As competition intensifies in the online retail sector, and internet sales are expected to account for 53% of total retail sales in 10 years’ time, it has never been more important for retailers to develop effective online platforms.
Continually reviewing their eCommerce platforms through the use of customer data and analytics and using these findings to inform new customer engagement initiatives should be at the top of every retailer’s agenda, to help them stand out from the crowd in an increasingly competitive market.
But the fact is, as we move into an experience economy where the customer journey is paramount, enterprise technology by historical design can struggle to keep up with changing consumer behaviours and expectations. Consumerisation is driving rapid innovation and customers increasingly expect instant service, questions answered immediately and the latest capabilities to aid online purchases.
For example, Instagram shopping capabilities, rich content product detail, or real time awareness of stock locations, all from the comfort of their own home or when they’re on the go, are now a must. If customers cannot get these capabilities from a particular retailer, consumers will simply look elsewhere.
The challenge for retailers is that most online operations are well established, but they often have high levels of inter-dependency on back-end systems such as ERP, stock/inventory, PIM, POS, which can also constrain their agility to act.
Ultimately, retail success is all about understanding customer needs and requirements and adapting capability to keep pace with these changing expectations over time. It is time for retailers to reconsider how they design and implement their eCommerce platforms so that they can innovate and stay ahead of the competition. This is one of the most significant drivers around why the concept of ‘headless commerce’ is beginning to draw the attentions of retail CIOs and CTOs.
When a retailer with a traditional eCommerce application wants to make a change to their website, like adding an additional feature, typically their infrastructure requires them to redeploy the entire application each time, or redefine how other systems work with the commerce platform.
This means that many retailers are either left bound by the capabilities of their eCommerce and/or or their back-end applications or they have to carry out large monolithic deployments, which can be incredibly time consuming and costly, and still falls short of market expectations.
‘Headless commerce’ on the other hand breaks a retailer’s digital commerce capability down into two separate areas: it decouples the eCommerce engine in the back-end from the user interface applications in the front-end (or Head). The back-end processes are responsible for the processing and fulfilment of orders, while the front-end is how customers interact with the retailer’s website.
Through application programming interfaces (APIs), headless commerce provides a path for retailers to integrate a wide variety of social, visual and in-store digital touchpoints from the customer-facing front-end to a back-end eCommerce platform, which can be easily updated and changed at any point.
This approach to architecting eCommerce operations enables retailers to respond more quickly to changing consumer trends and behaviours, as it allows them to deploy new elements of technology on their website to improve the customer experience and keep it fresh and exciting, with greater flexibility and mitigating some of the legacy constraints.
Retailers that adopt a headless approach theoretically are able to innovate faster than their competitors that use traditional eCommerce applications, who may be constrained by rigid deployments or their complex enterprise systems.
For example, retailers can really benefit from a headless commerce approach if a shopping capability is introduced on a social media platform. A retailer that has adopted this approach would be able to adapt to this new feature rapidly by integrating it with its website, through an API, moving faster than the majority of their competitors and with minimal disruption to their back-end systems.
There is, however, a trade-off with the headless commerce approach, as it by nature requires greater technical understanding and capability to deliver than a conventional eCommerce solution.
This decoupled approach, which separates the back-end from the front-end, can be a time-consuming task as it requires IT teams to create individual front-end frameworks (such as customer accounts, loyalty points, etc.), which then need to be supported between user interface applications and systems that are integrated separately.
A number of mid-market retailers are already realising the benefits of headless architecture for their content management systems (CMS). eCommerce platforms are frequently integrated with an external CMS that delivers responsive content created independent of the platform architecture.
This hybrid approach, pairing a headless CMS with a cloud-based eCommerce platform, allows businesses to innovate faster in areas where they need flexibility to enhance the customer experience, all without the constraints and maintenance of a full transition to headless architecture.
Given the early stage of Headless Commerce and the lack of resources and expertise required to deliver this approach, it is those retailers with R&D capability that should consider investigating it.
There is no one-size-fits-all approach for retailers when it comes to selecting the right eCommerce solution. Keeping up to date with changing consumer expectations is a top priority for most, so adopting a headless commerce approach will likely become an increasingly attractive option over time as the approach gains more market traction and public proof points.
At present, the market is in the early stages of embracing this approach, and it is currently being implemented at the leading edge rather than as mainstream practice. Nonetheless, while it is not yet affecting buying cycles of retailers, we are beginning to see CIOs consider the headless commerce approach when considering their next investments.
However, as consumer buying habits continue to shift, I believe that in two to three years’ time we will see headless commerce move from being a niche approach to a mainstream practice adopted by many retailers who are looking to be more efficient, nimble and stand out in the increasingly competitive economic climate.
Equally we will likely see many of the mainstream Enterprise eCommerce software vendors also evolve the options in the packaging and pricing of their solutions to help facilitate adoption within a headless architecture.