Headless e-commerce is a modern method for scaling digital commerce by separating the logic and data that powers digital storefronts (the backend) from the look and feel of digital storefronts (the frontend).
Online retail is transitioning to headless e-commerce architecture from a traditional monolithic architecture as it gives businesses the flexibility to select the tools most suited to their needs rather than being confined to a single e-commerce platform. This flexibility allows online sellers to adapt to changing consumer trends quickly as more transactions move online.
Headless e-commerce uses application programming interfaces (APIs) to connect the backend functionality with multiple storefronts, enabling customized omnichannel delivery without developers having to migrate to an entirely new platform when they need to make changes.
US online retail sales climbed by 44.5% year over year in the second quarter of 2020 while total retail sales declined by 3.6% as the coronavirus pandemic has accelerated consumers’ adoption of online shopping, emphasizing the importance of an agile e-commerce strategy.
Headless e-commerce vs headless commerce
The terms “headless e-commerce” and “headless commerce” are used interchangeably, but e-commerce refers specifically to online retail channels like desktop websites and mobile apps, while commerce is a broader term that includes offline channels such as connected store services, kiosks, and billboards.
How Headless E-commerce Works
By detaching the backend commerce functionality from the frontend retail channels, developers can work independently of marketers to quickly deploy new features—and marketers can launch new forms of branded online content without the help of developers by using a headless CMS or DXP.
The backend of a commerce application includes the functionality that enables sales transactions like the product information manager (PIM), order management system (OMS), pricing and promotions engine, and payment processing tools. Many of these individual services are known as microservices and enable headless e-commerce.
Omnichannel headless e-commerce
With the adoption of Internet of Things (IoT) devices, headless e-commerce allows businesses to use APIs to connect multiple frontends to the commerce engine for different channels and storefronts, in online and physical formats. The checkout process for each channel is powered by the same commerce engine, ensuring all shoppers have the same experience across devices or operating systems.
Specific e-commerce channels include branded websites, progressive web apps (PWAs), and mobile shopping apps where you design the storefronts—as well as search engines, social media marketplaces, online marketplaces, and comparison shopping sites where you don’t control the design but connect your data.
The flexibility provided by a headless e-commerce solution is necessary for creating consistent, seamless shopping experiences across channels with a single backend and collection of services powering it all. Without a headless e-commerce solution, separate backends, services, and platforms are needed for each channel, leading to technical debt and costly vendor management.
Modular headless e-commerce
The shift in the retail landscape requires businesses with physical stores to add commerce functionality to their websites if they were not already selling online.
Transitioning to headless architecture using APIs allows retailers operating from a monolithic architecture to add modular components with commerce functionality without having to migrate their entire platform overnight. Modules handle different functions of the shopping process and operate independently. This gives businesses the ability to gradually expand beyond browser-based storefronts to other e-commerce applications at their own pace.
Example of Headless E-commerce
Big-box retailer Walmart is using a headless architecture to transform its e-commerce business and compete with online giant Amazon.
By building a headless e-commerce platform and moving its operations to the cloud, the company connected its physical stores and online systems, and has integrated its in-store and online teams. Its online retail website features inspirational content, personalized services, and promotions. It also has a mobile app for online grocery shopping.
Its growing e-commerce fulfillment center and set of capabilities has given it the flexibility to respond to customer demand and it expects its e-commerce marketplace to account for a growing share of its business. In September 2020, it launched the Walmart Plus subscription service, its answer to Amazon’s Prime subscription, offering unlimited free delivery, online deals, and exclusive discounts.
Walmart’s US e-commerce sales grew by 97% in Q2 2020, with international markets reporting triple-digit growth. Its e-commerce margins continued to improve, reflecting progress on product mix and faster growth in marketplace sales.
- Headless e-commerce decouples the backend functionality of a retail platform from the frontend so that the infrastructure can support multiple online storefronts for product sales.
- Headless e-commerce refers specifically to online retail channels, while headless commerce includes both online and physical retail channels.
- The modular approach of a headless architecture allows retailers to add or scale up online sales channels as needed.
- Walmart is issuing a headless platform to transform its e-commerce business and respond to changing consumer trends.