Storefronts & Marketplaces: What you need to know

Headless architecture refers to a software design approach where the front-end presentation layer of an application is decoupled from the back-end content management system (CMS) or business logic.

In a headless architecture, the front-end, also known as the "head," is responsible for rendering and displaying the user interface (UI), while the back-end, or the "body," focuses on managing data and business processes.

Headless commerce front- and back-end systems work as a team and, designed correctly, can independently handle specialized tasks without taxing the other.

In a headless commerce system, the path to purchase can include an array of internet-enabled buyer touchpoints such as social media platforms, e-commerce websites, mobile apps, online marketplaces — and now emerging touchpoints such as augmented reality (AR), Internet of Things (loT) devices, vehicle-mount computers, smart clothing, and intelligent implant devices.

In traditional e-commerce platforms, (like Shopify, Magento, and BigCommerce) front- and back-end systems are tightly coupled. In headless ecommerce platforms, the back end is left without its “head” or frontend (presentation layer), where the term “headless” is derived.

A decoupled setup effectively allows an e-commerce business to build digital storefronts, or front-end public-facing systems that work like a digital concierge to guide shoppers through the experience. Meanwhile, the storefronts connect to the same back-end system that operates tools for the sales management, website security, data processes, multimedia features, and business logic.

Headless architectures also falls under the umbrella of microservices, small applications that allow marketplaces to choose the right tech providers for each business function without changing the rest of the system.

Application Programming Interfaces (APIs) allow these connections to communicate with existing enterprise ecosystems on the back-end. With their help, you can create various customer touchpoints and whenever they engage with your store, information about that interaction is transmitted to your backend systems through an API call.

With headless architecture, you can leverage multiple backend systems such as:

• Content management system (CMS)
• Progressive web app (PWA)
• Customer relationship management (CRM)
• Digital experience platform (DXP)

A headless e-commerce setup (part of a bigger approach called composable commerce) becomes an omnichannel experience. Businesses’ marketing and merchandizing teams can create consistent and fully customized customer-facing digital storefronts and deliver memorable experiences across channels without disturbing the back-end infrastructure.

Headless commerce solutions empower business-to-business (B2B) and business-to-customer (B2C) merchants to offer rich and relevant experiences from homepage to checkout.

More businesses are gravitating toward a headless system. According to a recent State of Commerce report, 77% of organizations who use headless architecture state that it gives them greater agility, allowing for optimization to their front-end experiences more quickly, meet various customer expectations, and improve conversion rates.

Headless architecture embeds commerce functionality into an entire touchpoint network.

Eight advantages to headless commerce:

1. Flexibility: By implementing such a “best-of-breed” tech stack, businesses can create unique and personalized user experiences across different devices and platforms. The frontend can be developed and updated independently without impacting the underlying e-commerce functionality.
2. Scalability: As the business expands, companies won’t have to start all over with a new commerce platform. By decoupling the frontend from the backend you have independent scaling of both systems. This makes it easier to handle increased traffic and user demands.
3. Omnichannel capabilities: Businesses can leverage APIs to integrate their e-commerce platform with various touchpoints. This can enable consistent customer experiences across multiple channels, such as websites, mobile apps, voice interfaces, and IoT devices.
4. Faster development cycles: The separation between front- and back-end development allows development teams to work concurrently, reducing dependencies and accelerating the overall development process, which, in turn, lowers IT developers' burden.
5. Performance: Headless approach supports quick and seamless connections between services and APIs, which can result in faster-loading pages. Slow load times can equal lost business.
6. Customization: With headless commerce offering rich merchandizing, customization, and design opportunities, businesses can have more control over the user interface and tailor it to their specific branding and design requirements.
   
   The frontend of a headless system can be built using technologies such as JavaScript frameworks (React, Angular, Vue.js), mobile app development tools (React Native, Flutter), or even custom-built solutions.
7. Third-party integrations: A headless setup makes it easier to integrate with third-party services, plugins, and tools, such as marketing automation platforms, analytics tools, or inventory management systems.
8. Internationalization: Retailers with a global presence can expand into new territories and rapidly integrate preferred payment methods, currency, and languages.

