We’re blogging here in NYC today as brand and tech experts from around the world come together to discuss what is arguably 2019’s most important retail technology topic – headless commerce. This event is being sponsored by Mobify and partners Amplience, commercetools, and EPAM, and there are at least 20 brands represented today.
The topic is so salient because every retailer is looking to differentiate based on customer experience, be it in-store or online. In digital, the business impact can clearly be profitable growth. But the technology roadmap is changing as retailers look to decouple front-end and backend software to future-proof their shopper experiences. What they’re after is the promise of agility, as well as savings in time and maintenance associated with this vastly different style of ecommerce architecture.
Why Analysts are Bullish on Headless – And Why You Should Be Too
Speaker: Joe Cicman, Senior Analyst, Forrester
Joe Cicman from Forrester is up first to explain what the problem is we’re trying to solve, how it relates to microservices, and how vendors are coming together to address it.
It’s about customer expectations, he says. “Every time customers are exposed to an improved shopping experience, their shopping expectations are reset.” If a customer has a different experience each time they shop it becomes a siloed experience and we know customers abandon siloed experiences.
Ecommerce vendors tried to solve the problem of providing a good digital experience, but they were were awful at it. They just didn’t have it in their DNA. They could scale and integrate but they became the stewards of digital experience and failed at it. The problem was exacerbated as the numbers of digital shoppers grew, even as it became clear that digital experience is the key to business growth. IT teams were falling all over themselves as well, struggling to update the front-end to keep up with customers. Disconnected customer experiences drop revenue, and as more customers abandon sites, the more this cycle continues.
The result is that, “The commerce market has been turned on its head because nothing vendors had in market worked anymore. This is the main characteristic of a market ripe for disruption,” says Cicman.
So how do we solve the problem?
First, we can’t have a single vendor, rather, we need APIs to connect multiple solutions in what we call “the API economy.”
Second, we need a new digital experience architecture and this is key – the transaction box on the architecture diagram is the ecommerce stuff – and it’s subordinate to digital experience. That is the key and what is different here.
Third, the headless architecture is touchpoint-agnostic. It must support any touchpoint.
Initially, headless has paid off for the digitally mature, but the laggards have had pain. And the question is, how to solve that pain?
To start, digital maturity has to involve making customer experience a priority. You have to become an organization that knows how to innovate. Digital beginners are not all ready for transformation, though. Some have tried to find a middle ground, for example by customizing their digital platforms. Some are waiting for an API-first version to come out.
Many are stuck with “the monolith,” that is, an ecommerce system that has everything inside it. The problem with the monolith is of course, upgrading and the pain associated with keeping up with customer digital experiences. There is also the cost.
How do you know you have a monolith? You can use this sniff test: If your vendor’s inventory update can save you a million a year but the cost to upgrade will cost you a million as well, you may have a monolith.
Enter microservices. APIs plus microservices lets you move faster because APIs are what everything speaks. It’s said that new touchpoints are coming out every couple of months. This means that vendors can move faster, and your developers can move faster. How this work is very interesting because you can test things. So if you have a hunch you can find out very quickly if a commerce experience will work. The result is that everyone moves faster. “You can make the right experience, and make that experience right.”
It’s exciting because any new touchpoint that comes on the scene, you can have a presence there. That can be phone apps, watch apps, PWAs – which are crushing it on engagement. It could be kiosks, or marketplaces where you list your stuff on Amazon, and Pinterest has visual search now so this will be a touchpoint. Suppliers are making headless part of their B2B systems as well, for example it will be part of Wal-mart ordering platforms, so we are going to see machine-to-machine ordering and ERP systems are going to become another digital touchpoint.
In the headless world, who do you buy from? Well, as we learned, it can’t be a single vendor. So content management systems, digital experience platforms, ecommerce platforms, front-end platforms, and SIs are joining forces to complete their solutions. You are not tied to a single vendor. You can buy these solutions and use them as long as you want to transform your organization.
In summary, headless was intended to solve the problem of disconnected digital experiences.
APIs ensure your digital experience is always current and market leaders are making it work.
Why is this analyst so bullish on headless ecommerce? 1. Because it is bigger than just commerce and includes B2B; 2. This is how you get the agility you need – and there is no other way.
Fireside Chat: Tales From The Front Lines
Speakers: Patrick Grissinger, Senior Product Manager, Under Armour, Igor Faletski, CEO, Mobify, & Michael Jones, CRO, Amplience
Part II, “Tales from the Front Lines,” is a three-person panel with Patrick Grissinger of Under Armour, Igor Faletski from Mobify, and Michael Jones from Amplience. In this Q&A, we got to hear from someone whose organization is right in the midst of a transition to headless. Grissinger sums up the business challenge:
“We’re in nearly 30 markets with thousands of stores around the world that includes fitness centers, content, commerce, and retail. How do we make it come together in a cohesive consumer journey? We can imagine it. With headless we hope to make it a reality.”
When asked how do you define headless to business folks he says, “I explain it through the customers’ eyes. I walk an executive through our current digital experience and then show them what it could look like. “
This way they can see how “Bringing the customer to the forefront of the digital experience is what’s important. Our journey with our progressive web app was about showing the impact across the consumer journey, as well as the revenue impact.”
When asked if people understand the need for headless architecture he adds, “We all agree that the pain is there and now we need to solve it in a lightweight and lean way.” To neatly summarize, “Having a nine month waterfall project to solve these problems is the old way.”
