Headless commerce is the new standard for growth-enabling shop systems. Learn what's so special about it and how it compares to traditional systems.
In recent years, headless commerce has become a trend that is hard to ignore, especially for enterprise companies. Anyone who wants to grow quickly in e-commerce and react flexibly to new trends will face greater challenges with traditional shop software. But why? What makes headless e-commerce so successful? Because it has clear advantages, e.g., in terms of flexibility, performance, customer focus, and personalization. Omnichannel strategies in particular benefit from headless commerce with a shopping experience that goes far beyond the standard.
Comparing Headless and Traditional Systems
A traditional shop system consists of complex architecture with numerous dependencies between individual components. This does not only refer to the back end and front end. CMS, checkout, or customer management are also very tightly coupled so that updates are often time-consuming and do not always run smoothly. Especially, if you extended your system with your own add-ons, you may encounter some problems when switching to a new system version. For many shop managers, these kinds of updates are a real pain point. Additional effort and costs are also a nuisance.
Considering that the front end, in particular, has a comparatively short half-life, it is a bit concerning how little flexible conventional shop systems are. If the front end does not meet modern standards, it quickly looks old-fashioned and unprofessional to customers. The same applies if the shop only works on the desktop. If customers can't reach the shop on the devices they use every day that always leads to lost sales and customer frustration. However, "quickly plugging in" a mobile app doesn't necessarily work with traditional shop systems. Add-ons or in-house developments often have a high error potential when a new version of the core software is required.
A headless system doesn't have to deal with such problems, because the back end and front end are decoupled anyway. Additional modules can be flexibly connected through an interface. This means, for example, that the front end can be relaunched without affecting the back end. The data is centrally available per API – for the shop front end, an app, or other channels.
The headless commerce underlying technology clearly stands out: According to a survey of more than 120 e-commerce decision-makers conducted by the cloud plattform Yottaa, 61 percent were either already using a headless system in 2020 or were at least planning to do so. 62 percent believed that such a system could significantly improve conversion rates.
Now let's take a closer look at the benefits of headless e-commerce.
1. Stay Flexible at All Times
In a fast-moving world, flexibility is a basic requirement for long-term success. Trends and user habits change, channels are added or dropped. If online retailers are always at the forefront of these developments and shape them, they can be successful in the long term. But this only works with the greatest possible adaptability and speed. There is no room for months of planning and slow implementation, which always have to go through countless departments first. Headless commerce provides the foundation for rapid developments because they can be initiated with agile processes.
2. Introduce Innovations Faster
The acquired flexibility ensures a higher speed of innovation and thus a competitive advantage over slower competitors. According to a McKinsey Quarterly Report, online retail in 2020 experienced growth in just three months as a result of the Corona pandemic, which would otherwise have taken ten years. This has created even greater competition with even faster developments. But only those who run ahead can become market leaders in their field. With headless e-commerce, new approaches can be tested and quickly expanded or discarded. Updates do not always have to affect the entire system, but can, for example, only affect a module or a part of the front end.
3. Implementing a Holistic Omnichannel Strategy
Customers no longer want to buy products only in a brick-and-mortar shop or from a traditional online shop. Instead, they use very different touchpoints such as marketplaces, apps, social media, smartwatches, or voice assistants. A headless system is perfect for these new points of sale (POS): The data in the background is the same, but the presentation is different depending on the channel. Offline and online can also be linked more seamlessly. Order from any place. Ship from any location. Return it from any location. Customers gain maximum flexibility because apps, online and offline shops can integrate complex processes much easier. With an omnichannel approach, customers can be targeted at different stages of the decision-making process. They experience a consistent and cross-channel customer experience that is always aligned with the channel. And it pays off: According to a study by the Harvard Business Review, customers who have been approached through multiple channels spend an average of ten percent more online than shoppers addressed through just one channel.
4. Targeting Customers
The more extensive a company's product range, the more diverse is its target group. With a traditional shop system, it can be difficult to find the perfect fit for all of them. With a headless commerce system, you can not only implement different page templates more quickly. Depending on the target group and country, entire shops can go live with just a few adjustments. Individual product ranges or brands can be further developed with their own marketing strategy. The database is the same. In terms of language and design, there are no limits to your ideas.
5. Compelling Personalization
Customization even goes one step further when the experience is not only tailored to a specific target group but a specific person. In a headless system, additional tools for personalization can be easily and independently of the back end integrated, e.g., recommendation engines. This enables product recommendations that are precisely tailored to the user's needs. This way, not only category pages generate more sales. Dedicated pages in the customer area can also be enhanced with personal preferences and enable curated shopping.
6. Optimize Conversion Rates
Conversion rate optimization is an ongoing topic in e-commerce. If brands cannot only quickly test different kinds of contents but also functionalities with A/B testings, it makes conversion optimization much easier. Headless e-commerce is exactly the right approach for this. The ability to customize the front end completely independently of the back end accelerates the learning curve. A good and highly personalized customer experience generally ensures higher conversion rates. Fast loading times are also an important factor because users leave the website in frustration if the site is too slow. A headless commerce system enables more accurate personalization and improves loading time through its lean architecture.
7. Enter New Markets Fast
If you want to scale quickly and expand into new markets, a headless system is the best way to do so. The back end can continue to manage all data centrally and globally. Country shops can access information as required and adapt it exactly to the respective market. Even if additional channels are added or extensions implemented for the new market, the effort required is significantly less than with a traditional shop system.
Conclusion: Who Should Switch?
Headless e-commerce offers many advantages. At the same time, it needs more attention for some parts than a traditional shop system. The front end, for example, has to be designed by yourself or developed by an external partner. This is hardly worthwhile if you run a small shop with few products. In this case, a shop system with ready-made templates is probably the better choice
A headless commerce system, on the other hand, is advisable for:
- quickly growing companies that want to accelerate their growth
- large shops with many products
- brands with an omnichannel strategy
- industries with frequently changing trends that require adjustments
- companies with different target groups
- shops that want to focus on personalization
- internationalization on a big scale
If some or all of these points apply to your business, developing a headless commerce landscape might be a good option for you.