Is Headless Commerce Suitable for Your Future?

Interview with Kelly Goetsch, Chief Strategy Officer at commercetools

In the previous two parts of the interview series with Kelly Goetsch, we talked about the potential of commerce in the future and which challenges companies currently face in preparing for it. If you have missed them, you find the links at the bottom of this article. Now, we discuss whether a headless commerce platform would be a suitable solution for companies who want to become fit for the future of eCommerce.

Dennis: Let us talk about the whole customer experience: Brands and retailers need to sell online. And there are lots of ways to do it. For running an online shop, we have classical all-in-one suites, and then there is headless commerce. Are these the only two ways to choose from, or are there also other approaches?

Kelly: At the very top end of the market, organizations are buying or building from scratch. Walmart and Zalando, and some of those large organizations build everything from scratch. But to do that, you need to spend hundreds of millions of dollars a year in development and maintenance. It is expensive to build these stacks from scratch. So, you must have a good reason for doing so. That is why only the very top tier has done it. Moving a level below that, you have companies using us as the foundation, but then they are building a lot around and on top of us. AT&T is one example: They have their own crazy customized shopping cart because they have so many backend systems, but they use us for everything else. That is a perfect example of how customers are buying the foundation from us, as commerce is, in my opinion, pretty commoditized these days. This customization makes them unique as a brand. Then we have customers simply using us as a straight replacement for a legacy commerce platform. They buy a head to their platform made by us, and they do a straight implementation with minimal customizations. In the market segment below that, we start to see organizations go towards Shopify or Magento, or similar all-in-the-box solutions. That works fine for you if you are relatively small. If you do less than $50 million a year online, I recommend that you go for an all-in-one-suite. But that is not what we at commercetools do.

Dennis: So, the target group for headless commerce solutions is the midmarket? 

Kelly: I would say it is enterprise and upper midmarket. These are the best places for headless commerce.

Dennis: What are the benefits for these market segments to go headless versus any of the other approaches you have mentioned?

Kelly: It allows you to create that engaging emotional experience with your customers. Historically, when the commerce platform included the head, if you touched the frontend, you had to redeploy your entire application from start to finish. That becomes difficult to do. It becomes very time-consuming. As an example: Even if you only wanted to move a couple of pixels in the frontend, you had to retest your entire backend. That is not an economical or fast way to do it. Also, the commerce platforms themselves had poor content management systems. They did commerce well, but not the content piece. So, there are a lot of good products out there that only do content. There is Contentstack, there is Amplience, there is Contentful. There are all sorts of companies that handle CMS well. And then, there are a lot of traditional companies like Adobe, Bloomreach, and Acquia. They do DXP type solutions well. The advantage of those is that you have a tool built for business users to create experiences, and then commerce simply becomes the thing you plug in to facilitate that.

"Headless commerce allows you to create that engaging emotional experience with your customers."

,says Kelly Goetsch, Chief Strategy Officer at commercetools.

Dennis: I understand that the keyword is composable architecture. Whatever elements you need for your specific target market, you can connect it via API. And headless commerce is just much more flexible, much more adaptable to whatever target market you are targeting. For example, when it comes to connecting payment services.

Kelly: Well, there are decoupling factors. With headless commerce, your goal is to build a collection of APIs. Some of those APIs are from commercetools. Some of those APIs you build yourself. Some of those APIs you consume from other third parties. But the whole purpose of it is to be able to compose that experience. It is to swap in and out components and pieces. The advantage is: If your search vendor is not meeting your needs, then switch the search vendor. You can do so easily because it is all API-based.

"With headless commerce, your goal is to build a collection of APIs."

Dennis: Another rather non-technical question: Data privacy and GDPR is always a big topic, especially in Germany. Can headless commerce also help to get your commerce experience compliant with privacy regulations?

Kelly: Honestly, I do not see the case for that. I think it is the same regardless of the platform you use. So, I do not see a compelling reason that headless would offer better GDPR compliance over non-headless.

Dennis: I am asking because I also thought about personalizing the shopping experience. That would require the system to have access to the data to know you as a consumer. But that would be completely decoupled from the headless commerce as well? The privacy questions would rest in other components you add?

Kelly: It would probably be easier. You could argue that either way because you could say the entire commerce platform is within the scope of privacy. Or you would also have to look at all the other standalone SaaS applications that also look at data that would be under the jurisdiction of GDPR. I mean, many people probably argue that it is better to have everything in one platform to look after from a GDPR standpoint than in many different smaller components. But again, you can make the other case as well. So, I do not think it is better or worse. It is simply different.

In the fourth part of the interview series with Kelly Goetsch, you will find out if commercetools is the right solution for your needs.