Demystifying Headless Commerce

As the eCommerce industry grows, new technologies such as AI and cloud-native systems are being integrated to enhance the customer experience and performance of online commerce experiences.

Considering numerous eCommerce businesses today, customers always prefer the ones that provide enough scope for personalization, have the most engaging communication, and offer an intuitive purchasing experience.

With the growing need for performance, scalability and personalisation, it becomes difficult for online businesses to continually provide customisation for different users, during different seasons, in different locations, and for different age groups. Here’s where headless commerce comes into play.

Everything to Know about Headless Commerce

In simple terms, headless commerce is a type of eCommerce store where the frontend and the backend are separated. The API layer plays a vital part in delivering the frontend experience for your end-users.

The frontend is the visual part of your store, which the end-users and customers see while interacting with your website. The back end is the part that facilitates your store’s functionalities, data storage, data analysis, and more. Since the frontend is called the “head,” disconnecting the front and back end is termed headless commerce. Instead of being connected with the traditional code, the frontend and the back end will interact and communicate with the help of an API.

When ecommerce stores opt for headless commerce, they do so to create a much higher degree of flexibility, performance, scalability and customisation for their platform and its users without having to make too many changes in the backend.

The idea is to create an ecommerce store that connects different channels through which users will interact, without all the overhead and limitations of monolithic systems. These channels needn’t be just your website. They could be social media apps, mobile apps, smart watches, other wearables, and anything used to interact with your business.

This becomes possible with the help of APIs (Application Programming Interfaces). APIs are used as a bridge using which multiple software or platforms exchange data. Thus, with the help of APIs, different kinds of systems will be connected together as and when required.

Below are a few of the elements that can be decoupled in a headless platform:

• Product catalogue
• Inventory
• Shopping cart
• Promotions and discounts
• Payments
• etc

Furthermore, in headless commerce, you can make any change to the frontend or visual part of your store without making any to the back end. This way, no matter what users see before them or how they interact, no additional coding will be required on the backend.

However, this doesn’t mean the frontend and backend are disconnected. Data passed through the frontend will be recorded in the relevant backend components. This way, you can have more personalisation and customization than traditional online stores. You can also promote sales across various channels besides your website.

Benefits of Headless Commerce

• Increased flexibility: The frontend can be developed independently of the backend, which allows for more flexibility in design and customization.
  • Since the frontend and back end are not connected, you can make changes to the frontend quickly without having to code the back end. This means that you will save time and effort because, in traditional systems, developers wouldn’t be able to modify the front and back end simultaneously.
• Improved Performance: the frontend and backend can be scaled independently, which can improve performance and responsiveness. Your tech stack
• Future proof: you're not reliant on dated monolithic architecture so are free to use API-first platforms in your tech stack.
• Less Development (Long Term): initially the setup will take much development, but once your headless platform is built you'll be less reliant on developers in the long term. The frontend and UX can be managed in-house using low-code solutions like FlutterFlow or outsourced to specialised frontend designers.
• Scalability: Since headless commerce is about integrating different systems, tools, and channels together in a seamless manner, you’ll be able to scale and grow your business with relative ease.

These are some of the major benefits of headless commerce. However, like everything else, headless commerce has its drawbacks too.

Challenges and Drawbacks of Headless Commerce

• Migration: Moving from a traditional eCommerce store model to a headless commerce model might be difficult, as it would cost a significant amount of time and money.
• Complexity: Considering multiple systems and sales channels will be connected, it will be difficult to maintain the complete system’s security. This is because the infrastructure might be complex and require a complex cyber security system. Furthermore, malicious attackers will likely have more surface area to launch their attacks.
• Maintenance: Managing headless commerce and streamlining process across various channels will become difficult.
• Potentially Disjointed: If the model is not deployed correctly, users might have a fragmented and disjointed experience as they hop across different platforms while interacting with the brand.
• Testing and experimenting: companies will need the right tests, the right metrics, and the right ways to measure any facet of the store.
• Training: all teams would need to go through extensive training programs and workshops, which would teach them to shift from the traditional approach toward the headless approach. The workshop would cost time, energy, and money.
• Cost: a headless model can be costly. It's estimated that headless could cost 3x - 5x more then conventional ecommerce platforms.

Examples of Expert Headless Commerce Platforms

While some companies and eCommerce stores are considering whether to opt for the headless approach, there are others that have adopted and deployed headless commerce successfully. These include:

1. Google
2. Tesla
3. Nike
4. Venus
5. Staples
6. Samsung
7. Mercedes-Benz
8. Walmart
9. Coca-Cola
10. Etsy
11. McDonald’s
12. Disney
13. Redbox
14. Carnival Cruise Line
15. Kirkland’s

The MACH Alliance: Where Does Headless fit in?

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MACH stands for Microservices based, API-first, Cloud-native SaaS, and Headless. The MACH Alliance is a non-profit organization that advocates the usage of API-based modular technologies which can help organizations build better ecosystems.

These ecosystems needn’t be tied to the same vendors or systems but can add or remove any system based on their necessities. This is with the help of APIs, as mentioned earlier. The MACH alliance promotes headless commerce so organizations can build systems that can easily stay relevant even in the long run.

Microservices: Instead of a single, monolithic application, headless commerce utilizes a collection of loosely coupled microservices. Each microservice is an independent, self-contained unit responsible for a specific function, such as product management, order processing, or customer authentication. This modular approach facilitates individual microservice development, deployment, and management without disrupting the overall system.

API-first: Headless commerce embraces an API-centric approach to seamlessly connect the frontend and backend. APIs function as intermediaries, enabling the frontend to retrieve data from backend microservices. This decoupling allows data aggregation at dedicated backend microservices and seamless integration with the corresponding frontend components.

