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The Future of Omnichannel Commerce with Faisal Masud and Tim Guleri [Podcast]

Gabby Schenkelberg

Gabby Schenkelberg

March 25
  •  
11 minute read
The Future of Omnichannel Commerce

In this episode of Coffee + Commerce, Tim Guleri from Sierra Ventures joins our CEO Faisal Masud to break down headless commerce and how it’s creating new opportunities for omnichannel commerce.

Faisal met Tim while he was running global shipping at eBay. Before eBay, Faisal built AmazonBasics for Amazon and was the CTO at Staples. He was also the COO for Project Wing, a Google moonshot company.

To learn more about headless commerce and advancing technology in the commerce landscape, listen to this episode of Coffee + Commerce and get key takeaways from the blog post below.

Subscribe to Coffee + Commerce

You can also listen to the first part of the conversation with Faisal and Tim about Sierra Ventures' investment in Fabric.

 

Key Takeaways

[0:57] When did the term headless commerce become popular? 

  • Headless commerce started to become popular in 2019 but really became buzzy in 2020.
  • It used to be described as microservices-based architecture. 
  • Once a product’s Application Programming Interface (API) becomes exposed, it is considered headless. 
  • Out-of-the-box commerce platforms often do not tick all the boxes for growing brands so exposing APIs is essential to enable cutting edge customer experiences.

[2:25] How do headless commerce systems operate in enterprises and the mid-market? 

  • Headless commerce is a much more modular structure for enterprises and a much more customizable structure for mid-market. 
  • In the mid-market it may mean full-stack implementation, but there is a lot of flexibility to add components on later. 

[2:57] How does headless commerce compare to omnichannel? 

  • Headless commerce reduces friction and promotes omnichannel by creating a platform that is built from the ground up to support in-store, digital, and any other avenue.
  • This is different from traditional omnichannel players that try and jerry-rig their way from a physical store to an e-commerce store. 

[4:20] How will headless and omnichannel commerce play out in the future?

  • With the innovation happening with IoT and edge devices, we are likely to see headless commerce play a role in everything from connected cars to AR/VR technology. 
  • We are going to see a lot of brands exploring the world of multi-channel like virtual reality and mobile interfaces.

[5:22] How will headless transform mobile?

  • Just like you can step into a room in VR, the mobile user experience is getting more and more advanced, especially when considering the designs that come out of Apple and other top mobile handset producers. 

[6:15] How will the edge transform with headless commerce?

  • With 5G and faster internet speeds, commerce will play a big role in streaming media. Whether it’s a video game or basketball game, the connectivity of content and commerce will be significant. 
  • When considering all of the channels required by a growing brand, it demands a headless environment. 

[7:10] How far away are we from being able to purchase from video on demand? 

  • Tim has made a couple of investments in AR/VR infrastructure development and believes it is less than five years away. 
  • Users already pause video on demand to grab a drink. Adding an option to purchase “the shirt Brad Pitt is wearing” is one way commerce can be incorporated. 
  • This is a great hand-off point, even if it only results in a “save to cart” rather than a purchase, which could easily be made with a digital wallet. 

[8:49] Why is it taking so long to implement these features? 

  • There is a time for everything. Users will continue to get used to the idea of videos as a vehicle for commerce.
  • TikTok is a great example of this already happening. 
  • Just like mobile commerce did not happen overnight, this will take some time for users to get accustomed to. 

[9:40] How will headless enable new sales channels like streaming media?

  • It will have to be seamless. Users will get lost with a 15-step process. 
  • It will likely be fringe for a while. It will have to focus on smaller, luxury items. Nobody will be interested in purchasing a commoditized product like Colgate toothpaste. 
  • Instead, it’ll likely be focused on smaller, unique brands, famous in the streetwear world. 
  • It will be a supply-driven market. Making sure it is a functionality that can also be turned off helps make it a fit for all users. 

