Ecommerce Technology

The Headless Commerce Showdown: The Unseen Strategy Retailers Use to Win Ecommerce Market Share

Tracey Wallace / 6 min read

Businesses are living in an era of wealth, liquidity and mobility.

  • Amazon edges near $1 trillion in market value.
  • Netflix recently surpassed Disney in value.

What do both of these companies have in common?

They save people time effectively adding hours to our days otherwise spent in search of commodities or entertainment.

This ultimately delivers convenience.

Plus, time is money.

This blending of content and commerce to provide for both experience and consumerism is not unique to Amazon or Netflix – though they arguably do it the best.

In fact, traditional and digital-native brands across the globe are working fast to implement similar strategies.

The State of Ecommerce in 2018

To understand the state of retail – especially ecommerce – think of it this way:

1. Amazon is the commodity market.

Meaning if you sell there, you are competing for mindshare and subject to immense pricing pressures within the context of the most respected brands in the world.

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.

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.

2. Traditional retailers are quickly going direct-to-consumer.

Realizing they have lost community, and thus brand recognition, due to the thousands of digital native brands 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 slow down internal decision making and threaten internal innovation and testing.

3. Digital native brands number in the tens of thousands.

Thanks to SaaS ecommerce technology allowing brands to rapidly build modern ecommerce websites affordably.

Without the size to go after wholesale markets, these nimble brands have built grassroots communities and conquered Facebook advertising.

While digital commerce brands often lack the marketing budgets of the mid-market or enterprise brands they hope to displace, they are highly effective marketing and community building machine.

As such, they are causing much larger competitors to respond either through acquisition or head-to-head competition.

This state of ecommerce affairs has resulted in 3 main ways businesses go after increased online share:

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1. Monolithic.

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.

2. Commerce-led.

This strategy uses a commerce platform front-end for UX and checkout, but APIs for data orchestration across a more robust infrastructure.

Businesses using this model 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.

3. Experience-led.

This strategy decouples the presentation layer from the ecommerce platform using popular CMS solutions like WordPress for unparalleled content 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 WordPress

What is Headless Commerce?

This experience-led model is known more commonly in the retail industry as headless commerce.

Headless commerce is the decoupling of the presentation layer from the ecommerce platform, typically for more flexibility in content management and delivery, UX and even SEO.

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.

Headless Commerce vs. Traditional Ecommerce

What is the impetus behind a move to new ecommerce models?

Amazon.

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. Many brands still use a monolithic strategy.

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.

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.

headless commerce saas model

Headless Commerce Model

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.

headless commerce model

Leading Global Brands are Choosing Open SaaS

Make your retail site more flexible and innovative while also saving time, money, and launching your site faster.

Download this guide to learn how top brands tackle:

  • Direct-to-Consumer & B2C Implementations
  • Headless Commerce (API-First) Initiatives
  • And more.

Download Your Guide

Benefits of Using Headless Ecommerce Solutions

There are multiple benefits to using both commerce-led or a content-led ecommerce strategy.

Content-led strategies using headless commerce as a commerce solution can provide brands increased:

  1. Site customization and personalization options.
  2. Flexibility, familiarity and fund-savings for developers.
  3. Marketing effectiveness for innovation without hurting backend processes.
  4. Speed to market for international and omnichannel GTMs.

1. More customization and personalization.

Brands looking to custom the user experience and drive increased engagement on their sites through content experiences are often best serviced by a headless commerce approach.

This gives you the flexibility of a CMS like WordPress 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 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 they 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 MoM is innovation at speed and at cost.

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 approach can make this easy for marketers and merchandisers.

Working within a familiar CMS like WordPress speeds up their 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, the headless commerce route is easily replicable across the board, optimized for international SEO and connected to the overall data orchestration infrastructure.

Headless Commerce Examples

First of all, it’s often very difficult to tell if a brand is using headless commerce as a strategy.

This will only become more true as headless commerce becomes more mainstream and loses its URL redirect to a checkout page.

For the time being, let’s look at one headless commerce example – Kodak.

Kodak uses WordPress on the front-end to host their products, blog content and merchandising.

headless commerce kodak front-end development

For checkout, they outsource PCI compliance, checkout uptime and security to BigCommerce.

headless commerce kodak back-end bigcommerce development

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.

Executive Summary: Shifting to Commerce-as-a-Service

Some businesses, led by modern, microservices-first technological thinking via their technical teams, don’t actually want an all-in-one platform.

Instead, these brands want to pull together several API-first products to roll into their own ecommerce strategy and infrastructure.

This allows them to pick and choose between solutions they like with less risk and effort than a completely custom-built platform.

There’s a strong emphasis on being able to rip and replace any particular component as business requirements change or something better comes along.

Headless commerce’s decoupling of the performance layer allows for this, and is a good first step for retail businesses.

But Commerce-as-a-Service (CaaS), under which the headless commerce model falls, is much more than the decoupling of the performance layer. Over the next few years, expect a rise in CaaS platforms and microservice architecture as brands choose best-of-breed solution to plug and play toward increase ecommerce innovation and revenue.

headless commerce flow

Remember: ecommerce currently makes up only 13% of total global sales. As that number increases, brands will look to new, quick to test and implement, strategies that enable growth long-term.

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We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Don’t miss a post. Sign up for our weekly newsletter.

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