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In recent discussions about eCommerce, the term headless commerce has gained significant traction. But what does it entail, and why is it crucial for Consumer Packaged Goods (CPGs)? In this article, we will explore this intriguing concept and its implications for CPG leaders and technology teams aiming to enhance their digital strategies.
Understanding Headless Commerce and Its Advantages
Headless commerce refers to an eCommerce framework where the front end, or user interface, operates independently from the backend commerce functionalities. This decoupling allows businesses to modify their technology stack without disrupting the user experience on the front end. It’s akin to a headless content management system. The term was originally introduced by Dirk Hoerig in 2013, and while Gartner prefers the term composable commerce, both essentially describe the same innovative approach.
This architecture enables brands to encapsulate business logic within microservices deployed in the cloud. Consequently, organizations can create various user interfaces tailored for different platforms—be it a retail point of sale, an eCommerce site, or a mobile application. The benefits of headless commerce are numerous:
- Enhanced User Experience: Developers can utilize existing skills and content management investments to craft diverse user experiences.
- Customization and Personalization: Brands are free to choose the sales channels and frameworks that optimize consumer engagement.
- Scalability: CPGs can design consumer experiences that can be scaled globally.
- Flexibility for Experimentation: Developers can implement new ideas and features on the front end without affecting the backend, allowing for agile testing and learning.
Contrasting Traditional eCommerce with Headless Commerce
Traditional eCommerce systems are typically designed for a single channel, which complicates management as customer touchpoints increase. In contrast, headless commerce allows developers to update the front end without altering the backend, enabling a multitude of user interfaces tailored to varying sales goals and audiences. This flexibility is vital for brands striving to meet evolving customer expectations, especially in light of the dramatic shifts caused by the COVID-19 pandemic.
Moreover, content updates on headless platforms are reflected in near real-time, unlike traditional systems where such changes can take considerable time.
The Importance of Headless Commerce for CPGs
The urgency for CPG brands to adopt direct-to-consumer (DTC) channels has escalated in response to the growing trend of online shopping. Research from the CGT/RIS Executive Council highlights that:
- 43% of consumers tried new brands in 2020, an increase from 32% in 2019.
- 70% switched brands during the pandemic due to supply shortages or the inability to purchase directly.
- Over 57% of consumers aged 18-45 plan to continue increasing their online shopping habits.
- More than 50% of consumers prefer brands that actively engage with them through immersive technologies.
To capitalize on these trends, CPGs must ensure their DTC platforms are agile and capable of rapid adaptation, whether adding new sales channels, launching marketing campaigns, or personalizing customer experiences. Adopting a headless commerce strategy provides the digital flexibility essential for growth.
Supporting this notion, Gartner projects that by 2023, 50% of new commerce capabilities will be API-centric SaaS services, and organizations embracing a composable approach will outperform competitors in feature implementation speed.
AWS and Headless Commerce Solutions
At AWS, we take a collaborative approach to address the challenges faced by our CPG customers in developing robust DTC platforms. For instance, leveraging VTEX as a front-end-as-a-service solution in conjunction with a preferred content management system can enable rapid DTC deployment. Moreover, for CPGs looking to scale beyond basic platforms, we partner with various eCommerce engines, including Magento and commercetools.
Our AWS DTC solution framework encompasses unique, scalable services like personalization, fraud detection, and product fulfillment, which seamlessly integrate with the eCommerce platforms mentioned.
Real-World Application
In the UK, Co-op, a prominent food retailer, recognized the need to enhance its online presence and streamline customer convenience. By collaborating with Bringg and Naveo Commerce, Co-op successfully implemented a grocery eCommerce platform that facilitated rapid scaling and optimization across over 1,000 stores, offering a two-hour home delivery.
The integrated cloud solutions provided by Bringg and Naveo enabled Co-op to manage and automate multiple delivery models efficiently. Utilizing AWS services, Co-op benefitted from a flexible, microservices-based architecture, powering innovation and enhancing customer experience.
For those interested in further exploring the integration of technology and innovation in commerce, check out this excellent resource on YouTube.
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