A guide to headless e-commerce and how to evaluate its fit for your business.

As a means to create more flexibility, headless e-commerce has been a developing approach since 2013 when the term was first used by Dirk Hoerig, founder and CEO of commercetools. Today, headless e-commerce is embraced by some of the world’s biggest retail brands including Nike, Sephora, and H&M, enabling these global brands to deliver a more comprehensive and omnichannel customer experience.

By definition, headless e-commerce decouples the front-end interface (what the customer sees) from the back-end technology (inventory management, payment processing, etc.) that powers the shopping experience. This means a business can use different tools and technologies to manage their store’s front-end and back-end creating a more customized, personalized, and flexible e-commerce experience that’s more ownable from a brand perspective.

Historically, market leading e-commerce platforms have all come with certain limitations in terms of customization and integration, making it difficult for brands to create differentiated experiences. But today, the trend across the ecosystem is towards embracing this notion of integrated services, first with headless, and more specifically with composable commerce. This is unlocking the opportunity for brands to build front-end experiences on a more modern tech stack with technologies like React and Vue which are more capable of powering beautiful experiences while also supporting a high level of performance. On the back-end, an e-commerce tech stack can now be powered by a range of separate “microservices” that bring a best-in-class experience to customers.

What are the typical components of a headless e-commerce solution?

There are many tools and technologies for businesses interested in adopting a headless e-commerce tech stack. Some of the most common and popular tools and technologies include:

1. E-commerce platforms – as noted above, most technologies built for online shopping are moving in the direction of headless with notable platforms including Salesforce Commerce Cloud, Adobe Commerce (formerly Magento), BigCommerce, ShopifyPlus, and commercetools.

2. Content management systems (CMS) – headless e-commerce integrates a CMS to manage a more robust online store front-end experience. Popular CMS tools for headless e-commerce include Sanity, Contentful, Prismic, and DatoCMS.

3. Front-end frameworks – headless e-commerce requires a separate front-end to be built to interact with the back-end. Popular front-end frameworks for headless commerce include React, Next.js, Vue.js, and Nuxt.js.

4. API management tools – headless e-commerce relies on APIs to connect the front-end and back-end of the online store. API management tools such as Apigee (Google) and Kong can help businesses manage their APIs and ensure their security and scalability.

When is headless e-commerce the right approach for a business?

Whether or not a headless e-commerce solution is a fit for your organization will depend on a host of considerations, and often a replatforming process will be driven by a change in the needs of the business. Perhaps your growth rate has led to outgrowing your current systems. Or maybe your brand needs greater flexibility to deliver a differentiated customer experience. Whatever the case might be, understanding whether headless e-commerce is going to add value could come down to any one of the following:

• If your brand is in need of greater flexibility – headless e-commerce will offer greater control over design, content, and functionality without being limited by the constraints of a given technology. This allows businesses to easily add new features or integrations as needs change.

• If you’re seeking greater site performance – set up correctly, headless e-commerce could help to speed up search and page load time as front-end code can be optimized for speed and performance independent of any back-end technology.

• If there’s a desire to improve the customer experience – headless e-commerce allows for almost complete control over how customers interact with your brand, allowing for a more unique and differentiated online shopping experience and third-party integrations that enable greater personalization.

• If improving the mobile experience is a priority – headless e-commerce allows the mobile front-end of your e-commerce site to be designed absent of any technology-driven constraints which means a better experience for customers purpose-built for smaller screens.

• If you’re looking for a single point of content and asset management – headless e-commerce allows for multiple experiences to connect to a single back-end system to enable seamless omnichannel integration across your desktop site, mobile app, and digital in-store services and signage.

• If better integration with your systems of record is needed – headless e-commerce is extensible by its very nature, allowing for improved integration with a PIM, ERP, DAM, marketing automation, CRM, and other applications which can help streamline operations and improve efficiency.

Headless e-commerce solves the problem of inflexibility and limitations that are often associated with market leading e-commerce platforms. By separating the front-end and back-end of the online store, businesses that require more flexibility can build highly customized and optimized e-commerce experiences that are tailored to their specific needs.

More specifically, brands with unique business models or those that sell wholesale and to B2B customers often have business rules that simply aren’t supported by traditional e-commerce platforms, requiring a solution that includes bespoke planning, design, and development to enable features and functionality that align with business needs and customer expectations. In this case, B2B and wholesale brands are perfectly suited for a headless e-commerce approach.

When is headless e-commerce not a great approach for a business?

