In the previous post, we talked about headless commerce, an approach to ecommerce development that decouples the backend of an ecommerce site from the front end. In other words, all the backend tasks – order processing, customer records, EPR integration – are separated from the elements that customers engage with, including content, images, product configurators and, critically, the shopping cart. What you’re left with is an ecommerce platform without a “head.”

What’s interesting about headless commerce is that it sets the stage for brands to sell anywhere in the digital universe. It’s a topic well worth exploring for brands, as whole generations of shoppers show signs that they favor non-traditional commerce channels, and your ability to reach and engage these consumers may hinge on how well you can meet them in the places where they make purchasing decisions.

Commerce is everywhere

When ecommerce first emerged in the early 1990’s, site developers sought to mimic the offline experience online, under the belief that such a replication would guide shoppers through the process. Online shopping was new, and many consumers were wary of entering their credit card into a strange new thing called a website. Mimicking the in-store experience felt fundamentally familiar, and gave consumers the confidence to try something new.

But the younger, digitally native Millennial and Gen Z generations don’t need that kind of analogy to the offline world. Moreover, they’ve adopted e-wallets and other tools that streamline shopping, allowing them to purchase a product with a click of a button. Navigating to an online retailer, going through the checkout process, and entering a credit card number and shipping address all feels so yesterday.

This combination of emerging attitudes and seamless technology has allowed innovative brands to sell anywhere, win new customers, and in some cases, leap ahead of their competition. Let’s look at some examples.

Social commerce & shoppable livestreaming

While social commerce isn’t exactly a new trend, 2020 saw an explosion of social commerce sales. And it’s not likely to slow down in 2021. In the US alone, social commerce sales this year will top $39 billion. Globally the numbers are even more eye popping, reaching $589 billion. According to Grand View Research, social commerce will grow at a compound annual growth rate (CAGR) 28.4% over the next 6 years

Social media platforms are keen to promote this trend. Over the past year many platforms formed partnerships with ecommerce vendors to enable tighter integration of the two disciplines (e.g. Shopify and Snapchat announced an initiative to make it easier for retailers to create ads and set-up campaigns via the Shopify platform).

Meanwhile, Chinese consumers are enthralled with a newer form of social selling, known as shoppable livestreaming. Platforms such as ShopShops and Pendoo have entered the market to support social livestreaming, and have provided social media influencers with an economic shot in the arm. It’s only a matter of time before shoppable livestreaming becomes a global phenomenon.

How does it work? ShopShops calls its influencers “hosts,” who present items from “iconic and trendy stores, sample sales and flea markets.” Holding up pieces from a sample sales or flea market automatically creates a sense of urgency within the customer: buy this now because it will never be available again.

News sites

Headless commerce is also paving the way for news organizations to get serious about ecommerce. Every news site has an ecommerce store, of course, but those sites are hardly a major source of revenue for them. That’s about to change, because headless commerce allows new sites to integrate shopping and content consumption and take advantage of impulse sales.

Take NBCUniversal which released its NBCUniversal checkout early last year. This new feature will incorporate commerce into the reading and viewing experience across its sites. Specifically, it allows the readers of articles and viewers of videos on NBCUniversal properties to click on a featured product, bring up the listing from a partner merchant and make the purchase. Users never need to leave the article they’re reading.

NBCUniversal isn’t alone in the field, as many major news organizations are fusing content consumption with commerce. But one of the things that is significant about NBC is the sheer number of properties the publisher owns, and the size of the audience who will be exposed to this new mode of shopping.

Within a few years I wouldn’t be surprised to see shoppable content become so common that consumers consider it a normal way to shop – and feel put upon if an ad or an article won’t let them purchase an item that’s right there in front of them.

Gaming commerce

Online games have always engaged in commerce, selling users tools and in-game currency to move up a level or acquire more power. In other words, online games already have the user’s payment information stored, and the consumer is already comfortable with spending money there.

Last spring, rapper Travis Scott performed a concert in the video game Fortnite (those who missed it can join the other 13 million viewers who watched it on YouTube). Given the scale and reach of audiences like Travis’, I can’t imagine that gaming companies will sit on the sidelines much longer. The technology exists to support in-game purchases, and with headless commerce, brands could offer up, say, the trendy sneakers or clothing worn by characters within the games to players with a purchase cycle that can be completed in a single click.

