The Headless Commerce Showdown: The Unseen Strategy Retailers Use to Win Ecommerce Market Share
The Headless Commerce Showdown: The Unseen Strategy Retailers Use to Win Ecommerce Market Share
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Ecommerce businesses today are facing many of the same hurdles. Customer expectations are rising. Online competition for their eyes and dollars is fierce. They can afford to be choosy in which brands receive their attention and then their business.
In a survey conducted in partnership with Retail Dive and BigCommerce, 86% of business leaders said they are experiencing rising customer acquisition costs (CAC). As paid media costs rise along with greater online competition, having a strategy to attract organic traffic is vital.
In order to compete, businesses have to create an online experience that brings customers in. One way to do that is with valuable, engaging, and easy-to-find content. The site then needs to convert these visitors into customers with a frictionless digital journey.
The blending of content and commerce to provide for both experience and backend ecommerce functionality is being adopted by more and more brands.
The strategy many retailers are using to accomplish a content-led online store is headless commerce. Headless commerce is the decoupling of the front-end presentation layer from the back-end ecommerce solution that manages all commerce functionality.
Here’s an overview of how and why headless is being used to blend content and commerce.
Once you’ve explored the infographic, learn more data-driven insights about headless commerce in our playbook, “Driving Down Customer Acquisition Cost By Integrating Content + Commerce.”
What Is Headless Commerce?
Now let’s dive a little deeper into the ins and outs of headless.
As mentioned previously, a headless commerce architecture describes the decoupling of the presentation layer of a website from the ecommerce functionality. Developers can utilize their frontend technology of choice to deliver high-quality content experiences, and plug in an ecommerce solution on the backend that manages all commerce functionality.
Ecommerce platforms in this model serve up PCI compliance, security, fraud management and inventory management that can also connect to larger, key infrastructure points such as ERPs, PIMs, OMS and POS.
For brands, it’s easy to see how headless commerce can provide more options when it comes to ecommerce platforms. For experience-focused brands like lifestyle products, direct to consumer (DTC) brands, and brands relying heavily on influencer and native advertising, a content-led or experience-led strategy like headless commerce is often a no-brainer.
The State of Ecommerce in 2020
There are several trends driving the current retail and ecommerce landscape. The convergence of some of these factors is why headless is growing in popularity in 2020.
1. Amazon is the commodity market.
If brands sell their products on Amazon, they are competing for mindshare, especially from Amazon itself, and are subject to immense pricing pressures within the context of one of the most respected brands in the world.
In recent months, Amazon has proven that it is planning on pushing more and more native products onto their platform, potentially shutting out third-party brands, especially those who do not use Amazon fulfillment services.
But more than 50% of Americans begin their product search on Amazon, so it’s wise to think of Amazon as a sales channel rather than a competitor while you’re developing your omnichannel strategy.
Still, though it produces short-term profit, it eats into long-term return –– and that’s not accounting for any future Amazon initiatives that eat into additional markets. Amazon is not the be-all, end-all. Instead, brands are looking for solutions that solidify their own voice and presence — while also offering steady ecommerce system functionality and easy checkout.
2. Traditional retailers are quickly going direct-to-consumer.
Big box stores are realizing they have lost community, and thus brand recognition, due to the thousands of digitally native vertical brands (DNVBs) that have focused solely on establishing a lasting connection with consumers.
But shifting to direct-to-consumer from a B2B wholesale model isn’t easy. Tech debt from historic open source or custom-built ecommerce technology solutions slows down internal decision making and threatens internal innovation and testing.
Headless solutions enable brands to be more nimble and make changes quickly to stay current.
3. Digitally native vertical brands number in the tens of thousands.
This is in part thanks to SaaS ecommerce technology, which allows brands to rapidly build modern ecommerce websites affordably.
Without the size to go after wholesale markets, these nimble brands have built grassroots communities, conquered social media advertising, and are making true waves in digital native advertising — that is, advertising that you don’t even know is advertising.
While digitally native vertical brands often lack the marketing budgets of the mid-market or enterprise brands they hope to displace, they are a highly effective marketing and community building machine.
These brands are causing much larger competitors to respond either through acquisition or head-to-head competition.
4. Customer acquisition costs are rising.
Take a look at the infographic above, and you’ll see some remarkable trends. Retail Dive surveyed 106 ecommerce executives and marketing managers globally, and found that customer acquisition costs were rising for the vast majority of those surveyed. More than half of participants reported an increase of more than 20%.
