and touchpoints, whether that’s mobile, IoT devices, or Progressive Web Apps (PWA). So ecommerce businesses need to provide customers an integrated and personalized shopping experience. So how can brands keep up with the changing customer expectations? The solution – stay ahead of competition and expectations by incorporating the flexibility and agility of headless commerce.
What is Headless Commerce?
First and foremost, headless commerce is all about flexibility. Going headless means you can have the agility that you’ve always wanted in a platform. It also means that you’ll give the customers the experience they want. But how?
Headless commerce works by decoupling the front-end presentation layer (templates or themes), including the photos, video, and content you see on an ecommerce website or mobile app screen from the back-end infrastructure that enables the ecommerce experience. The decoupled architecture gives brands more flexibility over the customer experience they can offer, help them engage with customers better, and stay ahead of their expectations. Headless commerce allows them to provide a personalized and brand-consistent experience across channels using APIs (application programming interfaces) that connect the front end with back-end systems.
Headless Commerce vs. Traditional eCommerce Platforms
Traditionally, many ecommerce companies have used a single platform to manage both the front-end experience and the back-end systems. These monolithic systems prevented you from changing the frontend without changing the backend. And while this may work temporarily for many organizations that don’t have large development teams, including startups, these traditional platforms soon become very restrictive in more ways than one. They limit creative control and, therefore, the customer experiences while creating time-consuming projects for teams who may need to make a small change. These more conventional systems make it challenging to adopt new technologies to increase customer touchpoints impacting the overall organizational agility and competitiveness.
But in the race to meet customer expectations and beat competitive pressures, you need a scalable platform architecture on which your business is built. That’s where headless commerce comes in. Having a decoupled architecture, your headless CMS (content management systems) like WordPress or digital experience platforms (DXPs) such as BloomReach, is used as front-end presentation layers by creative teams to optimize the user experience and interface customer engagement and conversions.
On the back-end, you’ll have:
- An inventory management system
- A payment gateway
- A billing and subscription platform
- An accounting system managing billing and payments
- Data processing
- The checkout process
- Customer account management
- Product inventory
And this is where the APIs come into play. APIs are used to connect and communicate between the front-end and the back-end systems. They also enable greater customization – giving you greater control over your business and reducing dependency. Headless ecommerce platforms provide APIs and tools, so you build a brand-consistent experience across channels based on a single view of data.
Headless Commerce vs. Traditional eCommerce
Things to Consider When Moving to a Headless Commerce Platform
Transitioning to headless commerce is a big decision, and you need to find a platform that suits your business needs and one that will match your growth. Here are some key features you should consider while deciding if a headless platform is right for you and your organization.
Headless commerce platforms are best suited for direct-to-consumer (D2C) brands, online retailers, and those who want to sell across various channels. It’s also best suited for global brands looking to create a world-class user experience for their customers. If you are looking for more PCI compliance, or don’t fall into the categories mentioned above, then headless commerce is probably not the best solution for your organization.
Traditional all-in-one eCommerce systems can still be a good option when starting up a new business and looking for quick wins in the initial period. Traditional systems come with built-in front-ends reducing the time-to-market during the launch period. Also, if your business doesn’t have to be present across too many channels, the traditional system will work just as well. It all depends on what you’re looking for (and if you aren’t exactly sure, Chargebee can help!).
Determine scalability and customization of the platform
As you scale, the platform you select needs to scale with your business and provide additional support. And while every business has its own unique needs, we suggest you seek out a platform that comes with reliable and fast APIs that help automate and customize your store. Ensure the platform has plenty of one-click apps or built-in integrations that connect and update in real-time to help you scale seamlessly without hiring additional developers.
Ability to provide an omnichannel experience
To be successful in the eCommerce business, you need to have an omnichannel strategy because customers are looking and shopping for products everywhere, whether it’s marketplaces like Amazon or Etsy or social media platforms like Instagram or even TikTok. If you are not present where your customers are, that’s a lost growth opportunity for you. You need to establish your presence across various channels. The headless commerce platform you choose needs to offer centralized channel management, so you manage products and prices across channels from one place.
Ease of use and security
The whole point of moving to headless commerce platforms is to make sure that you don’t spend a lot of time in development and instead focus more on customer experience. The platform you choose needs to be easy to set up, navigate and use as you scale the business.
One of the critical benefits of headless commerce platforms is the enhanced security it offers. The decoupled architecture reduces the risks of critical failures and makes it more resilient to cyber threats. Make sure the back-end systems are compliant with PCI, GDPR, and other regulations as required, like SCA under PSD2 to ensure a secure payment flow.
Dependability and continuous customer support
You don’t want your store to crash when you experience high traffic, so you need to make sure that your headless platform offers a reliable hosting solution. It’s crucial that the platforms offer continuous customer support 24/7 with easy-to-understand user guides and resources that can help you set up everything you need to go to market quickly.
The Benefits of Headless Commerce
If you are looking to scale up your ecommerce business, headless commerce brings with it a world of benefits that will set you on the growth path.
