6 Signs it's time for your e-commerce site to go headless

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Summary: Is going headless the right solution for your e-commerce site? It’s getting harder to make an exact determination every year as low-code solutions continue to advance and e-commerce providers like Shopify & BigCommerce improve the quality of their offerings. In this article, you’ll find some key signs that a headless solution might be the right investment for you. Here are the three big indicators to help you know if it's time to go headless:

  • You're reaching at least $10mm/year in revenue
  • You want to optimize for omnichannel experiences
  • You want an innovative customer experience and are ready to take on an investment

Is a headless solutions right for you?

A recent experience with a prospective client helped our team hone our thinking around who headless is right for and why clients should or should not consider it. The referenced experience culminated in us suggesting the individual should seek other areas to invest in and get back in touch with us in a year or two when they were in a better spot and a headless build would actually help their business. So what do we mean when we say “better spot,” and what would those triggers be to consider it?

There’s some nuance—and it’s getting harder to make an exact determination every year as low-code solutions continue to advance and e-commerce providers like Shopify & BigCommerce improve the quality of their offerings. There are still some general guidelines though, and we’ll discuss those here. 

What is a headless solution?

Before we dive in, let's define headless. Our friends at Nacelle explained it well, " It's an e-Commerce website architecture that consists of a separated frontend and backend." This means a headless e-commerce site is one where the website that people interact with is not built on the same platform used to process orders, manage inventory, and maintain the product catalog. It allows you to build a website free of the constraints imposed by the templates and layouts of a monolithic e-commerce platform and uses modern and highly performant web development languages to establish your brand’s presence on the internet. So when should you consider going headless?

01. When you’re drowning in tech debt

Need a quick refresher on tech debt? Technical debt—or tech debt—is using technology to complete a function that another tool is doing, could also do, or should be doing. It’s caused by solving one problem but creating three more. Tech debt consumes resources by duplicating efforts and costs. 

Like many businesses, you started out with a basic e-commerce site, probably hosted on Shopify or WooCommerce. As you needed capabilities, you installed apps from their respective app stores. Then you installed more. You made updates to pages and themes, and then created duplicates of those updates, and then created updates on those duplicates.

Now you’re at a point where you’re not sure what apps are running on your site, which version of the page is the right one to update—and your customers are complaining that things aren’t working right or are extremely slow.

Let’s talk about just one element there: site speed. It may not seem like a big deal, but it's important. Conversion rate drops by an average of 4.42% with each additional second of load time between seconds 0-5. That means if your page is taking longer than five seconds to load, you've lost A LOT of conversions. Since you’re probably doing $1mm/month in revenue, those lost conversions add up.

So how does headless help solve this problem? By itself, it doesn’t. Honestly, in the long term, you can run into the exact same problem. Why the conversation is relevant is because assuming your business has grown to the right size (see point #1) and you’re experiencing the challenges we’ve highlighted here—you’re thinking about how to tackle them. This space is one of the few where a full rebuild ends up being cheaper, almost certainly in the long term and very likely in the short term.

Tack on top of it the competent and experienced team you’re working with (right? right???) who will set you up for success by developing a tech roadmap that aligns with your business goals, follow engineering best practices, and create an experience that’s suited for the modern era of e-commerce and suddenly that rebuild seems like a very viable option.

02. When you can’t afford not to

Right off the bat: if you’re not planning to hit at least $10mm/year in revenue, headless is probably not right for you. This is primarily a cash flow concern from our perspective.

Bear with me—this might sound a little concerning upfront. When you go headless, you are taking full ownership of your customer’s experience with your web app. Building a good experience, backing it with reliable infrastructure, and then maintaining and updating that infrastructure and app as new technologies become available are now all individual line items—and they aren’t cheap. The simplest, best-case scenario for building a headless site off of an existing design with minimal extended functionality is around $150,000. If you tackle design work and have functionality that needs to be integrated (think product reviews, email landing pages, loyalty programs, etc.), that number can easily hit $300,000 or more. Then tack on the ongoing expenses. If you’re getting 10,000,000 pageviews/month, you can expect to see ~$10,000/month in infrastructure costs for your site alone. This is in addition to your e-commerce platform expenses (e.g. Shopify) and all your other business expenses.

Equally important to having solid infrastructure is having the right, experienced team in place to support it. Whether you hire in-house or work with an engineering firm, this adds cost too.

