Headless Commerce vs Traditional Commerce
The global e-commerce market is estimated to reach $6.3 trillion in 2024 and is growing at an unprecedented rate even while navigating pandemic-related disruptions.
Retailers are overwhelmed by the challenges of this sudden acceleration and are looking for ways to capitalize on the opportunities presented by this adversity. Today’s customers are on multiple devices, at multiple touch points, and want a seamless, personalized and effortless shopping experience every time. Therefore, to survive, retailers have no choice but to accelerate digital business adoption and explore every possible direct digital avenue to meet customers wherever they are.
Rapid digitization is putting headless commerce in the spotlight, especially as web stores transform into a variety of digital fronts such as social media apps, Internet of Things (IoT) apps, wearables and other smart products, and artificial intelligence (AI). -supported conversational commerce and more. This is mainly because, unlike traditional e-commerce systems where the front-end and back-end are inseparable, with headless commerce they can function independently, resulting in greater agility and flexibility.
At the same time, however, some companies vouch for the traditional commerce that startups and smaller companies seek at the beginning of their journey for reasons such as price, technological prowess, and ease of use. So while it is essentially a business decision driven by the “here and now”, the question of going headless commerce or sticking with traditional commerce is also closely tied to a company’s future plans and business landscape.
Let’s dive a little deeper into both models and weigh the pros and cons of each so you understand what works best for your business:
Headless Commerce: Truth vs Hype
As smartphone penetration increases, i.e. half of the world owns one, consumers are increasingly using their mobile phones for shopping and this is contributing to the use of headless commerce. By decoupling the frontend (presentation or user interface) and backend (functionalities behind the scenes), Headless Commerce ensures that cross-platform trading is possible using APIs. On the other hand, traditional trading platforms only limit companies to classic web shops.
However, building a headless commerce solution requires a significant amount of effort initially, as it requires high-end development, robust and flexible back-end functionalities, and sophisticated knowledge of system architecture. Therefore, it requires significant investment in development resources and infrastructure at the outset.
However, when you look at the benefits that a headless commerce platform ensures – speed to market, flexibility, reach, and great customer experience – it’s worth every penny spent and it’s the need of the future. Since you are not constrained by cookie-cutter themes, Headless Commerce allows you to fully expand your online presence and create immersive customer experiences that meet rapidly evolving customer needs without worrying about backend changes. Add to this the added flexibility and agility to scale as your business grows, high adaptability to user experience (UX) and APIs, rapid content delivery, and the ability to pay across multiple digital touchpoints.
Traditional trading is good if you are looking for a quick start
Traditional trading, on the other hand, is inexpensive, easy to set up and operate as everything comes as a package. Operating on a monolithic architecture, with front and back ends connected in a traditional “full stack” approach, these platforms offer many features combined in an interdependent system composed of content management System (CMS), shopping cart and webshop consists of design and product management. These reliably efficient platforms give your IT teams complete platform control. Setting up and managing a basic storefront is easy when you don’t have to make frequent changes.
However, when it comes to customizing customer experiences across multiple digital channels and touchpoints, the traditional commerce platforms are constrained by multiple limitations in terms of front-end design, user interface, add-ons, and customizations. Since these platforms leverage predefined themes, templates and components of commerce platforms like Adobe (Magento), Shopify, etc., they are included in the specific framework and technology. In addition, they have a fixed back-end, inflexible business-oriented customization code changes, and a front-end. Therefore, even a small change on the homepage would require extensive adjustments in the backend, which would take a lot of time and effort and increase the time-to-market.
Headless or traditional – the choice is yours
Using a traditional trading platform does not require exorbitant setup costs and is easy to implement. While components such as frameworks, scripts and templates can be easily applied to traditional commerce platforms, they add to the limitations of the platforms and limit seamless digital experiences. It is true that traditional trading applications have evolved to include state-of-the-art features, but many remain primarily web-centric and less open to adapting to the new digital channels and devices.
