The digital commerce landscape is far from static. Within it, a new paradigm known as “headless commerce” is gaining significant traction.
But what, exactly, is headless commerce?
As Andrew Gordon, eCommerce payments strategist at Discover® Global Network, explained to PYMNTS, headless commerce empowers merchants to adopt a more agile and innovative approach to eCommerce, leading to better customer experiences across all channels. Headless commerce is an architectural approach in eCommerce where the front-end (customer-facing) and back-end (business logic and operations) parts of a platform are decoupled.
In traditional eCommerce setups, the front end and back end are tightly intertwined, meaning changes in one part can impact the other. This integration often leads to limitations in customization and a slower response to technological advancements or customer demands. For instance, updating a single feature might require extensive changes across the entire platform, making the overall system less agile.
“Headless commerce is about separating the customer-facing elements — the look and feel of a website — from the back-end systems that manage business functions like inventory, checkout and payments. This decoupling is achieved through APIs, which connect these two layers,” Gordon said.
This separation allows for more flexibility and customization, as businesses can independently manage and update the user interface and back-end systems without disrupting the entire platform.
And in a fast-moving commerce landscape where competition is just a click away, headless commerce is proving to be crucial for merchants looking to meet the needs of their customers while driving greater stickiness and retention.
While to the uninitiated the term headless commerce might sound like a buzzword, its implications are far-reaching, and they are already transforming how businesses and consumers interact in the digital marketplace.
Among the main benefits of headless commerce is the game-changing but simple fact that it allows businesses to choose the best tools and technologies for each part of their system.
For example, as Gordon highlighted, a merchant may need to have both their mobile app and desktop store connect to the same customer relationship management (CRM) software and payment gateway. Through the API-based architecture of headless commerce, this is possible.
Additionally, this level of configurability can also be applied to the back-end services that help merchants run their digital experiences. The flexibility of headless commerce enables companies to utilize best-in-class capabilities — for example, a CRM, payment solutions or even shipping software — right into their headless commerce solution. This ability for customization is akin to building with Legos, where different pieces can be assembled in various configurations, in this case for business success.
“Out-of-the-box eCommerce platforms often restrict businesses to the features they offer, limiting customization. Headless commerce breaks this limitation by enabling businesses to design their front-end experience across multiple channels — be it desktop, mobile apps or kiosks — while maintaining a consistent back-end system,” he said.
This flexibility also extends to the integration of new technologies and customer engagement strategies.
For instance, Gordon noted that businesses can quickly adapt to emerging trends like augmented reality (AR) for virtual try-ons or implement advanced artificial intelligence (AI)-driven customer service bots.
The ability to provide a consistent experience across all touchpoints is crucial in today’s omnichannel retail environment. As consumers increasingly expect seamless interactions, whether they are shopping online, on mobile devices or in physical stores, headless commerce enables businesses to meet these expectations more effectively, Gordon said.
The growing adoption of headless commerce and its flexibility has reduced the barrier to entry for businesses interested in this approach. Its benefits are no longer just limited to tech-savvy startups or businesses building a new online architecture from scratch.
“We’re seeing a significant shift as legacy eCommerce platforms adopt headless commerce approaches. This trend indicates a broader acceptance of the model, making it more accessible to mid-tier companies and even some smaller businesses with adequate development resources,” Gordon said.
He added that there are four key trends and innovation pillars that will support the expansion of headless commerce while fostering a more extensive ecosystem of compatible tools and services: API-driven innovation, next-generation applications of artificial intelligence (AI) and machine learning, the convergence of social media and eCommerce and the integration of payments innovation.
APIs are the backbone of headless commerce, allowing different systems to communicate and share data for services like personalized recommendation engines or advanced analytics platforms, Gordon said. He believes that as we see the digital space and payments ecosystem continue to expand, APIs will be essential part of that growth.
Powered through API connectivity, merchants can gain the ability to use AI and machine learning powered tools to further benefit their customers. This can range from an AI chatbot handling customer service questions on a website to a powerful product recommendations algorithm that increases sales at checkout.
Another space that benefits from enhanced connectivity via APIs and headless commerce is the relationship between eCommerce and social media. As more and more shoppers turn to influencers and social media for product recommendations, merchants have more tools to convert consumer interest into sales by connecting their social media presence directly to their eCommerce sites. The flexibility of headless commerce extends to payment systems as well, and businesses can integrate various payment options, from digital wallets and buy-now-pay-later solutions to cryptocurrencies, catering to diverse customer sets.
The best part? These innovations can be seamlessly integrated into the existing system without overhauling the back-end infrastructure.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More