While it offers many benefits, headless e-commerce may not be the right fit for every business, particularly those that simply don’t need the flexibility, haven't reached the scale, are under timeline pressure, or where a headless e-commerce tech stack simply does not makes financial sense.

Generally, straightforward consumer brands, particularly startup D2C brands, might find a headless e-commerce solution too advanced for their needs. Most smaller scale consumer brands need fairly standard e-commerce capabilities, and that’s where platforms like Shopify and BigCommerce shine. Their suite of core features and a range of third-party applications provide a broad offering of solutions for a nascent business with limited resources.

Normally, these brands aren’t in need of complex customizations and aren't yet able to obsess over differentiated customer experiences. Headless e-commerce is best suited for businesses that require a high degree of customization and flexibility, or have the ambition to invest into a more bespoke customer experience.

Designing and developing a headless e-commerce site can also require far more time and budget than a traditional e-commerce platform for a range of reasons such as advanced customizations or more broad integration with other systems. For organizations needing to launch quickly or to keep setup costs low, a headless solution is simply not going to be the right approach.

For a brand evaluating headless e-commerce, here’s a quick decision making process.

Determining whether to implement headless e-commerce requires a thorough approach as this can be a large financial and technical investment for your business and likely a commitment over the span of several years. Here are a few steps to take to evaluate whether or not a headless e-commerce solution is the right fit for your business.

1. Loop in stakeholders – replatforming and modernizing an e-commerce business is a transformation project and these endeavors can be high risk, high reward. Bring together your stakeholders around a shared vision and continue to partner with them on the journey to ensure decisions are made efficiently and decision makers are informed.

2. Narrow in on objectives – start with an assessment of business needs and goals. While revenue growth targets and customer engagement metrics are important, don’t overlook the contributing goals that will get you there. Does your brand need to be highly differentiated in the market? Do you want to create customer loyalty at the level of obsession? Are you hoping to create greater cultural relevance?

3. Look inwards – conduct a complete and holistic audit of your current e-commerce ecosystem and pinpoint the gaps, frustrations, and limitations. Identify the problems you hope to solve with a migration to a headless e-commerce tech stack and prioritize the outcomes you hope to achieve. Be sure to analyze data on customer behavior, sales trends, and website traffic patterns, and conduct customer surveys and interviews to understand your brand’s shortcomings from their perspective.

4. Prioritize needs – evaluate, roadmap, and prioritize the specific needs of the business that a headless e-commerce solution will support. Balance the upside of achieving certain goals and objectives with the added costs, time, and resources needed to deploy and manage your e-commerce site on a headless tech stack.

5. Define your decision criteria – create a playbook for how headless e-commerce products and services will be evaluated and how the shortlist and selection process will work. As a starting point, consider ranking services by cost, flexibility, scalability, ease of maintenance, and ability to support customizations and integrations.

Evaluating whether to implement headless and/or composable commerce requires a cross-functional team approach and careful consideration of the specific needs and objectives of the business. Your evaluation should be thorough, but remember, speed to market matters, so follow your playbook to stay on course.

This process is often taxing on organizations that have limited capacity to take on strategy efforts – similar to fixing the plane while flying it. In many cases, bringing in an agency partner early in this process can lighten the load, create focus, and offer an objective point of view. Consider how working with an agency from step two above onwards might help accelerate the process and lead to a more thorough evaluation process.

But wait, how does headless e-commerce differ from composable commerce?

Headless e-commerce and composable commerce can easily be confused, as both terms get used interchangeably. But there is a difference. While both have their similarities utilizing an API-driven architecture, they differ in their approach to building e-commerce experiences. Headless e-commerce focuses more specifically on separating the front-end and back-end of the store, while composable commerce uses modular components, or microservices, to build the store's features and functionality. For example, with composable, you can use a best-in-class search tool rather than using the search functionality provided by your selected e-commerce platform.

Both approaches offer greater flexibility and customization options, but they may be more suitable for different types of businesses, depending on their specific needs and goals. We’ll cover composable commerce in more detail in another post, but for the purpose of this post, consider headless as the initial step away from a single, monolithic solution and composable commerce a further step towards a fully decentralized approach to e-commerce.

Getting started with migrating to a headless e-commerce platform.

Embarking on a technology migration project can be a daunting and complex task. For most e-commerce leaders, this is one more large scale effort added to a long list of other operational challenges that come from running a growing e-commerce business.

This post is intended to provide high-level initial guidance in determining whether or not a headless e-commerce approach might make sense for your organization and how to approach the evaluation process.

If you’re starting to look at a headless e-commerce solution as a future opportunity for your business and seeking a partner to help guide your team through the steps, reach out to us to see how we can help.