Headless Commerce: the new standard

E-commerce Headless Commerce: the new standard

Published on 07.04.2021 by Stephan Lamprecht, journalist

“Headless commerce” is a phrase now increasingly heard within the context of online shopping. Find out more about what this means in the article below. And why this approach is now the new standard.

The word “headless” comes from the world of IT, where it is used to describe the separation of the user interface (generally referred to as the “front end”) from the actual logic (the “back end”).

One example here would be the “headless” installation of server software. All functions are provided with this installation, but users have to manage without the familiar mouse and menu items they are used to from Windows or other operating systems.

When it comes to headless commerce, this approach of separating the (business) logic from presentation and design is also gaining ground in online sales.

A solution for an increasingly complex world

To understand the advantages of this approach, it makes sense to look at the growing complexity of e-commerce itself. Today’s customers have a wealth of channels to choose from when shopping online. The number of options for selling products is growing, while innovation appears to know no bounds. Brand manufacturers and retailers, for example, now use the following channels to sell their products:

  • The traditional online shop,
  • Marketplaces,
  • Their own apps,
  • In-store kiosk systems or ordering terminals (e.g. as part of a multichannel strategy),
  • B2B portals,
  • IoT devices for automatic reordering,
  • Voice Commerce via language assistants such as Alexa or chatbots.

In the near future, we may even see a more significant role for smartwatches or virtual and augmented reality technologies.

There is, however, no standard software that satisfactorily covers all these functions and channels. And this is exactly where the headless strategy comes in.

How headless commerce works

When it comes to system architecture, the channels described above have plenty in common, and yet in many areas there are significant differences.

Whether purchases are made on the online shop or using another channel, product descriptions and the available stock need to be retrieved and displayed. And at the end, there needs to be a checkout process. This logic is thus required in different environments, regardless of how this is visually (or acoustically) presented. To improve the shopping experience, it would make sense for the system of an app or smartwatch to receive feedback on the current location of buyers so that only products or stores in the vicinity are shown. This type of information is less relevant at bricks-and-mortar stores, unless an outlet search function is involved.

The idea behind headless commerce involves splitting up functions into smaller services and functions (“micro services”) to replace a “big”, monolithic standard solution. The various services use defined interfaces (APIs) to exchange their data. So, for example, if information regarding the quantity of a product or a product category is required by an app, the micro service uses an interface to retrieve the data from the inventory management system.

Advantages to headless commerce – flexibility and speed

From the point of view of shop owners and brand manufacturers, there are advantages to be gained from the headless commerce approach.

  • Headless architectures are ideal for agile software development: the areas for improvement become more manageable. This allows for a targeted development of the micro services, without affecting the overall system.
  • Expanding the system with new functions is simpler: in a system in which communication primarily takes place via an API, it becomes easier to incorporate additional data sources. Functions can be added in a targeted way to where they promise the greatest benefit.
  • New channels can be served more quickly: whether it’s a new app, a new interface for the shop (or even just a new language version) or completely new technology: headless commerce allows retailers to establish a presence on new channels and to use them more quickly. Experience shows that functions directly facing the customer are subject to faster change than is the case for core processes, such as in an inventory management system. Headless commerce means that new channels such as these can be set up on a progressive basis and at a more rapid pace
  • Applications are getting faster: overall, the system will perform better and will be faster. For example, an app will only retrieve the data that it requires at that moment in time, receiving the information via an API. This makes the source code more manageable and better performing.

The rather technical sounding “headless commerce” may first appear to come from the distant future or belong to the lexicon of more technology-savvy experts. And yet it presents a strategy that may very well become the new standard in the world of e-commerce.

Stephan Lamprecht, journalist

Stephan Lamprecht has been following e-commerce developments in Germany, Austria and Switzerland for two decades as a journalist and consultant.

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