This is not a new trend. In fact, research shows that it has increased by nearly 50% over the last five years.
What’s the reason for these rising costs?
The cost for ad placements in paid media is increasing, just as their effectiveness is decreasing. Businesses are choosing to diversify their marketing to draw in organic traffic through creative content that captures the attention of potential customers.
3 Models for Structuring Ecommerce
This state of ecommerce affairs has resulted in 3 main ways businesses go after increased online share:
This is where ecommerce first started, back in the days when hardware and software were inextricably linked. For instance, if you buy IBM hardware you must then, therefore, use IBM software. The industry has largely since evolved from this model.
This strategy uses a commerce platform front-end for UX and checkout, but APIs for data orchestration across a more robust infrastructure.
Businesses thenl often implement a PIM, ERP and OMS for product information management, accounting and customer integration and inventory management across channels.
Businesses using this model are typically using SaaS or open source technologies.
This strategy decouples the ecommerce platform from the presentation layer, so can use popular CMS solutions like WordPress, DXPs like Drupal, PWAs (progressive web apps), or custom frontend solutions for unparalleled experiences that increase brand value perception and drive to checkout.
In this model, the ecommerce platform provides PCI compliance and inventory management – though can be connected to additional systems like ERPs, PIMs, or OMS tools via APIs.
Headless Commerce vs. Traditional Ecommerce
What is the impetus behind a move to new ecommerce models?
With 55% of product searches happening on Amazon, brands cannot afford to not be there. But Amazon is a commodity market. Therefore, brands are looking for ways to turn their sites into value destinations driven by community, content and brand experiences.
The Traditional Ecommerce Model
The most traditional ecommerce model is the monolithic model mentioned above. Many brands still use a monolithic strategy, and many agencies still recommend a monolithic strategy for enterprise and well-established brands.
The downsides to a monolithic strategy are slow go-to-market timelines and high development costs. This delays innovation.
Upsides to a monolithic model are full platform control for the IT department — which may come in handy if an ecommerce strategy or site experience needs extreme customization.
Open SaaS Ecommerce Model
Commerce-led or commerce-first models use APIs for data orchestration and give relative control to IT teams for infrastructure connectivity. On a SaaS platform, the number of API calls available is important to making sure this functions properly.
Open SaaS is a SaaS platform architecture choice. It includes the following:
- High or unlimited API call volumes.
- Multiple endpoints.
- Well-documented developer documents.
- A heavy focus on API development in product roadmap make.
This is what an open SaaS architecture looks like.
Content, Experience, and Commerce Platforms
Headless commerce takes open SaaS one step further, completely decoupling the presentation layer of the ecommerce platform.
API connectivity and robustness is important in ensuring data orchestration across the decoupled systems.
This is what the headless commerce model looks like.
Why Headless? And Why Now?
There are multiple benefits to using both commerce-led or a content-led ecommerce strategy.
Content- and experience-led strategies using headless commerce can provide brands increased:
- Site customization and personalization options.
- Flexibility, familiarity and fund-savings for developers.
- Marketing effectiveness for innovation without hurting backend processes.
- Speed to market for international and omnichannel GTMs.
- Conversion rates and lower customer acquisition costs.
Additionally, headless commerce opens up a world of possibilities with brands that are looking for a content-led strategy to begin with. There are now truly no limitations to the customizations that can occur in the digital ecommerce space.
1. More customization and personalization.
Brands looking to drive increased engagement on their sites through content experiences are often best serviced by a headless commerce platform and approach.
This gives you the flexibility of a CMS like WordPress or Drupal with the security of an ecommerce platform like BigCommerce, which manages PCI compliance and checkout uptime, among other aspects.
2. Increased flexibility, familiarity and fund-savings for developers.
Facebook.com and WordPress sites attract roughly the same number of monthly unique visitors, but Facebook does it with 25X the employee count.
WordPress employs less than 400 people.
All the rest of the work being done for sites using WordPress is accomplished via agency or freelance front-end developers and designers.
And with nearly 30% of the modern web using WordPress, some studies suggest that upward of 25% of freelance developers make their entire salary off of WordPress development.
Indeed, you can throw a stone in any direction in most cities in the U.S. and have it land within a few feet of a WordPress developer. That is how ubiquitous WordPress development is.
