Headless commerce, composable commerce, micro-service architecture, and other associated terms have dominated much of ecommerce technology conversations in 2020 and 2021. But despite the endless flow of blog posts claiming to offer true clarification, I’m seeing that headless is arguably one of the most polarizing and misunderstood topics in the ecommerce community right now.
Even seasoned ecommerce experts have trouble articulating what headless commerce is and why merchants should (or shouldn’t) consider overhauling their tech stack for an optimized online storefront experience.
So, is the headless commerce movement a fundamental shift in ecommerce? Or are we experiencing a massive hype cycle? Should merchants and ecommerce agencies focus on headless, native platform features, or something else entirely? I’ll get into my recommendations, but first…
Before we get into all the market conditions that made headless popular, let’s get on the same page.
“Headless'' has traditionally been a term used by developers in reference to headless CMS (headless content management system). So let’s start with this definition:
A “Headless CMS” refers to any type of content management system in which the content repository (where content is housed) is separate from the visual presentation layer (i.e. the part of a website customers interact with).
In this sense, the content repository is the “body” and the visual presentation layer is the “head.” Content that is organized and stored in a headless CMS is delivered via an application programming interface (API). These are connections between computer programs (basically, how software talks to other software). Contentful and Prismic are excellent examples of a headless CMS.
#cta-paragraph-fe#Example: An ecommerce company houses all their content data (i.e. images, text, and videos) in Contentful, a headless CMS. Their developers write code to point content inside of Contentful to a custom-coded frontend. Their backend is powered by BigCommerce.
This in mind, let’s consider the definition of headless commerce in similar terms:
#cta-mini-fe#Find out if your store is a good fit for headless commerce.Take the quiz
“Headless commerce” refers to any type of ecommerce technology setup in which the ecommerce platform is separated from the visual presentation layer (i.e. the part of an online store customers see and interact with). In this sense, the ecommerce platform is the “body” and the visual presentation layer is the “head.” Data that is organized and stored in a headless ecommerce platform is delivered via APIs.
#cta-paragraph-fe#Example: An ecommerce company uses BigCommerce for all of their backend functionality (unseen by the shopper), but decides to not use their native storefront features. Instead, the brand has their developers build custom-coded frontend channels and use BigCommerce’s storefront APIs to connect this frontend to the backend platform.
“Headless commerce” generally refers to any type of ecommerce technology setup (i.e. website) in which the technology used to power the visual presentation layer (i.e. the part of an online store the shopper sees) differs from that of the backend ecommerce platform.
#cta-paragraph-fe#Example: An ecommerce company uses BigCommerce for all of their backend functionality (unseen by the shopper), but decides to use a digital experience platform (DXP) such as Adobe Experience Manager for their frontend. They connect Adobe Experience Manager to BigCommerce via BigCommerce’s storefront APIs.
It’s subtle, but there’s a difference between the formal and colloquial definitions. In true headless architectures, data that is organized and stored in a headless system is delivered via APIs. Headless architectures are API-first solutions. If I had to point to what headless is in these schematic diagrams I would circle the API/SDK layer. That’s the bit of the product that most clearly aligns with what headless is.
But is that what merchants really expected? I’d argue that while APIs and SDKs are technically “products”, I think merchants expect software products and user interfaces that are accessible by non-technical team members (vs. only developers). The colloquial definition of headless emerged because technology companies started to build solutions to meet merchant expectations of headless—and subsequently used the existing term merchants had an association with.
For good measure, let’s throw in another term that’s becoming more popular.
“Composable commerce” (a term coined by Gartner) refers to any type of ecommerce technology setup that takes a modular approach using best-in-breed solutions for each specific function of the system. The various technologies used in a composable setup communicate with each other via APIs. (By juxtaposition, an ecommerce platform has features to address most, if not all, core functions.)
#cta-paragraph-fe#Example: An ecommerce company uses React.js and Next.js to custom code their frontend. They put their build on Netlify, use Contentful for content management, and use Bolt for checkout. For the backend, they use Jasper PIM, Netsuite ERP, Klayvio, and few other softwares. They custom code the middleware for their integrations.
Now, why would ecommerce merchants—a group of folks without deep software engineering experience—suddenly start finding these developer-oriented solutions so intriguing in 2020? “Speed!”—or site load, is the simple answer. Put simply: performance gains are critical to providing a better site experience and this is becoming even more critical over time. However, various performance technologies had existed for years at this point.