Cloud-native: Headless commerce solutions are inherently cloud-based, eliminating the need for on-premises infrastructure and its associated overhead. Updates and upgrades are automatically executed in the cloud, ensuring continuous deployment and minimizing downtime. Businesses can avoid infrastructure costs, licensing expenses, and the complexities of maintaining servers.

Headless: Headless commerce architecture decouples the frontend presentation layer from the backend logic layer. This separation empowers businesses to customise the frontend without affecting the underlying data and functionality. Personalised customer experiences can be tailored to specific customer segments or channels without altering the core system.

How much does it cost to move to Headless Commerce?

Headless commerce provides a level of customisation that is hard to beat when it comes to an ecommerce storefront or platform. But it comes at a cost. Below is a breakdown and rough estimates of what it might cost and the cost-multiple of going headless over traditional ecommerce.

1. Development Costs:
   • Traditional E-commerce: $5,000 - $50,000
   • Headless Commerce: $20,000 - $100,000
   • Multiple: Roughly 2x - 3x
2. Hosting Costs:
   • Traditional E-commerce: $50 - $500 per month
   • Headless Commerce: $100 - $1,000 per month
   • Multiple: Roughly 2x - 3x
3. Maintenance Costs:
   • Traditional E-commerce: $1,000 - $10,000 per year
   • Headless Commerce: $2,000 - $15,000 per year
   • Multiple: Roughly 2x - 3x
4. Scalability:
   • Traditional E-commerce: $0 (often included)
   • Headless Commerce: Variable, could be $1,000 - $10,000 per scaling event
   • Multiple: N/A (dependent on usage)
5. Integration Costs:
   • Traditional E-commerce: $500 - $5,000
   • Headless Commerce: $2,000 - $20,000
   • Multiple: Roughly 2x - 4x
6. Customization Costs:
   • Traditional E-commerce: $1,000 - $20,000
   • Headless Commerce: $5,000 - $50,000
   • Multiple: Roughly 2x - 3x
7. CMS Costs:
   • Traditional E-commerce: Often included
   • Headless Commerce: $1,000 - $10,000 (for a headless CMS)
   • Multiple: Roughly 2x - 3x
8. Training and Skillset:
   • Traditional E-commerce: Standard development skills
   • Headless Commerce: Additional training may cost $2,000 - $10,000
   • Multiple: N/A (dependent on existing skills)
9. Third-party Services:
   • Traditional E-commerce: $0 - $2,000 (included or through plugins)
   • Headless Commerce: $500 - $5,000
   • Multiple: Roughly 2x - 3x
10. Total Cost of Ownership (TCO):
    • Traditional E-commerce: $10,000 - $100,000 (first year)
    • Headless Commerce: $40,000 - $200,000 (first year)
    • Multiple: Roughly 2x - 3x

How to Determine if Headless Commerce is Suitable for Your Business

While the buzz around headless architecture grows this model keeps gaining in popularity each day, however it isn’t necessary to opt for the headless approach. Certain ecommerce businesses seem to function well without going fully headless.

Below is a checklist to assess your needs, and if headless might be feasible for your business.

Evaluate your current e-commerce platform and needs:

• Assess the limitations of your current e-commerce platform and identify areas where it falls short in meeting your growing business needs.
• Determine the scalability and flexibility of your existing platform to accommodate future growth and evolving customer demands.
• Analyze the ease of customization and personalization capabilities of your current platform to deliver unique and engaging customer experiences.

2. Assess your technical expertise and resources:

• Evaluate your in-house development team's expertise in headless commerce architecture and API integrations.
• Consider the availability of dedicated resources to manage and maintain a headless commerce system.
• If lacking in-house expertise, assess the budget and willingness to invest in external headless commerce consultants or development partners.

3. Define your e-commerce goals and objectives:

• Clearly outline your specific e-commerce goals, such as increasing conversion rates, expanding into new markets, or enhancing customer satisfaction.
• Identify the pain points and challenges you face in achieving your current e-commerce objectives.
• Determine the potential impact of headless commerce on addressing these pain points and achieving your desired goals.

4. Consider your omnichannel strategy:

• Evaluate your plans for delivering a seamless and consistent customer experience across multiple channels, including web, mobile apps, social media, and IoT devices.
• Assess the ability of your current e-commerce platform to support omnichannel commerce capabilities.
• Determine if headless commerce architecture can provide the flexibility and agility needed to execute your omnichannel strategy effectively.

5. Evaluate your budget and investment priorities:

• Consider the initial and ongoing costs of implementing and maintaining a headless commerce solution.
• Compare the costs of headless commerce to potential revenue gains and cost savings from improved e-commerce performance.
• Assess the alignment of headless commerce investment with your overall business strategy and budget priorities.

To simplify this, you must ask yourself whether you should opt for the headless commerce approach. Answer the questions below:

• Will my customers demand higher degrees of personalization and customization from the store?
• Can I build better experiences by connecting different social media channels, technology media such as wearables, or more?
• Is it difficult to modify, tweak, or scale my eCommerce store?
• Is it challenging to integrate the latest technology into my store and leverage its benefits?

If your answer is yes to any two of these questions, it is likely that you will benefit from adopting headless commerce. Alternatively, if your answer is no, then you’re doing just fine with your traditional architecture.

Conclusion

To summarise, headless commerce does offer flexibility, performance, and incredibly personalized experiences to customers if adopted the right way. eCommerce stores can build brand loyalty, increase conversion rates, make their online store content-driven, and integrate any system or tool seamlessly.

However, it isn’t necessary that all companies must move toward headless commerce as the traditional model might work for certain companies.