To save time in finding a developer and on costs is having a developer work in a system in which you aren’t familiar (some ecommerce platforms use proprietary coding language, for instance), going the headless route can lower the total cost of entrance or launch.
3. Marketing effectiveness for innovation.
The keys to growing ecommerce revenue month-over-month is innovation at speed and at cost.
Agencies and ecommerce marketing teams need to be able to get programs and campaigns up quickly, A/B test them and then double down on what is working and get rid of what isn’t.
A headless commerce platform approach can make this easy for everyone. Working within a familiar CMS speeds up productivity, while maintaining the security, inventory syncing and data orchestration needed for the larger organization.
4. Speed to market in new geographies or channels.
Combine all of the advantages above and now apply them to the process of launching in new geographies or launching micro-brands.
Once you have the system setup, a headless solution is easily replicable across the board, optimized for international SEO and connected to the overall data orchestration infrastructure.
5. Increased conversion rates and lower CAC
As seen in the infographic at the beginning of this article, customer acquisition costs are rising for a number of businesses due to an increase in paid advertising.
Headless is an effective way of reducing these costs because your brand can use a content- or experience-led strategy to draw in organic traffic instead of relying on paid advertising. Dynamic and smooth customer experiences also help increase conversion rates.
What Headless Means for Agencies
If you’re reading this from the perspective of an agency who works with brands, headless also has a lot of relevance for you as you consider what will give your clients a scalable online store that can drive growth and attract customers.
Headless can open up a world of possibility from a client acquisition standpoint, as well as a way to offer more digital ecommerce options. Brands who live on WordPress and other CMS platforms or who use a customer frontend no longer need to re-platform to get ecommerce added into their digital experience — which saves time, money, and headaches.
As an agency, offering a headless approach allows you to implement ecommerce with brands that are already using a CMS platform or other frontend technology, without making them do a full re-platform — thus maintaining their important content-first strategy.
Headless Commerce Use Cases
Whether you prefer WordPress, Drupal, Bloomreach, Adobe Experience Manager or other CMS/DXPs, or have your own custom built solution with leading technologies like Gatsby –– headless commerce still works in just about any use case.
All you need is an API connection to decouple the BigCommerce presentation layer and then plug the platform in to where you need it to work.
The most common reasons for using a decoupled SaaS ecommerce platform in combination with a separate frontend solution are:
- PCI Compliance mitigation: Less work for IT teams, as the SaaS provider takes on the risk.
- Checkout security and fraud protection: Same as above. Less work for IT teams as the SaaS provider takes on the risk.
- Open architecture & extensibility: Utilize pre-built integrations with ERPs, CRMs and more, or custom build your own with additional APIs and SDKs.
Here are a few examples of frontend possibilities used in headless commerce, including popular CMS and DXP platforms and PWA solutions.
WordPress is the CMS of choice for more than 30 million websites around the globe.
As such, it is the leading CMS in the market. Brands from the start-up next door to The New York Times use WordPress to run their businesses.
WooCommerce was for a long time the only serious player in that market. However, WooCommerce’s drag on site speed as well as high-cost for security and implementation (WooCommerce is an open source solution) have pushed would-be users to lower-cost SaaS ecommerce platforms.
Those ecommerce platforms, however, have historically had a poor content management system (CMS).
After all, it isn’t what they were built for.
With BigCommerce’s launch of the BigCommerce for WordPress plugin, there is a now a scalable, SaaS solution available for the WordPress brand.
“Razoyo is excited to be involved with BC [BigCommerce] partnership from several aspects. We believe the future of headless commerce rests in the ability to marry an easy to use CMS system with best in class e-commerce capabilities. We feel the BC4WP path is exactly what content rich, product focused merchants are looking for.”
— Jason Boslow, Business Development and Sales Manager, Razoyo
Drupal is considered the leading enterprise CMS solution.
One of the main reasons why Drupal is preferred by enterprise organization is its security. Drupal is the preferred CMS for governmental agencies and websites like whitehouse.gov because of the high level of security. In addition, Drupal is designed for custom development.
Whereas in the WordPress community, folks like to use plugins (hence the BigCommerce for WordPress plugin), those in the Drupal community like to custom build. As a result of custom build versus plugins, Drupal often doesn’t have the same site load lag times as WordPress –– and it can handle a much larger volume of content. Other than that, some designers, developers and editors just plain prefer Drupal over WordPress.