#cta-mini-fe#Find out if your store is a good fit for headless commerce.Take the quiz
I believe headless popularity can be traced to five things in particular, including:
(1) Shopper expectations for richer online experiences (especially on mobile devices) increased rapidly.
(2) Technology emerged to address mobile experience pain points (e.g. the progressive web application framework).
(3) Ecommerce platforms like BigCommerce and Shopify embraced rising interest in headless technology, and opened their platform to third-party providers.
(4) COVID-19 caused ecommerce to surge, accelerating the need to optimize online channels.
(5) Venture capitalists took notice of all the aforementioned, and started funding tech companies aggressively. Funding was converted into go-to-market dollars, and the "headless" term started showing up everywhere (in many cases to leverage its popularity).
Let’s explore each of these points a bit further.
The proliferation of smartphones caused mobile commerce to grow at a steady pace, nearly quadrupling over the last five years. In 2021, mobile commerce accounted for $3.56 trillion(!) dollars in sales.
Consumers have come to expect mobile-optimized shopping experiences, and part of that expectation is rooted in site speed.
According to research, 40% of people abandon a website that takes more than three seconds to load, and a one-second delay in page load can result in up to a 7% reduction in conversion.
Deloitte’s Milliseconds make Millions study further posited “a mere 0.1s change in load time can influence every step of the user journey, ultimately increasing conversion rates.”
Overall, site speed and performance has a direct impact on conversions, and scaling merchants are seeking solutions. Emerging software vendors in the headless space made note of this significant merchant pain point, and ensured that their product was either compatible with site performance technology, or incorporated site performance technology directly into their offering.
As smartphone adoption increased, new technology emerged to address the pain points of an increasingly mobile world. Namely, progressive web apps (PWAs) were introduced as a solution. Although aspects of PWA technology had existed as early as 2000, a senior staff software engineer at Google spearheaded the initiative in 2015 and it really took off from there.
Moreover, 2018 was a big year for PWA; Google made page speed a factor when determining search ranking, and Apple announced support for PWA.
Software, scaffolding, open-source tooling for server-side rendering (SSR)—the ability of an application to display the webpage on the server instead of rendering it in the browser—and other aspects of the JAMstack started to get more attention.
While these technologies offer increased flexibility, power, and scalability, they’re built for developers. Looking at the websites for pretty much all of the companies in the diagram above, you’ll see that their marketing/messaging is largely developer-centric.
In my opinion, these products are fine choices for SaaS or web application-based startups, and perhaps true enterprise ecommerce companies (those with at least $500 million annual GMV). That said, they often do not align with the needs and workflows of non-technical marketing, merchandising, and ecommerce operations team members.
Ecommerce merchants and agencies have reported that often implementing the JAMstack caused more problems than it solved. Even merchants who saw initial ROI from the page speed gains quickly realized that their new developer-oriented tech stack had high overhead. This overhead was not just from the various developer SaaS vendors they now relied on but also from the increased development maintenance costs.
Despite these limitations, the JAMstack was the first wave of technologies posited to complement the headless commerce movement.
From my understanding, headless adoption has been common, if not standard, for the platforms serving enterprise clients for many years (e.g. Salesforce Commerce Cloud, Adobe Magento, SAP Hybris, etc.)
In 2018, BigCommerce started aggressively promoting and educating merchants about headless approaches. They published a TON of content on headless and talked about it regularly during their town halls.
Shopify’s headless landing page went up in December 2019, and my guess is that the growth of the Shopify Plus segment propelled Shopify to start offering more flexible and extensible solutions and architecture demanded by the mid-market enterprise tier.
It’s important to note that when the platforms marketed headless, they did so by showcasing the benefits of headless:
However, as I mentioned, it’s important to note the headless product that these platforms offer is an API and SDK layer. This is significant because while APIs and SDKs are technically a product in and of themselves, their function in this context is to simply facilitate integration with other products and technology.
While technically achieving headlessness, this isn’t enough on its own for most. API solutions aim to empower merchants, but businesses aren’t resourced to embrace this empowerment. As many of us are seeing in practice, they aren’t able to take action on this empowerment when rubber meets the road.
The majority of non-technical merchants can be unfamiliar with what APIs and SDKs are and often implement these solutions expecting something more like a software product (that is to say, they don’t expect all of the complex, modular, and time-intensive tech oversight and cost).
Overall, I’d argue the future looks much more merchant-centric vs. developer centric despite the efforts to empower brands initially.