The future: Disappearing lines

These trends are obliterating the line between digital shopping and digital experiences. Soon watching TV, playing a game, keeping up with friends on social media may all become seamless commerce opportunities.

What’s interesting about these developments from a marketer’s point of view is that they collapse advertising and purchasing into a single interaction. A customer sees a product in her Instagram feed, video game or livestreamed fashion sale and makes an impulse purchase.

Headless commerce will usher in a world of new opportunities.

One can hardly pick up an industry journal without seeing an article on headless commerce. But what is it, and how will it affect the brand manager’s top goal of acquiring new customers?

First, let’s be clear about one thing: headless commerce deserves all the hype it’s getting because it is fuelling – and will continue to fuel – a lot of innovation in commerce, marketing and advertising.

For instance, let’s say I’ve had my eye on a winter coat but yet to take the plunge of buying it.  The brand can target me with a promotional offer on my Instagram feed, enabling me to buy it directly from the ad, bypassing a visit to its site and the whole shopping cart/checkout process. That’s a lot of obstacles eliminated!

The ability to extend your ecommerce storefront to any digital channel is just one of the many benefits of headless commerce.

So what does headless commerce mean exactly? Headless commerce decouples the backend of an ecommerce site from the front end, meaning the order processing, customer records, EPR integration are separated from the customer-facing elements, including content, images, product configurators and so on. What you’re left with is an ecommerce platform without a “head.”

APIs connect the frontend to the backend, sending requests from the presentation layer (i.e. the frontend) to the application. So in my example, when I click the “Buy Now” button on the ad in my Instagram feed, the presentation layer of the apparel company’s headless ecommerce system sends an API call to the application layer to process the order. The application layer then sends another API call to the application layer to show me the status of my order.

Benefits of Headless Commerce

• Painless omnichannel marketing. Unlike a traditional ecommerce store, headless commerce allows you to sell in any channel, even those that have yet to emerge. You can include the ability to buy seamlessly any place where a consumer will see your content: social media, ads, blogs, SMS messages, and so on. And it’s not just selling; you can invite anyone to sign up for your email or SMS newsletter and offers.
• Speed to market. It’s much easier to implement customer-facing site enhancements when the frontend is decoupled from the backend because you don’t need to roll out the update across your entire system, just one part of the system.
• Flexibility. As new channels emerge, your developers can add new channels to your existing platform. You won’t need to replatform your entire store just to service customers in a new channel.
• Save in development costs. If your store runs on a complex ecommerce platform, like Magento Commerce, headless commerce can offer lower development costs, as it’s much faster for a developer to write, implement, test and deploy site enhancements.
• Marketing focus commerce. In traditional ecommerce, the technology typically drives how you engage your customers, but with headless commerce your marketing team can make those decisions based on how and where customers discover your brand.
• Personalization deployed anywhere. Headless commerce allows you to personalize content in any channel, as my winter coat example shows. Going further, the brand can show me a hat and scarf set that goes with the coat when I’m on Facebook, or show me a spring rain coat a few months down the road, which I can buy with a single click.

Obviously this is a simplified explanation of headless commerce, but it shows why, as a digital marketing agency, we are super excited about the world of opportunities it offers our clients. Headless commerce is powering a new range of engagement possibilities – such as social commerce, that resonates with the younger generations. It’s the best way to ensure your ecommerce store and brand can keep up with consumers as they adopt new channels and shopping habits.

We’ll help you move into the future, get in touch.

If you’re a manufacturer, these past 12 months have been quite unnerving. Some 25,000 retail outlets closed in the US in 2020 due to COVID, and many other iconic brands are predicted to shutter in the coming months as the challenges of the pandemic and faltering economy linger on. If you relied on these retailers to get your products into the hands of your customers you’re likely thinking: what are my options?

It might be time to consider launching a channel in which you sell your products directly to your customers, better known as a DTC channel. In fact, it’s a strategy that many manufacturers, CPG brands and food companies now consider business imperatives.