Transcript

The Future of Omnichannel Commerce - powered by Happy Scribe

Hello, everyone, this is Rob from Fabric, and in this episode of Coffee and Commerce, we're continuing our conversation with Tim Guleri and Faisal Masud. We talk about headless commerce technology and the opportunities it's opening up for augmented reality and embedded commerce in platforms like Netflix. Tim spearheaded Sierra Ventures' Investment in Fabric during our recent 43M dollar series A and Faisal is our CEO at Fabric. If, after listening to this episode, you want to learn more about headless commerce, subscribe to Coffee and Commerce on your favorite podcast player.

And now, to the show.

So the term headless, do you remember when you started hearing about that term?

I think its making its rounds and I'd be interested to know what, you know, when Faisal thought about it. But I think 2019 is kinda when I heard about it for the first time and then it really became buzzy in 2020.

But, yeah, it was a lot more—when we did our, I don't want to say replatform because we went about it in a very different way at Staples. But when we were peeling off of IBM WebSphere and building our microservices framework for how Staples was going to decommission IBM. Back then, the more common term was moving to a microservices-based architecture. And then that kind of evolved into headless around the time that Tim is mentioning. I would say 2019 is probably accurate, I would say.

Yeah, because once the APIs are exposed, I mean, it's headless at that point. So headless is just kind of a catch-all term now for microservices, headless APIs. So you kind of touched on this already. But Faisal, in your mind, what is headless commerce beyond the kind of marketing term we hear today?

I think, you know, it depends on who you're talking to. If you're talking to a large enterprise, headless is super important to them now because they don't want to be burdened and locked in with their existing platforms and capabilities. I mean, we were doing, as you know, our GoPro check-in today. And you know what you get out of the box with Demandware doesn't really serve all the purposes. So when they hear headless, they see an opportunity that, OK, well, perhaps if you can expose APIs, that's a way to improve our experience.

And it's very modular for enterprises and it's very different for mid-market. For mid-market headless is more, "how do I get my presentation layer to be much more customized the way I want?" Which would be, in many cases, a full-stack implementation, but remaining headless. If they want to add components later to that platform, they have the flexibility to do so, whereas in enterprise it's more you are coming into their environments, whereas mid-market it's slightly different. So it's very nuanced based on who you're serving.

And then how does headless commerce play into omnichannel? So how does it minimize the friction and the effort needed to extend products and experiences through different channels?

That's a great question. I would want to hear Tim's feedback, too. But in general, right, we were actually having a conversation about this today with an omnichannel retailer that wanted to add our POS product to their suite. And what is POS in the end?

POS is essentially another head, right, in the headless commerce, it's the store. Now, what services does it have to call? The same ones: item, price, coupon - all of those - same thing. So in my eyes, you know, the challenge that you have today with traditional omnichannel players is that they were built out of a physical store infrastructure, and trying to sort of jerry-rig their way into e-commerce. So they have these two decoupled experiences that are running at a time.

You've got the OMS and POS over here with the stores, and you've got the e-commerce stack over here, and you're trying to glue code it together, somehow. The future of omnichannel is more like these native brands that we're seeing that are coming out, that the commerce platform and POS actually built from the ground up to serve both e-commerce and stores. So I think that headless plays a massive role in that, because it just provides that extra head in a way to be able to call all the APIs.

Tim, I don't know if I maybe missed anything?

Yeah, you touched on it a little, and I think the other interesting thing, Rob, is that if you look at all the innovation happening that's happening with IoT and Edge devices and services that are being introduced and being connected, I think commerce is going to be transacted on that edge as well, right? You're getting into connected cars, you're getting into sort of AR/VR, I mean, these are all new modalities where e-commerce will have to get delivered, and it is absolutely impossible to do it unless you have a, effectively a sort of, headless architecture, and then the capability to kind of take the delivery of the service, where the edge happens to be. And actually we're going to see a lot more clients "coming and going" into the world of multichannels, and it's going to become quite interesting in the next decade.

So in terms of multichannel, what's the most interesting channel for you, from a standpoint of experience and commerce, that's not really being used today? I know people talk a lot about virtual reality, but right now it's like very bulky and not very practical. So instead of virtual reality, what are some other channels you're starting to think about as an investor?

