The Business Case For Headless Commerce
Over the past decade, e-commerce has grown from ~4% of US retail spending to ~15%. This growth has only sped up after the advent of COVID-19, by all accounts the trendline of online sales commerce is steepening. In the not too distant future, the majority of consumer spending will take place online.
The technical world of e-commerce is shifting away from monolithic systems and traditional ecommerce platforms, and into a new era of decoupled e-commerce. This new method for creating and deploying e-commerce is called headless commerce.
For the most part, the headless solution environment for e-commerce is a developer-led initiative with technical teams looking to make it easier to solve issues and deliver better results for commerce online. However, there are a lot of reasons for the marketing and content management department and C-suite to get involved in the headless commerce revolution.
What Is Headless Commerce?
Before we dive into all the benefits of Headless Commerce and how it differs from online traditional commerce platforms, it will be helpful to have a clearer understanding of the technicalities of what we are talking about. You can also get a quick overview of headless commerce here or feel free to take a deeper dive with our E-Book on Headless Commerce.
Currently, most of the ecommerce platform options available to businesses are monolithic (also considered traditional commerce). This means the entire system is held on a single platform. The product information catalog, design templates, database, shopping cart, and checkout process are all stuck together and a lot of your business choices have pre-ordained for you. This can be beneficial for a young webshop but, eventually, many online traditional commerce stores find themselves constrained everywhere they turn.
So what is headless commerce exactly?
Headless commerce decouples the presentation layer — in most cases, the template or theme — from the eCommerce platform. Another way to think of the headless approach is that all the components are modular. Meaning you gain a lot of choice and flexibility and access to the power that brings to develop better customer experiences. The benefits of headless commerce architecture make for a strong business case to adopt a headless solution.
Better User Experience
The first family of benefits when it comes to utilizing headless commerce platforms and de-coupling from the presentation layer is all about your customers’ online experience. This is paramount in e-commerce as it is directly tied to the revenue performance of the website. Plus, the headless approach is a great way to future-proof your web applications. Outlined below is a list of how headless e commerce provides a multitude of benefits to your online users’ experience.
- Faster page load speeds — online consumers are an impatient bunch. If a page does not load quickly, it is all too easy for them to do another search and find a competitor’s store. So, it is important that your webshop’s page loading speed is immediate. Ecommerce platforms that provide a headless approach help in this matter because front-end and back-end website functions are not coupled together. Content on your site can then be served or displayed to your customers very quickly.
- Up-to-date content — One of the tricky things to handle when running an online shop is content management. If you are using a traditional commerce platform, most likely you’ll have to do numerous adjustments to the front-end (template design/the way your content is displayed) of your site when you make changes to the back-end (data, written content, amounts, and so on). Because it can be tedious, there might be a delay in updating your webshop’s content. But with a headless solution, changing the back-end and the front-end can be done separately. It then becomes easier to keep your website up to date.
- Clean and uncomplicated design — An online shop’s design can adversely affect user experience. That is why it is a best practice to maintain an uncomplicated design that will encourage customers to purchase or complete transactions. A headless commerce solution can definitely help developers achieve this type of design in a more seamless manner. Traditional commerce architecture, meanwhile, often involves complicated presentation layer approaches that will take away from the effectiveness of a site’s design.
As a whole, it is imperative for commerce websites to display accurate and enticing product information and photos, make the navigation easy to use, and make the whole website responsive whether accessed via mobile or desktop. Headless commerce provides many benefits in these areas and will help an online shop raise their user experience ratings to the next level.
Increased Performance and Improved Conversions
A headless ecommerce platform offers a major increase in the performance of your ecommerce website. Performance simply put is all about page speed.
As mentioned above, Page Speed is especially important for an eCommerce website. This is for a multitude of reasons but the basics are that fast websites get better conversions, lower bounce rates, and better SEO rankings.
The truth is folks tend to stick around when a page loads quickly. Faster page load leads to an increase in engagement and a reduced bounce rate. People are more likely to visit multiple pages on a single website and spend more time on a page actively shopping and consuming content.
Faster page speeds also lead to higher conversion rates which are directly tied to an increase in revenue. Now, this is true on both monolithic and headless commerce websites, but pages with a headless architecture are faster than their monolithic counterparts, and creating that page speed is much easier.
It’s not easy to build a fast site with a CMS like Shopify/WordPress/Drupal or SPAs built with Angular/Ember. With a few too many scripts, large images, DOM re-painting, or plugins, it’s easy to bog a site down. Making a monolithic commerce platform fast takes dedication and a lot of time and experience. And once a site is optimized, you have to weigh changing the website versus the work it will take to reoptimize it.
However, with headless commerce architecture, it is a lot easier to build blazing fast online shopping websites. With a headless commerce solution, the webpage is pre-rendered at build time, hence there is no compilation and virtually no wait time for the user. It also reduces the number of requests for extra dependencies as they are combined into a single bundle. In addition, serving the commerce website via CDN always brings the benefit of speed and minimizing the time to the first byte.
This new found speed can mean a lot to the revenue your shop earns. In a recent Deloitte study Milliseconds Make Millions, it is reported that improving a website page load speed by 0.1 seconds yields major results especially for websites that are already well optimized for speed.
“With a 0.1s improvement in site speed, we observed that retail consumers spent almost 10% more, while lead generation and luxury consumers engaged more, with page views increasing by 7% and 8% respectively.”
The study goes on to report that increased page speed positively affects all kinds of important key performance indicators on ecommerce websites.
