Did you know that there’s a tech revolution taking the online shopping world by storm? It’s called Headless Ecommerce! Imagine a new, API-driven approach for online retailers to engage with customers across various sales channels. This innovative transformation impacts not only customer interactions but also shakes up the way supply chain technology syncs with ecommerce systems. At its core, headless ecommerce separates the visual aspect of the online user interface (UI) from the underlying business mechanics of commerce. This incredible shift in ecommerce unlocks extraordinary flexibility, scalability, and personalization opportunities for businesses.

So what’s the big deal for supply chains and their systems? In this article, I’ll shed light on these big ecommerce changes and what they mean for supply chains. You’ll also learn why retailers are jumping on the bandwagon of this API-centric headless ecommerce model. Further, I’ll explain the tech fundamentals of headless ecommerce, specify the components of ecommerce technology that are impacted, and discuss how this affects supply chain systems. Wrapping up, I’ll outline the three main technical strategies behind headless commerce and how they’re influencing supply chain tech stacks.

1. Why Multichannel Retailers Are Upgrading To Headless Ecommerce Solutions.

Multichannel retailers are increasingly upgrading to API-driven headless ecommerce solutions. Indeed, they are doing this to stay competitive in a market that demands agility and personalization. This is because the traditional monolithic platforms, with their tightly intertwined front and back ends, limit the ability to quickly adapt to new sales channels. In fact with these single-headed systems it is practically impossible to create a seamless customer experience across various touchpoints. In contrast, headless ecommerce, powered by APIs, allows for a separation of functionality. Thus, this enables retailers to independently optimize the user interface without disrupting the core transactional systems. Further, this flexibility facilitates rapid deployment of new features and integrations, resulting in a more cohesive and adaptive multichannel strategy.

Now, for a little background on these type of ecommerce tech solutions, below is a basic definition of headless ecommerce:

Headless Ecommerce Definition

“…is an e-commerce approach that decouples the frontend customer experience from the backend commerce functionality, allowing businesses to create highly customizable and unique shopping experiences across various digital channels.”

The term “headless ecommerce” is not a new term. It was initially coined in 2013 by Dirk Hoering to identify a new content-led approach to deploying ecommerce systems. These systems were different from the “single-headed suite” platforms like Salesforce Demandware, Oracle ATG, and Shopify. Since then a lot has changed. First, ecommerce customers have matured where they are expecting to use the web, their phone, or even their voice to shop online. Second, is that ecommerce has matured and there are numerous tech vendors to implement headless ecommerce solutions.

To summarize, the main reasons for retailers to adopt a headless ecommerce tech approach is that multichannel retailing has become more and more the norm. To stay competitive, retailers cannot just rely on one web site and its one user interface (UI). Now, as both customers and technology matures, retailers need to sell their products through multiple channels. This includes multiple websites, different social media platforms, mobile, difference shopping platforms, and even Internet Of Things (IoT) devices. Indeed, this is why so many retailers are adopting a headless ecommerce tech approach. Below is a summary of benefits.

Headless Ecommerce Advantages

• Able To Implement Omnichannel Personalized Experiences. Specifically, headless ecommerce enhances customer engagement by delivering tailored content across multiple platforms seamlessly.
• Increased Conversion Rates. This is because it can achieve higher sales by optimizing user journeys for conversion with a flexible front-end.
• Faster Content Loading Performance. To explain, it speeds up website load times and improves user experience with a decoupled backend and frontend.
• Ease of Integration. With headless ecommerce businesses can streamline the addition of new technologies and services with an API-driven architecture.
• Less Risk Making Software Changes And Upgrades. Here, businesses can safely make updates and enhance their ecommerce system without disrupting the customer-facing sites.
• Improved Scalability. Lastly, headless ecommerce can effortlessly handle growing traffic and expanding business needs due to a flexible infrastructure.

Now, there are disadvantages for retailers to adopt a headless ecommerce solution. These include the ongoing costs, higher complexity, difficult re-platforming, and high learning curve. At the same time, most larger retailers have no choice if they want to stay competitive. Further, the cost and difficulty to implement these solutions are now making it easier for retailers to transition to a headless ecommerce solution. So despite the challenges, more retailers, big and small, are adopting headless ecommerce in the future. 

For more information and details on the advantages of a headless ecommerce solution, see Fabric’s What is Headless Commerce?, Clarity’s What Is Headless Architecture?, and Shopify’s What Is Headless Commerce.

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2. Headless Ecommerce Tech Basics.

At its core, headless ecommerce technology is built on the concept of separating the front-end experience from the back-end commerce functionality. Specifically, this separation is achieved through the use of APIs (Application Programming Interfaces), which allow different software components to communicate seamlessly. Further, in a headless architecture, the front-end, often referred to as the “head,” can be a custom-built application, a mobile app, or even a voice-activated service. While, the back-end remains a robust platform that handles the business logic, inventory management, and order processing.