I think mobile is where... Mobile is going to transform, actually, first. And I think it's not a VR, but AR, augmented reality, which is going to start showing itself both in the browser and the mobile format. So we're already starting to see the beginnings of that when you look at the customer experience. So, for instance, you can step into an open room and do what you want, for something. These are the beginnings of the rendition as 3D.

And you can spin around, and you can do, you can be inside that avenue. So you're seeing that for sure in the mobile format and I think we're going to see that first and then mobile itself as actually as you as you've seen with the new designs that are coming out of Apple and some of the top mobile handset producers. I think that's going to push the envelope. So I think that's what I'm excited to see and where that goes.

And just to add to that, I think one one thing you'll notice more as the compute on the edge happening more and more and internet speeds getting faster, 5G and all of that, streaming commerce as one area that's going to become fairly big because natively in the streams, you know, as you know, video gaming is a big industry today. And whether you're streaming games, a basketball game or you're streaming a video game, that connectivity of content and commerce is going to become quite significant, in my opinion.

And also this notion, right. If you look at Restoration Hardware and some of these other stores that are now breaking the boundaries, I mean, our customer, ABC or similar where you have a restaurant and you have a store and you have rentals and you have a website and there's mobile, like this is many channels, and you need to have a headless environment. Otherwise, I don't know what monolith could handle these use cases. It's actually not possible.

So how far out do you think we are from like someone watching Netflix and they see a product in a movie and they can just like click or like hit the screen or like tap the remote to buy it? Do you think that's feasible? Well, it obviously is feasible, but do you think consumers want that experience? And then if they do want that experience, how easy is that to implement?

I can take a crack at that. So I've actually made a couple of seed investments in the area of AR/VR infrastructure development. And so we're going to see the cutting edge of what the content producers are doing and they're effectively disaggregating or creating these smart objects in linear format. And because now Video-On-Demand is kind of the modality that everybody is experiencing in TV through the notion that you can pause something, not just to go grab a beer or a coffee, but you can hover over and click and that object can then transact on the back end.

If the device you're watching on has your wallet, then there's no reason you can buy that red shirt right off of Brad Pitt's back. Right? So I think that's going to happen because people pause for different reasons. One legitimate reason might be that you like the dress or the shirt on somebody is that you're looking at and you want to transact right there. And by the way, that can also be a hand off point. So it could be a save to cart transaction.

So you're not you're not doing the full purchase, but it's just a bookmark. And then you come back to cart later on and you pick up from there and move on. And I think that that has already being program. And I think you're going to see it coming to linear TV or linear video on demand the next five years.

Faisal, anything to add to that?

No, I think, look, the reason some of this commerce has taken longer is because there's a time for everything. And TikTok is kind of introducing these concepts now through these micro-videos. And over time, customers are going to get comfortable and more comfortable. And it's like mobile, right? Mobile didn't explode overnight. It took time. People had to get comfortable. And in the end, it's going to be how seamless it is that you can purchase. If it's like a Google type transaction, we have to go through like 15 clicks, then it's dead, right? That's why GSX failed. I think is going to happen.

I do believe it's going to be still fringe for a while. Just because you can see a use case for luxury and you can see a use case for hard to find commodized product? No one's buying Colgate toothpaste on a video, right? Let's just be clear. They're buying a very unique Playboy Carti watch, or like some, I don't know, rappers, you know, unique offering on a hoodie -- like those are hard to find. So you will want to grab those. So it's a very supply-driven market versus a demand-driven market. That's the way I see it.

Yeah, I think there are a lot of intricacies to it, too, because if you're a cinephile like me, you don't want to have product call to actions pop up when you're watching your favorite movie. So I think like adding in the functionality so you can turn that off. So I think there are just a lot of different things people have to think of if they want to do this.

Thanks for listening to this episode of Coffee and Commerce. If you want to learn more about headless commerce, Google "making headless commerce less spooky" to read a blog post by Faisal. You can also get notified when new Coffee and Commerce episodes go live by subscribing on your favorite podcast player.

 

If you enjoyed this episode and breakdown, subscribe to Coffee + Commerce to get more expert insights on scaling e-commerce.


Gabby Schenkelberg

Gabby Schenkelberg

March 25

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