Consumer expectations and behaviours are changing more rapidly than enterprise technology, forcing retailers to rethink how they design and architect their technology stacks to differentiate their offerings and avoid racking up technical debt.
One approach to this conundrum, which is gaining more airtime in conferences and discussions between vendors, consultants, and their clients, is headless commerce.
Headless commerce is an approach to technology architecture that decouples user interface applications from the commerce engine. It provides a path, via APIs, to integrate an unlimited variety of web, social, mobile, IoT and in-store digital touchpoints with a back-end commerce platform.
The main advantage of separating customer touch points from operational systems is greater flexibility, speed, and agility when creating customer experiences. This allows retailers to innovate more quickly without large monolithic deployments or the constraints of complex enterprise systems.
This approach allows brands to build rich differentiated experiences across a range of touch points and makes it easy to extend beyond the storefront. For example, retailers could quickly enable sales through Instagram once the social platform opened up checkout functionality or add payment functionality to an app that’s used to track your exercise.
But there’s a trade-off. Headless commerce requires much greater technical capability than a traditional turnkey commerce solution.
According to Gartner, the decoupled approach increases the effort required to deliver functionality because teams must create and support integrations between separately deployed UI applications and systems. It also requires managing multiple application stacks.
“This is not an insurmountable task, but it is not trivial, especially when compared to an organisation that has grown accustomed to the simplicity of a monolithic, all-in-one commerce platform or SaaS solution,” the Gartner analysts write.
Jeff Skowron, senior research director at Gartner, says the move towards headless is being driven by the desire for more flexibility and application agility.
“Traditional commerce applications require you to deploy the entire application each time you make a change or want to make a change. Headless breaks this down into two independently implementable, deployable, customisable ‘areas’: the UI (where a lot of commerce-related changes happen) and the business logic (e.g. APIs that you integrate for ‘add to cart’ etc).”
Skowron said headless lets retailers choose a separate customer experience, user experience or user interface app from the one included with the commerce platform.
“Basically, organisations did not want to be bound by the capabilities the commerce applications provided, especially when they inhibited them from making the CX/UX/UI applications they wanted to make for their customers or that their customers demand.”
Andy Burton, CEO of international digital commerce consultancy Tryzens, says the approach can be used to overcome the constraints of enterprise software packages.
“In a traditional software model the way in which you provide an experience to a customer is constrained. The back-end constrains the front-end,” he told Which-50.
“Having a headless model actually is quite handy, because you can then start thinking about what is it I can afford to be constrained by and what is it I need to keep in place, as a strategy to maintain a bridge between transitioning from a legacy architecture to future architecture.”
Jordan Sim, director of product management at BigCommerce says separating the ecommerce website from the back-end enables merchants to prioritise content, commerce and user experience, without needing to make compromises.
“Previously, brands had to choose between a website that focused on content and experience but faced extreme limitations, or one equipped with robust commerce capabilities that lacked any true expression of who they were as a business. This meant they were forced to prioritise one area of their online store, hoping that the particular platform had the capabilities to accommodate the other two areas,” Sim said.
“By going headless, they no longer need to compromise between which component to invest in, and can finally feel empowered to customise their store any way they want. Brands can focus on creating a world-class experience for their customers as well as simultaneously cover priorities like security, inventory management, order fulfillment and points of sale from the back engine.”
Scott Rigby, head of transformation at Adobe said the approach allows businesses to choose a best of breed content management solution and while remaining with their existing commerce solution (or vice versa).
“We are starting to see commerce technology decouple itself from content management solutions, with APIs that pull through information in real time around pricing, product information, shipping information across a number of different channels,” he said.
“It provides a large degree of flexibility and customisation that you might not necessarily get from some of the older commerce technology.”
Rigby used the example of Magento, the open source commerce platform Adobe acquired for US$1.7 billion last year, to illustrate the headless commerce concept.
Rigby noted while Magento can deliver a website or mobile application, its core capability is the commerce piece which is able to manage the millions of SKUs, offer dynamic pricing and enable distribution channels like click & collect. Whereas a content management solution like Adobe experience manager is more focused on experience delivery.
Magento has open APIs that can be integrated into multiple different content management solutions and last week Adobe’s commerce cloud launched a new headless commerce offering, two sets of APIs out of the box: REST and GraphQL.
Jason Woosley, VP of commerce product and platform explained, “A successful headless commerce strategy requires a rich array of capabilities that are open, extensible and easily consumable by developers that have little or no experience with the underlying commerce platform. These capabilities include flexible APIs, extensible microservices, new omnichannel integrations, and comprehensive management tools.”
Is there a business case for headless?
As well as in-house tech skills to manage the APIs, Nathan Bush, founder of digital strategy and activation agency 12High, says headless commerce requires increased governance.
“One of the big benefits [of headless] is they can bring in or out microservices without having to do huge re-platforms all the time,” Bush told Which-50.
“You need to have good governance around this because as you start building these microservices into that back-end you need to understand you could easily get shiny object syndrome. So there has got to be a bit of rigmarole around who can make those decisions.”