Just like brick-and-mortar stores, the look and feel of storefronts differ from seller to seller. Or at least, it should differ, in order for sellers to avoid being perceived by its target market as a generic commodity — which often leads to a terrifying race to the bottom.

However, despite the importance of brand differentiation, most storefronts are typically built with a roster of standard back-end elements, whether they are offering cosmetics, guided tours, stoneware, and the list goes on. We list these elements below, note their purpose, and share insights on how they impact customer experience:

Element: Product catalog
Purpose: Used to showcase products and services. Typically includes description, graphics (images, videos, renderings, etc.), prices, and other key details that matter to customers.
Insights: A large-scale usability study found that 10% of e-commerce websites (which include standalone storefronts as well as online marketplaces) have inaccurate or incomplete product descriptions, which lead many customers to abandon the entire website.

Element: User accounts
Purpose: Customers create user accounts that capture relevant personal information (e.g., name and shipping address), along with their order history and payment details. Some storefronts allow customers to bypass the user account process and checkout as a guest.
Insights: Research has identified four key barriers that block some customers from creating user accounts, and which sellers are urged to proactively neutralize: they worry that they will be barraged by marketing emails; they are skeptical about providing personal information; they feel that the account creation process takes too long; and, they do not plan on purchasing from the store again.

Element: Payment gateway
Purpose: Enables customers to make online payments, or take advantage of increasingly-popular buy now pay later (BNPL) options.
Insights: Where strategic and practical, sellers should seriously consider offering BNPL as an option. The value of BNPL transactions around the world is projected to surge $450 billion USD between 2021 and 2026, which represents a 5-year increase of nearly 400%. What’s more, 89% of BNPL customers say that they are satisfied with the option, and 85% would recommend this option to others.

Element: Order management
Purpose: Used for order tracking, inventory management, and shipping integration to support order routing and fulfillment.
Insights: Sellers who focus on presentation and price, but overlook shipping duration, may find themselves falling behind their competition: 32% of customers worldwide have abandoned an online shopping purchase because they felt that the estimated shipping time was too long.

Element: Analytics and reporting
Purpose: Used to track store metrics, product performance, customer behavior, and predict future growth.
Insights: An effective way to generate a complete picture of performance is by calculating revenue per visit (RPV). This involves taking the revenue that a website generates during a given period of time, and diving it by the number of unique visitors during that same period.

Element: Customer support
Purpose: Used to facilitate efficient communication with customers before and after purchase.
Insights: Sellers should explore adding live chat as a customer support option: 73% of customers who used live chat to access customer service said that they were happy with the experience. This was higher than those who used email (61%) and phone (44%).

Element: Reviews and ratings
Purpose: Used to provide social proof, and ultimately increase confidence in a seller’s offerings, reputation, and policies.
Insights: What sellers say about their own offerings and company is certainly important, but what others say about them can be even more influential: 97% customers read online reviews before making a purchase, and 49% of customers trust online recommendations from strangers as much as personal recommendations from friends and family.

Element: Shopping cart
Purpose: Enables customers to choose and add products or services that they wish to purchase, and also provides an updated cost calculation.
Insights: Shopping cart abandonment rates hover around 70 percent, and are responsible for $18 billion USD a year in lost sales. Some effective tactics for reducing cart abandonment include: sending well-timed emails (which have a 45% open rate); ad retargeting; A/B testing to optimize pages and campaigns; and, tracking what products are abandoned along with where abandonment occurs on the buyer’s journey.

Element: Search and filters
Purpose: Enables customers to search for certain products, or use filters to refine general search based on factors such as category, price range, rating, etc.
Insights: Sellers with effective onsite search functionality enjoy 50% higher sales rates vs. those with ineffective onsite search (i.e., broken, slow, etc.). In addition, the conversion rate for customers who use onsite search is nearly 2x higher vs. customers who do not use onsite search. A growing number of storefronts are also using AI to increase search relevance and improve customer experience. AI delivers hyper-relevant results based on search queries that are too unstructured and complex for basic search algorithms to handle.

Sitecore OrderCloud is a cloud-based, headless, API-first ecommerce platform that empowers businesses to customize ordering experiences across their customers’ preferred devices, sales channels, and apps.