The Meteoric Growth of Headless Commerce (And How Legacy Platforms Have Responded)
Headless commerce is taking the eCommerce industry by storm. Many large eCommerce brands will have already explored or adopted headless solutions, while not-so-technical startups will have heard the ruckus and done some exploring of their own to see how it could benefit them.
Venture capitalists have also taken notice. Various investors have been leading the charge in 2022, with the likes of fabric raising $140 million in a Series C round, Instant Commerce’s €7.5 million in total funding, Pack’s $3 million seed round, among countless others’ headless fund raises’.
What does that mean for legacy eCommerce platforms, and how have they responded?
Unpacking the Headless Commerce Trend
So, let’s first recap what headless commerce is.
Headless commerce is decoupling the frontend presentation layer (everything the customer sees) from the backend commerce layer (the functionality that makes eCommerce tick: inventory management, checkout, security, etc.).
Where did the concept of headless commerce come from? Founder and CEO of commercetools, Dirk Hoerig, was the first to coin the term in 2013.
Since then, the term has seen tremendous growth and widespread adoption.
Google Trends shows that the term is now 4-5X more popular than then, with a steady increase in interest over the years. But what does this look like in terms of practicality?
Many major brands, such as Nike, Under Armour, Target, Toyota, Carnival Cruises, and more, had already implemented headless commerce. More recently, makeup brand Ulta Beauty has embraced the headless approach among other technological innovations, and Qantas is leveraging commercetools’ API-first headless commerce technology.
With global retail eCommerce sales expected to top $8 trillion by 2026, the headless commerce trend shouldn’t be expected to slow down anytime soon.
Legacy Vendors Seeing the Signs
Headless commerce is often seen as a better alternative to traditional commerce, and formerly traditional commerce brands are doubling down on the headless commerce expansion.
In August, Salesforce unveiled its Composable Storefront, enabling retailers to build headless storefronts more easily. Brands can capitalize on a lower cost of ownership, a Progressive Web App (PWA) kit, and a growing ecosystem of plug-and-play apps. The data backs up the focus on headless commerce, with 80% of businesses currently lacking in headless commerce technology expected to invest in it over the next 2 years.
Headless commerce falls under the umbrella of MACH technologies (Microservices-based, API-first, Cloud-native, and Headless)— which legacy platforms like Sitecore are also moving toward.
Sitecore acquired Four51 and integrated it into its suite of products as Sitecore OrderCloud. By offering a headless and API-first commerce platform, Sitecore OrderCloud allows users to design commerce experiences to meet customer demand without worrying about scalability issues.
What to Do Next
As the headless movement continues its meteoric rise, it represents an exciting opportunity for companies in the space.
For headless commerce vendors, now represents the ideal time to step on the gas and continue leading the charge, convincing hesitant brands that headless commerce isn’t just the future but also the present.
Legacy platforms should recognize this as a time to pivot, similarly to what brands like Sitecore and Salesforce have managed to do. Headless commerce isn’t going anywhere, and whether that means revamping existing tools and features or making acquisitions of MACH-ready vendors will depend on their individual strategies.
Whichever route applies best to you, you must get a few things right on your journey towards becoming a serious headless commerce player.
Firstly, understand your solution as it stands today, and be transparent about its strengths and weaknesses. If you’re a legacy player, lean into that. You already have years of experience working with enterprises and should leverage that. Who better to build headless and MACH solutions than you, right?
On the other hand, headless commerce startups have their own leverage. You’re smaller and more agile, with a product that has been built specifically for API-first environments. Now is the time to add features, make your product marketer-friendly, and form partnerships with other API-first vendors and agencies alike.
Secondly, get your messaging right so that potential customers understand all of the above and more. The headless industry is slowly filling up, but that doesn’t mean you have to sound like everybody else. Discover your vision, strengths, and wins, and use them to build engaging and educational content.