The entry of big data and other advancements in technology have given rise to a plethora of buzzwords in the startup ecosystem. Among these, the term popularly known as headless commerce has emerged as a core element of the direct-to-commerce (D2C) business model. However, the concept is often misunderstood and not adapted fast enough to strengthen the current D2C rush.
There is no denying that today’s ecommerce ecosystem is more consumer-centric than before. People are now more comfortable shopping online and embrace new models more readily, underlining a major shift in consumer behaviour that can be primarily attributed to the Covid-19 pandemic. This has also compelled many traditional brands to take the D2C way to cater to people’s needs as and when they arise. Headless commerce helps brands with just that as they try to stay tuned to the twists and turns of fickle consumer behaviour.
The concept allows brands to maintain the front-end separate and autonomous from the back-end, making it much easier to improve the user experience at the front end without modifying the back-end interface.
As the D2C sector grows exponentially in India and abroad, Navin Joshua, founder of the Noida-based full-stack ecommerce solutions provider GreenHonchos, advised brands to explore and understand the nitty-gritty of headless commerce to achieve scale. Joshua hosted a masterclass titled How Headless Commerce Can Unlock Your D2C’s Potential at the recently concluded The D2C Summit by Inc42 and Shiprocket.
Check out the intriguing session below or read on for a snapshot of this innovative business tech model.
Headless Commerce: How The Model Works
Explaining the concept, Joshua said, “The front end, or the head, is basically the user interface or the social, digital or the IoT part of the business that can be updated or changed on the fly without interfering with the back-end. It essentially provides enterprises with more flexibility to create unique experiences.”
On a headless platform, the back-end layer constitutes a host of services such as cart management, payment processing and customer relationship management so that the front-end can be designed in various ways. It is usually a custom-built display layer that adjusts to customers’ needs and changing purchasing behaviour.
With background processes providing data to front-end modules, the goal is to use APIs to push content to any platform. To achieve this, brands need to add a few extra resources to provide data at various levels.
Citing various examples from the work the startup had done for several brands, Joshua said that many businesses leveraged inorganic means to cross the INR 100 Cr, 200 Cr and 250 Cr revenue marks in the past 12-18 months.
“We have seen a small improvement in the checkout page related to the address field and PIN code validation (incidentally, a lot of D2C founders are still struggling with it) make a 30% improvement in conversion on the same marketing spend,” he elaborated.
Then there was a public-listed company in the offline retail space that shifted to omnichannel play and managed to scale up to 8K orders a day, he added.
The Boon And The Bane Of Headless Commerce
As the front end and the back end are tightly integrated in traditional ecommerce models, brands are unable to customise their offerings, messaging and other features after a certain point. But that does not mean headless commerce has zero challenges. Here is a quick look at the pros and cons of this approach.
How Businesses Gain
- Accelerates growth: Given that the only communication between the front end and the back end happens through APIs, it helps brands innovate faster and adapt to changing consumer behaviour.
- Ensures customisation and personalisation: The ability to innovate on the fly allows D2C brands to ensure customisation and personalisation to increase customer retention and drive acquisition.
- Reduces costs: Headless commerce can be cheaper for brands as it allows them to innovate systems as per requirements, allowing companies to accommodate frequent changes in user behaviour and sales fluctuations.
- Promotes optimisation: Unlike traditional ecommerce that limits a brand’s ability to adapt to new technologies and customer trends, this model allows a business to improve operations and processes with ease.
Additionally, headless commerce helps brands integrate any business tool, improves website performance by increasing the response time and also adds transactional functionality to existing user interfaces.
What’s Not So Savoury
- Multiple integrations: Getting different technologies to work together is difficult for most brands, and the process may take longer to complete.
- Complicated onboarding: Brands generally use various touchpoints when offering an omnichannel onboarding experience. This often becomes time-consuming as it frequently necessitates creating new applications from scratch.
- Innovation on the go: To cater to constantly and rapidly changing consumer needs, brands need to develop and optimise new touchpoints. This, in turn, may require developing the front end all over again.
Citing various examples and anecdotes from GreenHonchos’ engagement with many brands, Joshua captured the best approach and strategies to implement headless commerce in a D2C environment. Moreover, with ecommerce and D2C opportunities growing so rapidly across the country, Joshua thought that going omnichannel with headless commerce would help brands unlock their potential and scale up fast.
“When you look at the ecommerce conversion rate in India compared to developed markets like the US and Europe, it is a notch lower, and that is a great opportunity (in terms of growth). Again, there is no reason for it to be a notch lower (if we do things right). So, I think headless commerce and the omnichannel opportunity will be the next big wave, unleashing D2C brands and seeing higher conversions for them,” he said.
Catch all the fantastic sessions where the leading names from the D2C ecosystem, including the founders of SUGAR, boAt, FirstCry and Lenskart and investors from L Catterton, Saama Capital, GSF Accelerator and more, provided valuable takeaways. You can find it all at the D2C Academy!Explore The D2C Academy Now