BigCommerce partners with hosting providers Acquia and Pantheon to deliver a world-class headless commerce experience on Drupal. In addition, a connector between Drupal and BigCommerce has been built by partner Acro Media.
“The WordPress and Acquia integrations with BigCommerce certainly stand out for marketers. As decoupled and headless commerce solutions become increasingly popular for marketers to deliver dynamic content across many devices, the demand for a rock solid back-end platform capable of supporting a larger number of API calls becomes even greater. From both a cost and performance standpoint, BigCommerce is one of the best options to utilize for this type of setup.”
— Alec Berkley, Channel Sales Executive, Silk Software
Bloomreach is a digital experience platform.
Large, enterprise retailers are a perfect fit for this headless ecommerce CMS solution. Bloomreach offers a microservice / headless architecture and APIs to reduce IT complexity in powering an optimal customer experience from homepage to checkout.
If you are running a complete omnichannel business, Bloomreach’s microservice architecture and partnership with BigCommerce for a headless commerce solution is worth taking a look at.
4. Adobe Experience Manager
Adobe Experience Manager (AEM) brings together a content management system (CMS) and digital asset management (DAM) in a single place. It’s a comprehensive solution for building websites, mobile apps, and forms, directly alongside marketing content and assets. It has native connections to Adobe Creative Cloud, making it easier to get content to market faster and create the personalized experiences.
Adobe Experience Manger features a CMS, DAM (digital asset management, digital enrollment and forms, and managed services. Together they offer a number of benefits.
- Create faster with native Creative Cloud connection: Make it easier for creatives to create, marketers to approve and publish, and both teams to work together better.
- Do more with smarter digital asset management: Save time by editing, optimizing, and delivering them, too — all from one platform.
- Eliminate tedious tasks with asset automation: Use AI to automate tagging, cropping, workflows, and distribution — doing in minutes what used to take hours.
- Engage more customers with rich media delivery: AEM’s AI and machine learning brings hidden opportunities and answers to everyone with the click of a button.
- Build Lifetime Value: Deliver digital experiences over the lifetime of your customer that build brand loyalty and drive demand.
- Be Consistent Across Channels: Deliver amazing content across websites and mobile, to in-store and beacons.
- Get Timely and Personal: Deliver and manage experiences that are responsive, relevant and social. Place the customer at the center.
BigCommerce for Adobe Experience Manager is a full-featured headless commerce integration built by TA Digital specifically for the digital experience platform (DXP). It can enable brands to do all of the following:
- Integrate Commerce + Experience: Build immersive sites with the Adobe Creative Suite, building on top of BigCommerce product and user data to deliver tailored experiences.
- Page & Category Creation: BC4AEM populates Product Category Pages (PCPs) and Product Detail Pages (PDPs) upon syncing BigCommerce to AEM, helping reduce time to market.
- Built for Business Users & Marketing Teams: Business users can sync and manage product data within AEM, allowing marketing teams the ability to further augment as needed in AEM.
- Reduced Burden of PCI Compliance: Enhanced ecommerce security and peace of mind. Increase conversion and security with BigCommerce’s fully-embedded checkout. Deliver the fast, responsive checkout shoppers expect, while reducing the burden of PCI compliance.
Sitecore is another leading CMS used by organizations globally to create personalized digital experiences.
iMedia, a leading digital agency, created a package deployed plugin BigCommerce for Sitecore that allows businesses to deploy the rich content experience of Sitecore with the ecommerce power of BigCommerce.
“Both Sitecore and BigCommerce are leaders in their respective verticals. Knowing that an enterprise headless commerce option is available should arm not only technologists but marketers with a strong strategy to help deliver more revenue to the bottom line.”
— Brian McGovern, Partner, Client Services, iMedia Inc.
5. Progressive Web Apps.
Progressive web apps (PWA) are web applications that use the latest web capabilities to deliver a native app-like experience to users. PWAs are web applications that are regular web pages or websites, but can appear to the user like traditional applications or native mobile applications. PWAs combine the capabilities of websites and mobile software to create an immersive user experience that can lead to higher conversion rates and more time spent on site.
These technologies are becoming more valuable for businesses to have as more and more customers are shopping on mobile devices. By 2020, 50% of online sales will be on mobile, according to research by eMarketer Inc.