While other verticals struggled in 2020, ecommerce surged like never before. Forbes proclaimed that “COVID-19 accelerated ecommerce growth four to six years.”
The ecommerce surge was omnichannel. Not only did marketplace activity spike (e.g. Amazon and Walmart), but so did direct-to-consumer (DTC) channels.
During the summer of 2020, I was meeting with consumer packaged goods companies who were telling me that their brick and mortar partners were reducing new supply, but 80% or more of their own products were sold out on their website. As you’d expect, my conversations with them were oriented around how they planned to invest more in their DTC online channels.
An increase in overall ecommerce activity equated to an increase in DTC sales. An increase in DTC sales led to increased interest in optimizing DTC channel experiences. Considering that online storefronts (websites) are the primary DTC channel, these conditions created a perfect storm for innovation in the technologies that support online storefronts.
The technology sector leapt at the chance to seize new opportunities and address pain points brought on by the market surge. This spurred innovation across the ecommerce tech stack, including areas like checkout, email, subscriptions, and storefront.
And where market opportunity and innovation went, capital followed.
Venture capitalist firms invested more than $675 billion in startups worldwide in 2021, doubling 2020′s record-setting high.
During the pandemic, investors favored software, ecommerce, digital healthcare, and fin-tech companies. Ecommerce software companies received an incredible amount of attention, and vendors in and around the headless, composable, and storefront spaces were no exception.Here is a collection of fundraising announcements specific to ecommerce frontend technology:
This is far from a comprehensive list, and only includes 2021 activity. Many of these companies raised twice in a span of 12 months. Shogun raised $35M from Accel in September 2020 and $67M in May 2021 from Insight Partners.
This influx of capital converted to go-to-market dollars in sales and marketing. Suddenly terms like “headless”, “composable”, “PWA”, and “JAMstack” started to appear across social media and in ads, content marketing, and sales and partnership conversations.
While significant investment in tech companies may indicate market validation (strong need for the product in a given market), that is not always the case. There are plenty of examples when broad category investment has fizzled because the market need just isn’t there. Sometimes that’s because the market isn’t there (think dot com bubble), or the market timing is off (think virtual reality).
Moreover, just because a company is using the term “headless” in their marketing and messaging, doesn’t mean their product is truly headless. Companies may be using that term because it’s the word that their audience recognizes as most closely matching their interest.
The answer to this question is 100% subjective.
True headless architectures are API-first solutions: powerful, flexible, and developer-oriented. The JAMstack—perhaps the most popular approach to headless in the commerce space at present—requires stitching together and maintaining about half a dozen developer tools and frameworks.
Personally, I think that true headless architectures are a strong fit for merchants that either
Absent that, I’m skeptical that headless solves more problems for merchants than it creates.
Merchants who adopt headless architecture without knowledge of frontend development or without in-house software developers put themselves at risk of developer reliance for updating and maintaining their online storefront.
At Shogun, our belief is that merchants need a genuinely novel software solution to address their frontend pain points. Frontend tooling offered by ecommerce platforms is too monolithic and rigid for scaling brands, but true headless solutions like the JAMstack (albeit flexible) are too technical and complex for the vast majority of merchants.
The data we’ve collected from our Shogun Page Builder client base of 20,000+ active merchants have given us crucial insight into merchant pain points around scaling their online storefront. We’ve discovered merchants want more tech that allows them to
Listening deeply to the motivations behind each of these drivers, we discovered:
Our hypothesis: The online storefront needs of the majority of scaling merchants are best served by a unified platform solution that addresses pain points related to visual merchandising, content management, and site speed and performance at scale.
And with that hypothesis in mind, we built Shogun Frontend.
For those seeking advice on which frontend technology to choose, I’ll say this:
A lot of companies are using the “headless”, “composable”, “non linear” terms in their marketing and messaging to ride the wave of interest in this market trend. The products offered by companies using these terms vary greatly, and many of them are actually developer tools (after all, headless is a developer approach to site architecture). My recommendation is to ignore the buzzwords and focus on the products themselves, asking questions like:
My hope is that the answers to these questions will help you formulate your own perspective for what will best address the needs of your business.
Nick Raushenbush is the cofounder of Shogun, software for building the next generation of ecommerce websites. Shogun helps 18,000+ ecommerce brands drive conversions, including Leesa mattresses, Gaiam yoga apparel, K-Swiss, MVMT watches and Chubbies shorts. Before Nick started Shogun, he founded a creative agency that has done work for Google, Roku, Soylent and Pokemon Go.