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So with all this expense—why do it? Because you’re getting to a point where you can’t afford not to. You’ve reached a scale where that 4.42% per-second change in conversion rate we talked about earlier doesn’t just cover the difference between the $1.50 hot dog & soda combo and an artisanal burger for $15. That 4.42% swing now covers the aforementioned infrastructure costs.

We like to say that "a 1% growth in revenue, 1% reduction in cost of goods sold (COGS), and 1% decrease in expenses can yield a 19% increase in net profit." Sadly, the inverse is also true, and we see it all the time with tech debt. A 1% decrease in revenue, 1% increase in COGS, and 1% increase in expenses can yield a 19% decrease in net profit.  

Control here matters, and controlling your customer’s online experience every step of the way gives you flexibility and confidence that you don’t get from an all-in-one solution. A day of downtime? Week-long turnaround to update a landing page or create a new one? All these things add up to small impacts in terms of overall sales, but now that your revenue is as high as it is, ends up being vastly more expensive than taking solid ownership of your tech stack.

03. When you’re ready to make an investment 

While the initial price tag of a headless website may seem large, when you take into account the ongoing customization required to maintain your existing e-commerce solution, the actual cost over time is pretty comparable.

Right now, the majority of websites lock you into themes. Themes are cheap upfront, but when you take a theme and build a store around it, tech debt starts to accumulate pretty quickly. You'll soon want to add a loyalty program and various plugins. You're not actually building a scalable architecture, you're creating tech debt that will impact your ability to convert as you clog up your site with decisions that aren't thought out and end up slowing your site down, leading to decreed conversions.

A headless solution allows retailers to build componentized software, which requires a higher investment upfront but results in a lower cost over time.

When it comes to the digital journey, we've become accustomed to thinking of pages because we think on screens. But, with headless, there's now an opportunity to hop off the page and start thinking of components.

04. When you want to create personalized customer experiences

A headless solution is a great way to improve personalization. Nacelle found that, "over 70% of customers say they expect companies to understand their unique needs and expectations… Headless commerce enables retailers to do just thatprovide a better customer experience. Using a decoupled frontend and backend allows merchants to be flexible, communicative, and consistent for their customers."

When it comes to the digital journey, we've become accustomed to thinking of pages because we think on screens. But, with headless, there's now an opportunity to hop off the page and start thinking of components.

This notion of components means that you can tailor each part of your site to speak to whoever is viewing it. It allows you to keep consistent branding in place (e.g. a hero image), but have the sub-content be more customer-specific. While you can deliver some element of this via apps in marketplace app stores, they rely very heavily on the scaffolding of their respective platforms, which means your site’s performance tanks. Doing it in a headless environment lets you use the best-in-breed solution every time, driving the best possible experience for your customers.

05. When you want to improve your omnichannel marketing capabilities

One of the problems retailers encounter with existing e-commerce solutions is the inevitable creation of siloed systems between platforms. This is difficult because it often impedes a retailer's ability to create quality omnichannel experiences for their customers. With the implementation of headless, "content isn't constrained to one format, enabling organizations to reuse that content between a variety of other systems, such as a digital asset management (DAM) platform or a product information management (PIM) system." This means that data can exist in multiple places without being duplicated, so retailers can track, measure, and create improved experiences for their customers.

06. When you want to optimize for multi-channel experiences

"More customers than ever use their mobile devices to shop. In fact, global m-commerce revenue is projected to reach 3.56 trillion by 2021, with an average year over year rate of over 33%," and with numbers like this, building for mobile-first just makes sense.

Additionally, while traditional solutions solve today's problems, headless solutions account for tomorrow and day-after-tomorrow solutions. Remember the days when you had to design a site that just worked on a desktop. Then mobile got added to the mix. And tablets. In today's world, sites now need to work on all sorts of devices from watches to smart home devices to VR experiences. As the number of devices that access your site continues to grow, a headless solution is able to quickly render the right experience for unique devices, where traditional solutions would chug along and provide a good enough result.

What now?

Okay, now that you know a little more about headless solutions, what's next? You may know that you've got exactly what you need with your existing site. You may be wondering if you should consider transitioning to headless, or you might know it's time to start your journey. We offer an Everyday Retail Blueprint, where we work alongside you to identify your business goals, perform a technical audit, and create a blueprint so you have a plan to meet those goals. We'll work alongside you to determine if a headless approach is the right solution for you and if not find the right approach for you.

This article was written in collaboration with Rachelle Cummings.

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