Big brands from AirBnB and Twitter to BMW and Starbucks are already using PWAs and seeing big results.
BigCommere is committed to providing merchants the capability to leverage PWAs. We have several upcoming product launches intended to make this sophisticated tech more approachable and have an almost native-feel within our platform. These will enable developers to build workable solutions faster and more intuitively.
Here are a few ways brands can leverage PWAs on the frontend in a headless implementation.
- DEITY: In October 2019, this microservice-oriented platform, launched DEITY Falcon for BigCommerce. This gives BigCommerce merchants the ability to use PWAs on the frontend to deploy highly-engaging, native app-like experiences on both desktop and mobile devices. DEITY Falcon for BigCommerce is the first direct PWA front-end available within the BigCommerce platform.
- Vue Storefront: Vue Storefront allows merchants to build engaging user experiences across all devices. It easily connects to all major ecommerce backends, including BigCommerce. The solution uses PWAs to power the rest of the experience and allows brands to improve their UX without making changes to the backend.
- Gatsby: Gatsby is a static site generator popular with developers for creating blazing fast, modern apps and websites with React. Gatsby can be used in a headless implementation to create PWAs by tying into the BigCommerce APIs. Here’s an example Gatsby, BigCommerce and Netlify CMS project meant to jump start JAMStack ecommerce sites.
6. Custom Solutions.
Have a custom CMS solution? No problem.
Custom content management systems can use BigCommerce’s APIs to decouple the BigCommerce presentation layer, plugging in the back-end system to maintain PCI compliance, checkout security and fraud management –– along with inventory management and integration to ERPs, CRMs and more.
For a little help in actualizing what’s truly possible, we have also created a Developers Guide to Headless Commerce to help.
Unlocking Flexibility: Examples of Headless Commerce in Action
First of all, it’s often very difficult to tell if a brand is using headless commerce as a strategy just by looking at it.
This will only become more so true as headless ecommerce becomes more mainstream and loses its URL redirect to a checkout page.
For the time being, let’s look at a few headless commerce examples.
Irish fashion designer Louise Kennedy uses WordPress on the front-end to host their products, blog content and merchandising.
For checkout, they outsource PCI compliance, checkout uptime and security to BigCommerce.
This also allows them to use integrated payment options like Amazon Pay, PayPal One Touch, Apple Pay and more without having to do the interaction work themselves.
This saves time, saves money, increases security and allows for fast innovation and campaign launch to remain competitive in the industry.
Carluccio’s built this presentation layer (i.e. the site experience) on WordPress, then used the BigCommerce for WordPress plugin to implement a headless commerce solution.
This allows a customer to stay on the same site (no subdomain) throughout the experience.
With a front-end built on the Sitecore CMS, Duxiana maintains the rich and detailed imagery that helps illustrate the benefits and features of their products — while also having powerful and secure ecommerce on the back-end for the purchasing process.
Duxiana mattresses have a lot of customizable features, so it was important that they maintained a management system that solved for all of the different variants that the product may have.
4. Canvas 1839.
Canvas 1839 is an Austin-based seller of high-quality CBD lotions and oils. They used Gatsby and BigCommerce to build their site.
Using PWAs enables their site to be accessible and intuitive on both desktop and mobile devices.
The Future Is Here
In our survey with Retail Dive, 60% of participants identified two strategies as the most important to managing or reducing customer acquisition costs: creating content to publish via their own channels and improving their overall digital experience.
As we continue to move into a relationship marketing model that’s informed by content, blended with commerce, and based on experience, you have to be extremely agile and highly adaptable to thrive in our ever-changing marketplace.
After all, the only constant is change, and you’re going to have to get really comfortable with it because it’s coming whether you like it or not.
SaaS ecommerce solutions are, by far, the best platforms for enabling you to quickly adapt to change while achieving a lower total cost of ownership, a faster time to market, greater security, and everything you need to deliver a world-class online shopping experience. Open SaaS and headless are a way you can achieve all of this with added flexibility and choice when it comes to what front-end you use.
If you want to learn more about how headless commerce is being used to drive content-led and experience-led online stores, check out the BigCommerce headless commerce solution.
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The Retail Dive and BigCommerce Playbook
In partnership with Retail Dive, we surveyed 106 executives and marketing managers globally to learn what’s driving rising customer acquisition costs (CAC).