To embrace headless commerce Bush argued retailers need to have a good business case that examines the future needs of their customers and how they are likely to shop.
“You’ve got to be able to demonstrate that you’re doing this because your customers are wanting one experience across multiple channels,” Bush said.
For example, if you have a traditional shopper who is only ever going to shop with you via the website then life would be a hell of a lot easier with a more traditional ecommerce infrastructure Bush said. But if the future of shopping is embedded with Alexa, Google or Instagram then there is a good case for headless commerce.
James Johnson, director industry strategy, retail & consumer goods at Salesforce also noted not all ecommerce players will need the “extreme” level of customisation or flexibility which is afforded by the headless.
“If there is a new social tool or a new consumer expectation in terms of selling from a product page perspective, being able to respond and adapt to that really, really rapidly and very iteratively is a potential benefit or upside of a headless approach,” Johnson told Which-50.
He argued retailers and brands should be flexible in terms of social commerce, embracing new points of distribution, “But that flexibility doesn’t mean that you do need to have a headless solution and the overhead that goes with it.”
Johnson said retailers can still have a differentiated experience and be agile with a headed solution.
From a product perspective, Salesforce supports both headless commerce use cases with its open commerce APIs and Heroku platform, as well as low code alternatives to operate online stores.
Experts Which-50 spoke to noted the headless is currently being adopted by larger organisations which are already digitally mature and have a strong preference for a specific functionality or design.
“The retailers that are further along the headless journey are inherently more mature and have more technical capabilities in the organisation,” Johnson said.
In the short term, the uptake of headless will be at the more mature end of the ecommerce strategy scale.
“I think it’s really important that retailers take a realistic view about their capabilities, about their ability to manage release cycles, the coordination of technology teams and that technical resource overhead.”
Andy Burton, CEO of Tryzens, believes the market is in the early stages of embracing headless commerce, and it is predominantly being implemented at the leading edge rather than a mainstream practice.
And while Burton says it is not yet affecting buying cycles, headless is causing CIOs to pause and consider what kinds of investments they are making.
“It is definitely influencing software developers’ strategy and it’s definitely impacting the way in which CIOs, CTOs, and digital leaders are thinking about how they can leverage this capability to achieve more benefit for their internal or external customer more quickly and more flexibly.”
“It’s definitely a school of thought which I would say is probably two to three years away from the mainstream in terms of the majority of people going down that path, but it’s definitely influencing behaviours about what people will do next.”
Burton drew a parallel between headless commerce and cloud computing.
“Headless commerce, or headless architectures, generally are a new way of thinking, designing and building solutions to give greater flexibility and agility in much the same way cloud computing replaced physical machines being hosted on-premise,” he told Which-50.
Currently business can’t go out and buy a headless solution. Burton argues the current complexity, preventing mainstream adoption, is driven by ways of working, available software packaging, and licensing.
“Those are the kinds of things that we will see improve much in the same way that we saw cloud computing revolutionised the way hardware was procured, or the services provided by hardware providers were procured. CPU, compute and networking are now fundamentally different.”
This moment is impacting vendors’ strategy around how they deliver their software to make the elements of it more flexible to consume, Burton said.
“Software vendors are looking at how they re-architect what is typically an enterprise platform into something you can consume as services in the headless model,” Burton said.
“The issue is when does it get to a point of maturity that it becomes accessible at a price point and a control point for the smaller organisation — as is often the way with any technology change.”
According to Gartner’s Skowron, headless is an architecture that retailers pick up incrementally, rather than making a wholesale shift.
“If you are using an all-in-one commerce app, you don’t have to throw away the sites that you are managing out of that application. At this point most all commerce vendors in the market offer API integration layers that enable a headless architecture,” he said.
“The shift is more incremental and can be done without disrupting existing sites, assuming your commerce app has the necessary functional API/integration capabilities.”
Gartner recommends using a headless commerce approach to implement rich-experience UIs that your commerce platform cannot support, or to add commerce functionality to an existing non-transactional web or custom-built mobile application.
The analysts also warn: “Avoid adopting an API-based approach unless you have or are willing to invest in a commerce platform that provides APIs, the skill set to use APIs, and a clear set of requirements that are satisfied by headless commerce.”
Shaun Broughton, Head of APAC, Shopify Plus, says the commerce business has offered headless capabilities for many years, such as custom storefront tools and APIs, and the demand is steadily growing.
“When brands opt for headless models, content can be developed and go to market faster, with more control over their business systems. This also allows a company to build a solution that can grow and adapt alongside their business, as well as build experiences that are differentiated depending on buyer segmentation,” he said.
Broughton highlighted Australian ecommerce business Koala is doing this incredibly well.
“The disruptive mattress brand uses Shopify in a headless architecture alongside their bespoke inventory management, marketing tools, and a third-party content management system to craft a highly engaging, tailored experience that aligns with how they think about building and maintaining their operations,” he said.
“For retailers to shift to a headless approach, they need an API that’s been architected for fast and future growth and the ability to customize the shopping experience.”