Since the front-end presentation layer is decoupled in the headless commerce approach, you can test your personalization strategies without disrupting your back-end systems—a huge win for all creative and development teams.
Personalization goes a long way in building long-term customer relationships and increasing brand loyalty. Marketers can leverage all the customer data generated across all touchpoints to create relevant promotions and offers that would resonate better with customers and make it a great shopping experience for them.
Reduced time to market
Consumers can be very demanding, and to stay ahead of the competition, brands need to deliver what consumers want when and where they want it.
Headless commerce helps keep with the latest trends and technologies and implement new offerings at much lower costs and time to market than traditional systems can. Development teams spend less time on user interface changes. The decoupled headless commerce architecture makes it easy to integrate any system that can help reach customers faster and increase conversions.
In eCommerce, experimentation in creating different user experiences and pricing can be a game-changer. Superfoods Company that sells natural plant-based products takes about 30 minutes to decide on a pricing level or launch a new product with Chargebee. The ability to experiment saw Superfoods increase its revenue by 4X in less than a year. They expanded their product line from one to five products and their subscriber base to over 200,000.
The use cases of headless commerce are many. They vary, and someone of the ones we’ve seen includes:
- Rolling out new offerings or features
- Testing various promotions and discounts
- Playing around with different page layouts
- Creating more engaging user experiences
All without making changes in the back-end systems and looping in the development team.
Unified customer experience across channels
Headless commerce lets you introduce new customer points powered by the same set of APIs to ensure consistency of data and functionalities. Today, consumers use several different channels to search for and buy products, and these touchpoints are an extension of your brand.
Headless commerce platforms ensure a unified presence across the channels without re-architecting your entire platform and that you can facilitate transactions without customers having to visit your web store. For instance, you can convert your Instagram account into a mobile storefront by adding the “Shop Now’ functionality to your posts.
The Challenges of Headless Commerce
While headless commerce systems have some undeniable benefits, the transition is not that easy and it’s not for everyone. If you are considering the move to a headless platform, here are some concerns you should be aware of:
Higher ownership costs
Most headless platforms don’t come with a front-end, meaning you’ll have to consider the cost of investing in one. Also, given that it is a pay-per-use architecture, the total cost of ownership goes up with the number of integrations.
Flexibility comes with complexity
Smaller teams may find it challenging to manage a distributed system rather than a single solution. You will have to deal with multiple vendors and have various teams focus on the different blocks, making it easier for larger teams to handle.
Replatforming is not that easy
While there are definite long-term benefits that come with transitioning to a headless platform, eCommerce replatforming can be challenging and time-consuming, depending on the number of front-end experiences and back-integrations you are going after. Careful consideration must be given to your timelines at a team and company level.
Why Headless Commerce and Subscriptions are a Great Fit
Subscription-based businesses have experienced significant growth over the past decade and are likely to continue their dream run. The global subscription eCommerce market is expected to touch US$ 478.2 billion by 2025 from US$ 13.2 billion in 2018, clocking an impressive CAGR of 68.0% between 2019-2025.
Consumers love subscriptions because it removes the decision-making process and makes the buying process convenient and automatic. For businesses, subscriptions are a great way to bring in more predictable recurring revenue and build long-term relationships with customers, thereby increasing their lifetime value (LTV). Subscriptions also offer businesses a wealth of customer data that they can leverage to anticipate their future needs.
Traditional, monolithic eCommerce platforms usually don’t have the functionalities to support subscriptions and are integrated through third-party plug-ins. These plug-ins offer limited integration across functions and, therefore, can’t scale seamlessly when your subscription sales increase and your organization starts to grow. Because of this, monolithic architectures fail to give subscription eCommerce businesses what they need: fewer limitations and more flexibility.
With headless eCommerce, you can integrate subscription sales directly into the platform architecture. Subscription sales need payment gateways and the billing and management system to work well with the eCommerce platform to ensure seamless integrations across all business functions. For instance, BigCommerce’s integration with Chargebee will let you offer subscriptions and give you access to a full suite of features, including dunning, payment gateway options, abandoned cart reports, gift subscriptions, and many more.
Headless commerce platforms also enable you to manage your subscription offering alongside the traditional eCommerce stores, bringing an additional revenue stream.
All it takes is a simple API integration and Chargebee can provide you everything you need in a headless ecommerce solution. Getting the flexibility you need from a decoupled solution as opposed to a monolithic architecture can help your organization take your subscriptions to the next level. You can leverage this headless structure with Chargebee to scale your eCommerce subscription offerings.
Chargebee partners with all the leading headless commerce platforms, and you can leverage these partnerships to scale your ecommerce subscription offering. Thanks to the flexibility it offers and the ability to run multiple storefronts, headless commerce platforms will help businesses scale across channels. There is no doubt that headless commerce is the future of eCommerce. Are you ready to deliver a world-class customer experience with headless eCommerce?