- Reduced Bounce Rate
- Increased Page Views Per Session
- Improved Funnel Progression
- Increased Conversion Rate and Increased Order Value
In the end, every website needs to be as fast as possible. Using a headless commerce architecture makes it much easier to be fast online.
The next benefit is access to truly personalize your user’s individual experience on your website. By utilizing a headless commerce solution, you have more room to get creative with your site’s content and the experiences you want to create. Implement a quiz that provides personalized recommendations or build a product page that allows users to customize their product down to its material.
The importance of personalization in eCommerce marketing isn’t anything new, but some companies are taking it a step further by creating products based on each customer’s personal preferences.
Brands like Curology, Care/of, and Prose use online quizzes to curate one-of-a-kind results for each customer.
This hyper-personalization means that each individual is getting a product that’s made specifically for them. This is especially attractive when it comes to health, beauty, and wellness, where factors like environment and stress can affect what products best fit your lifestyle.
However, you can easily take this beyond product and include headers, images, and articles all personalized to your user. Companies that find ways to personalize the customer experience through interactive content will actively impact repeat purchases and customer loyalty in the coming years.
The brands that have already embraced this idea of hyper-personalization have also piqued consumers’ interest as they search for more individualized shopping experiences. As more companies experiment with this concept of hyper-personalization, these experiences will be a significant differentiator for the brands who are among the first to adopt and implement the technology successfully.
On top of that, by taking a good look at consumers’ customization preferences, your business will be able to come up with better product implementation and marketing strategies.
A headless commerce architecture gives you the tools and capability to drive personalization as you see fit. You will not be limited by the capabilities of your monolithic commerce platform and as new options and techniques become available, you can quickly implement them on your website.
Reduce CAC With A Seamless Customer Experience
To piggyback on personalization, with a headless commerce platform, you can easily integrate your commerce where you need it. This, once again, makes for a seamless customer experience. Your store is no-longer stuck to just your specific URL. You can take your shopping experience directly to the customer wherever they are.
Customer Acquisition Costs (CAC) are on the rise even though online sales are growing year over year. Roughly 84% of B2C businesses report their acquisition costs are increasing year over year — source. This increase in cost is due in large part to an increase in competition and a decrease in access to customers and their attention.
Headless commerce makes it easier to generate personalized content experiences that really resonate and retain a user’s attention while also making it much easier to provide a seamless and smooth transaction process. Most monolithic ecommerce systems were designed for commerce and not a complete and diversified customer experience especially when content marketing is concerned.
These older monolithic systems are hard to adapt to modern customer experience requirements. When everything is templated and tied to product management and commerce, your brand loses the ability to create unique and seamless customer experiences. Instead of forcing your customers down inflexible and stagnant processes and experiences, as well as rigid content templates and customer journeys, your brand can gain the freedom to customize and experiment.
Coupling this freedom with better content and a personalized experience opens up a lot of doors to engage your visitors and lower your customer acquisition costs.
Become Customer-First Focused
Traditional monolithic ecommerce systems aren’t really built for modern customer expectations. They are designed to be uniform and internally integrated which is great if your shop is not yet mature. But these restrictions are tough to scale up. Basically, the traditional methods of yesteryear put site structure and templated design before your customers’ wants and needs.
This is severely limiting when you look to create unique and personalized experiences that put the customer first. Customers are demanding more than the price nowadays. They crave experience and connection with their brands and headless commerce gives you complete control over your design and customer journey in order to provide that.
Not all the benefits of a headless commerce platform relate to the user experience. There are loads of benefits for the back end of your shop too!
Better Operational Capacity
If you boil e-commerce business down to sales and delivery, then headless commerce really helps you deliver!
Improved Scalability and Stability
One of the key tenets of headless commerce is that the architecture is less reliant on dedicated servers to deliver the website. This means that scaling the website to high traffic while maintaining speed, stability, and user experience is much easier and way more cost-effective. A headless commerce website is just easier to maintain at scale.
Older monolithic websites require all kinds of DevOps and troubleshooting to deliver scalability and speed while also being reliable and stable. But not modern headless ecommerce. Because the website is pre-built and served on a global CDN as a static file, your site can receive a lot of traffic without the fear of poor page load speed or website instability.
Access To True Flexibility
We’ve discussed how easier it is to customize and deliver customer-first experiences but this requires constant iteration and experimentation. Headless commerce is decoupled from the presentation layer and backend database, meaning cycling through these technical iterations is much easier. The building, testing, and deploying of better customer experiences is easier and less expensive.
This flexibility extends to your back-end systems as well. You aren’t tied to certain software or integrations that are prebuilt into monolithic systems. You can decide how and where you extend your shop data in order to create a great shopping experience after the sale as well.
In fact, the entire concept of headless ecommerce is able to evolve and move with your business. By decoupling and decentralizing your website, you are able to bring in new technologies much easier than if constrained to a monolithic platform. You can bring in new and innovative payment systems, offer new experiences like AR/VR, and incorporate IoT commerce options.
Slow go-to-market timelines, high development costs, delays in innovation — traditional eCommerce models simply can’t keep up with the agility and customization of headless commerce. This is why more brands are moving to a headless commerce model.
The business case for choosing headless commerce is becoming more compelling with each new quarter. We are in a new era of eCommerce development. ECommerce developers, agencies, startups, and product teams are using new technologies like the JAMstack, CDNs, PWAs, dev tools like Gatsby, CMSes like Sanity, and several other leading-edge tools to make eCommerce sites easier to use, more fun to build, and better converting.
The companies who are willing to experiment and innovate with these new technologies stand to increase their conversion rates, delight their customers, beat their competition, and ultimately grow their revenues.