These companies aren’t simply jumping on the latest fad; they’re meeting customers where they are. Seeking safe, contactless shopping, consumers have flocked to ecommerce, so much so demand for grocery delivery enabled Instacart to turn a profit for the first time ever. According to a McKinsey Report, COVID-19 has condensed ten years worth of anticipated growth in ecommerce into just 90 days.

There are plenty of opportunities and challenges to launching a DTC channel. Let’s start with the opportunities:

• Customers favor eCommerce. Last July Digital Commerce 360 reported that online sales leapt by an impressive 76%. If you want to continue selling to consumers, you’ll need to offer your products in their preferred shopping channels, and increasingly that’s digital. More importantly, consumers have spent the pandemic forming new shopping habits out of necessity. But necessity almost always gives way to habit. If your brand isn’t on the consumer’s radar, getting their attention sometime in the future could be difficult, if not impossible.
• Direct customer relationships. When you sell directly to customers you have the opportunity to develop one-to-one relationships with them, and to avail yourself of the many benefits such relationships offer: product feedback, surveys, loyalty and referral programs, to name a few. You’ll also begin to build a pool of first-party data that will no doubt morph into one of your most important strategic assets.
• First-party data. Picking up on the previous bullet, GDPR and CCPA have left marketers scrambling for cookie-free ways to target new audiences and build their upper funnel. First-party data offers a bright spot for privacy-compliant marketing. You can use your customer data to send out product announcements, personalize your web experiences to the shopper, request permission to engage in marketing initiatives with your partners, and even model new prospects to target.
• Customer journey insight. When you sell your products via third-party retailers, they — not you — own the customer relationship. They’re also the ones who get insight into customer journeys, and can understand how and why consumers favor one brand over another. A direct-to-consumer channel will allow you to capture that insight, use it to engage better with prospects, and be more responsive to their needs. It will also provide a roadmap for building your upper funnel by knowing where and how to apply marketing resources.
• Better margins. Third-party retailers and wholesalers may have provided you with a lot of benefits, but they came at a price. When you sell directly to consumers, the 40% markup stays on your balance sheet.
• Less noise. Marketplaces like Amazon and Walmart are excellent vehicles for getting your products in front of huge audiences, but it also means competition is stiff. These marketplaces are optimized to close sales, and so they present the consumer with multiple choices, even when the consumer arrives on your product page via a costly paid search campaign. A DTC channel lets you eliminate that competition.

There are many compelling reasons to launch a DTC channel, but it is, by no means, an uncomplicated endeavor.

Challenges to launching DTC channel

If your company has typically sold to retailers and wholesalers in bulk, you’ll probably need to restructure quite a bit of your internal operations in order to service end customers. You’ll also need new pricing, pick, pack-and-ship models to get your products out the door.

And there’s a pretty good chance that you’ll need to do substantial work to your website to support one-to-one sales. Unlike B2B sites which are meant to make placing bulk orders a quick and easy task for established business customers, a consumer-facing site will need to promote product discovery, provide an abundance of fresh content, and be optimized towards a new set of metrics such time on site, page views and repeat visits.

Creating a consumer website will require you to identify the customer journey and optimize towards it — a task that may have been left to your wholesalers and retail partners. If you’re like many manufacturers, you may have a fragmented view of the customer journey, and will need to engage some analysis to help you understand how consumers engage with your brand.

Finally, you’ll need to build new integrations from your DTC ecommerce site to your order management, Enterprise Resource Planning and other backend systems so that you can provide site visitors with updated and accurate inventory availability, shipping information, process orders, and ensure that key account data, such as their shipping address, payment information and other preferences, inform their shopping experience.

How Paragon can help

If a DTC channel makes good business sense to your brands/products but the prospect of building and maintaining an entire ad operations team from the ground up feels daunting, don’t fret. Paragon Services has a history of delivering world class omnichannel digital campaigns, audience management, reporting and analytics all designed to maximize DTC channel ROI.

We’ll guide you through all aspects you need to develop DTC campaigns, audience management, reporting and analytics.

We’ll help you move into the future, get in touch.