Though cost-sensitive, complex, and labor-intensive, headless commerce platforms allow an unhindered path for innovation and experimentation by decoupling the front-end and removing any constraining dependencies on the back-end. As commerce transitions from independent ecommerce sites to multiple digital touchpoints, traditional platforms are giving way to headless commerce.
The rise of cloud and microservices requires that all backend systems like CMS, Product Information Management (PIM), Enterprise Resource Planning (ERP) etc. have to provide the information for the presentation layer. Here headless commerce is a clear winner as it is about decoupled systems and decoupled commerce. It’s about separating components of the ecommerce stack so you gain more flexibility on the frontend or on the customer side. Since the interfaces work together and exchange information seamlessly, the presentation layer remains flexible and communicates with the right components in the backend.
What does Headless really stand for?
Headless Commerce is not only about distinguishing between backend and frontend, but also between all the combinations you need to enable eCommerce on the web. Headless Commerce allows different systems to communicate with each other via APIs and to work together via interfaces to exchange information. It also separates the data from the processes. It bridges the information via APIs, allowing machines to communicate with each other and transfer data between each other. Since this communication between machines or systems takes place between the layers, the complexities in headless commerce remain completely hidden from the front-end.
In terms of system architecture, headless commerce is quite logical. In a tightly coupled architecture, updating all components at once is difficult and time-consuming. In contrast, in a decoupled environment, it is architecturally and logically easier and more practical to tailor all microservices to business needs. Therefore, you can easily scale your e-commerce business, respond to market demands, and launch new CX initiatives quickly and effortlessly with headless commerce.
Because of this, most e-commerce players are gradually moving towards a decoupled system. In today’s omnichannel e-commerce environment, headless commerce has emerged as one of the most important applications for creating exceptional customer experiences. Because headless commerce makes it easier to provide the right information at the right time to the right channel.
The inevitable change
A sea-change that we’re seeing in the e-commerce industry is the growing popularity of composable commerce, an approach to selecting the best commerce components and assembling them into a customized app to meet specific business needs. This is a paradigm shift that is permeating all organizations, forcing the C-suite to pay close attention to headless commerce and its immense possibilities.
Businesses looking to stay ahead of the curve and future-proof vouch for decoupled systems to respond to the demands of high-performing customers. Headless Commerce gives eCommerce companies complete control over all elements of user interaction, enabling brands to optimize the user interface and improve customer retention and conversion rates. Because headless commerce eliminates all dependencies and the need to reconfigure any backend logic, brands can rapidly develop and implement new customer-centric solutions and achieve faster time-to-market.
With a headless approach, businesses can remain agile and platform-agnostic, keeping up with the latest technological advances in Augmented Reality (AR), Virtual Reality (VR), Internet of Things (IoT), Conversational Commerce, etc. that make the rules change for the e-commerce industry. Headless Commerce ensures seamless and consistent omnichannel enablement, improves extensibility and scalability, and equips e-commerce leaders with the agility needed to stay in the race. As it has grown in complexity, headless is no longer limited to one technology, but has evolved into a different – and better – way of doing business.
With recent trends in the retail industry pointing to contactless and seamless digital customer engagements, headless commerce platforms have attracted $1.65 billion in investments over the past two years. Retail companies looking to drive resilient and sustainable business models need flexible platforms that enable innovation at scale to participate in the digital-first economy. They are beginning to see the potential that headless technologies have in defining the future of e-commerce. Demand for headless applications will continue to grow as retailers seek more responsive and agile solutions that enable them to shape shopper shopping experiences with innovative and hyper-personalized digital experiences.
About the author
Rakesh Kumar is Chief Technology Officer at Pimcore Global Services (A Happiest Minds Company). He is responsible for developing powerful and scalable cloud applications and managing engineering and pre-sales functions across all regions. Pimcore is an open source platform for product information management (PIM/MDM), digital asset management (DAM), content management system (CMS) and e-commerce.
Featured image: ©TippaPatt