This modular approach empowers developers to use their preferred tools and frameworks to create rich, engaging user experiences without being constrained by the back-end platform. To further explain, see below for a simplistic example of how headless ecommerce works and the tech basics of the ecosystem it operates in. 

a. Example Of How A Headless Ecommerce Tech Solution Works.

To get a basic understanding of how a headless ecommerce solution works, below is an example 3-step process. Thanks to Instant for this following simple explanation.

• 1) Sell. A customer visits your ecommerce site. The front end loads in their web browser, fetching product details from the Shopify backend via an API.
• 2) Purchase Process. Upon making a purchase, the front end sends a request to the backend through an API.
• 3) Complete Purchase. The backend processes this request and communicates back to the front end, confirming the successful completion of the purchase.

b. MACH Ecosystem That Empowers Headless Ecommerce.

The first ecommerce platforms were monolithic in nature where all ecommerce functionality was bundled together. Now information technology has matured. Indeed, retailers can now take advantage of headless ecommerce solutions as well as more complex composable ecommerce architectures. To explain, Composable Ecommerce is like Headless Ecommerce, but it extensively leverages more microservices and API making it more complex. On the other hand, a simple headless ecommerce solution just decouples the frontend UI from the backend ecommerce platform. So, to understand the basics of the technologies enabling headless ecommerce, see description below of the MACH architecture from the Mach Alliance. 

What Is The MACH Ecosystem?

• M – Microservices: Individual pieces of business functionality that are independently developed, deployed, and managed.
• A – API-first: All functionality is exposed through an API.
• C – Cloud-native SaaS: That leverages the cloud, beyond storage and hosting, including elastic scaling and automatically updating.
• H – Headless: Front-end presentation is decoupled from back-end logic and channel, programming language, and is framework agnostic.

In summary, that’s the basics of headless ecommerce. Namely, it is a decoupling of the front-end user interface from the back-end -commerce operational processes. Further, this type of solution can take advantage of microservices, takes an API-first approach, and it is cloud-based.

For a more detail explanation of headless ecommerce and composable commerce, see Forbytes’ Exploring the Essence of Headless and Composable Commerce for Modern Businesses. Also, to get a better understanding of Microservices, see my article, Microservices’ Advantages And Cautions: Spotlight On This Awesome Tech In The World Of Ecommerce.

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3. What Are The Components Of An API-Driven Headless Ecommerce Solution?

An API-driven headless ecommerce solution typically consists of several key components working in concert. First, there’s the ecommerce back-end, which includes the core commerce functionality such as product information management, order processing, and payment gateways. Next are the APIs themselves, which serve as the conduits for data and functionality between the back-end and any given front-end. Other components include content management systems (CMS) for handling digital content, customer relationship management (CRM) for managing customer data, and various front-end applications that range from websites to mobile apps or IoT devices. Lastly, each component is designed to interact through the APIs, providing a cohesive yet flexible ecosystem for retailers to manage their online presence.

From a supply chain perspective, I have grouped the components of headless ecommerce solutions into 3 groups: API integration, supply chain-facing components, and multichannel customer-facing components. See below, for a description of the various headless ecommerce components.

a. API Integration: The Gateway to Functionality.

First, the API layer acts as the pipeline for data and functions, connecting the headless ecommerce back-end with various front-end experiences. Take Stripe’s API, for instance; it integrates payment processing into ecommerce platforms with ease. From a supply chain viewpoint, APIs prove crucial in supporting retailers with headless eCommerce solutions. Further, supply chain staff must have proficiency in API integration. Also, particularly for 3rd party logistics (3PL) providers, they need systems with robust APIs capable of interfacing smoothly with essential customer-facing systems and microservices.

b. Supply Chain Facing: Backend Commerce Transactional Systems.

Second, there are several systems within a supply chain that may need to integrate and operate within a headless ecommerce ecosystem. Below are descriptions of these different types of supply chain systems and the significance of these systems operating in concert with a headless ecommerce solution.

1) Ecommerce Backend Platforms.

Ecommerce backend platforms like Shopify Plus and Magento provide the core ecommerce functionality and are capable of operating without a traditional front-end, interfacing through APIs. For example, a merchant might leverage Magento as the backbone for processing orders through various online marketplaces. In fact, most leading ecommerce platforms now offer a headless ecommerce option through APIs versus retailers using both front-end and back-end functionality. From a supply chain perspective, retailers with a headless ecommerce capability can more easily swap out app interfaces such as shipping, order fulfillment, customer service, inventory management, and accounting interfaces.

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2) Payment Gateway Integration.

Payment gateways, such as PayPal or Adyen, are integrated into an ecommerce system via APIs to facilitate secure payment transactions. For example, an online bookstore could integrate PayPal to offer customers a familiar and trusted payment option. Nowadays, this is quite common for retailers to offer several payment options, especially if they have a headless ecommerce solution.

3) Customer Relationship Management (CRM) And Customer Service Systems.

CRM systems such as Salesforce or HubSpot collect and analyze customer interactions, providing personalized insights and support through API integrations. For example, a cosmetic brand might use Salesforce to track customer purchase history and preferences for targeted marketing. In regard to customer delivery experience. Indeed, retailers with a headless ecommerce solution can more easily swap out or upgrade their customer service systems.

4) Order Management System (OMS).

An OMS like Brightpearl allows retailers to manage orders from all sales channels in one place, often interfacing with headless commerce systems via APIs. For example, an omnichannel apparel store could use Brightpearl to synchronize online and in-store orders. So, retailers with a headless ecommerce system can more easily upgrade their front-end UI and add new customer channels without major disruption to order fulfillment operations. And on the other hand, it is also easier to upgrade order fulfillment systems without having to disrupt sales channels.

5) Enterprise Resource Planning (ERP).

ERP software, such as SAP or NetSuite, integrates all business processes and shares data across departments through an API-driven approach. For example, a manufacturing company could employ SAP to streamline procurement, production, and distribution processes within its headless ecommerce framework. Again, a headless ecommerce operations makes it easier to phase out an ERP or upgrade it without major disruption to upfront ecommerce systems

c. Multichannel Customer Facing: Frontend User Interfaces And Backend Content Management Systems.

Now, there are also several components of a headless ecommerce solution that do not have a direct impact or interface with supply chain operations. Most of these systems or components are either frontend user interface capabilities or backend content management systems (CMS) designed to enhance the user experience. Below is a list of these types of non-supply chain type systems.

• Frontend Frameworks and Technologies. Provides developers with the tools to build fast, interactive user interfaces for headless ecommerce solutions. Also, this would include progressive web apps (PWA) for mobile users.
• Personalization and Customer Experience Engines. These engines increasingly use AI and machine learning to tailor the shopping experience based on customer data.
• Digital Experience Platform (DXP). An integrated set of technologies designed to create, manage, and optimize customer-facing digital experiences. 
• Headless Content Management Systems (CMS). Content management capability without a dedicated frontend, allowing content to be delivered via APIs to any platform.
• Product Information Management (PIM). Able to manage product data centrally and syndicate it out to various sales channels through API connections.

For more detailed discussion of the components of a headless ecommerce solution, see ScienceSoft’s Headless Commerce, and BigCommerce’s Headless Commerce.

4. Three Principal Strategies for Headless E-Commerce and Their Impact on Supply Chain Tech Stacks.

There are three principal tech approaches to headless ecommerce, each with its distinct impact on supply chain tech stacks. As stated previously, key advantages of these innovative approaches are greater flexibility, scalability, and better customer-centric experiences. Specifically, the three principal strategies are: API-based ecommerce platforms, API-based CMS platforms, and API-based microservices strategies. Each approach offers unique advantages and considerations that I’ll highlight below.

a. Ecommerce Platform Strategy.

With this strategy a retailer builds their headless ecommerce solution around their ecommerce platform. In this case, this strategy is best used by retailers that are both satisfied with their ecommerce system and are more focused on ecommerce transaction processing. Also, they desire to keep their ecommerce systems simple and keep costs low. Lastly, they favor efficient ecommerce operations over providing extensive content for their particular customers’ experience.  For example, a retailer that is primarily competing on price would best use this solution. Many well known ecommerce platforms such as Shopify, BigCommerce, and Commercetools offer a headless ecommerce platform. See ChargeBee’s 12 Best Headless eCommerce Platforms for the complete list.

b. CMS Platform Strategy.

With this strategy, a retailer builds their headless ecommerce solution around their content management system. In this case, this strategy is best used by retailers that strongly rely on their brand to sell their product. Further, this may be best where the retailer is service-based or a content-based customer journey is critical for sales.  This approach allows for greater design freedom and content optimization. As such, a retailer would use this strategy to deliver personalized content across various channels without altering the core content infrastructure, leading to more tailored customer engagement. At the same time, the retailer would have an ecommerce component as part of the overall solution.

c. MicroServices Strategy.

Embracing an API-based microservices strategy means adopting a modular approach to application development, where each microservice operates independently but communicates through well-defined APIs. Another name for this modular approach is called a composable ecommerce solution. With this approach, the retailer has maximum flexibility to create multiple user journeys and at the same time have sophisticated underlying workflows. Also, this allows the retailer and its supply chain to rapidly adapt to changes by updating or adding individual services. As an example of a microservices approach, a retailer could replace a manual returns process with an automated returns processing service that integrates smoothly with existing customer service tools.

For more discussion on these three approaches, see ScienceSoft’s Headless Commerce.

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