Grissinger says one of the impacts of this move to a new architecture is that all parts of the organization are aligning around go to market – digital products, physical products, IT, commerce, marketing – and it’s exciting to see the business align this way.
We know that we don’t tell great stories in our commerce experience, so we need to fix that, says Grissinger. It aligns people around why we are building our architecture. “A lot of the work we are doing is tying the digital experience to the marketing strategy for a product. But it doesn’t happen overnight. It takes time, but knowing who you are doing this for, not leading with the technology but who is the consumer, matters most.”
Grissinger says one of the biggest changes we’ve had is that we now have product managers for digital – no one went to school for that. They are able to highlight that this is not a purely cost saving endeavor but it tied to an outcome. The core discipline of a really good digital product manager is a muscle we are building inside Under Armour. And the reason it is important is because no one had focused on that digital consumer and drove the organization to that place. Now these digital product managers are driving the people writing the code for the transactions, and the people designing the buttons based on this mission.
When asked is the headless architecture making it easier to do this now he answered we are very much in the midst of this transformation, and we are just now figuring this out. But the core of what we do is around testing and learning and headless allows us to do that, he says.
Under Armour has been one of the first brands to have a progressive web app from Mobify. Grissinger explains why: “UA’s brand has been in growth mode and so we wanted to address the broadest possible market which is why we decided to do a PWA.” The question then became how do we tune it from and experience and speed perspective to get the most out of it? With Under Armour’s PWA, it was all about iteration. Being able to make changes based on feedback from data allowed the team to continually tune the experience. “We tuned the whole time, for speed, to get performance metrics, for issues around how customers enter the journey.”
The entire consumer journey from the moment they enter is objectively better, it’s faster, and they can move through the journey much quicker and more seamlessly. It’s almost painless to navigate from product pages to categories. We have double digit revenue growth, 3x return rate, 65% less pre-bounce.
In summary, Grissinger says, we have lots more people getting to the site, adding more things to cart and buying more things.
Grissinger says that as for headless, “The next phase is about scale, can we do this in all 28 markets?”
Towards a Headless Digital Experience: Challenges and Opportunities
Speakers: Milton Pappas, EVP & CDO, RTW Retailwinds and James Brooke, CEO, Amplience
We’re excited to have Milton Pappas, EVP/Chief Digital Officer, RTW Retailwinds (New York & Company, Fashion To Figure, uncommon sense, Happy X Nature) join James Brooke, CEO of Amplience, for a discussion on Mr. Pappas long and successful career in ecommerce and digital, including with New York & Co, Nine West Group, Toys“R”Us, and Redcats USA, as well as a board member of Shop.org, the digital division of the National Retail Federation. Milton Pappas has been in ecommerce since 2006. Mr. Brooke since 1994. So we have many decades of expertise from which to learn.
What is really happening with headless is that we are driving the transition as the world is moving from sites to an app-like experiences – whether it is PWAs, native, or something else.
Says Pappas, “In my current organization, we are totally looking at mobile-first as a very high percentage of our traffic is on mobile. Conversion rate has been stronger on our app so now the question is how do we replicate that experience without having an app?
Fact: almost everyone here has the Starbucks app. But that is not the norm, nor will it be. Apps are great. Everyone wants to move fast, and with 5G coming up in some regions, a larger percent of sales will be on the phone. But how do we get that without an app?
The truth is, mobile conversion is never going to be the same as desktop because mobile is a browsing device. Shoppers today are doing pricing comparisons while in your stores, that’s why we are connecting mobile to the omnichannel experience.
What is really driving conversion is navigation. How does she find the product, add to the basket, and checkout using different payment options?
Then there is site performance. On top of that, there’s making the site more sticky to drive buyers back with pretty images and content.
Mobile is a headwind to conversion, not the entire force. Many retailers have “new arrivals” categories for example, clearance, deal of the day. Those pages are deep with a lot of skus. We have new ones every two to three weeks. This is a broad cross category. For example, we have landing pages so I want to send people there, but it becomes a challenge striking a balance in what path we take a consumer down as she comes to the site.
We must solve the challenge of, do I have the best navigation and filtering to send her to the best converting pages?”
Headless is going to transform many of the structural elements of the experience to drive conversions, says Brooke.
No one has patience now for a slow site. but there is also the size of your images, navigation, and thinking about how Google is going to index you higher if you have good load time, says Pappas. So you see there are lots of incentives for us to do a better job.
Also important, very personalized experiences require a LOT more content. Everyone has different ideas of personalization, Pappas says.
The challenge is that it’s an entire tech stack ecosystem consideration, says Pappas.
“No more is it about the platform provider but the ecosystem of players. It may seem really complex but if you don’t have that modern infrastructure to identify that a customer – no matter where she comes from – is making a purchase in your store and then goes to your website you don’t have ‘it.’ ”
“Legacy technology limits innovation. Having worked for a number of retailers I can say that. The POS system is a legacy system, for example, that is like a forgotten stepchild. You need full end-to-end integration even with a system like POS that is not capable of doing much personalization.”
“Warby Parker is a great example of a full integration POS to ecommerce integrated system that shows it can be done. They know, for example, when I come to a store that I left something in my cart.”
A second challenge is, everyone knows they do not have enough content. There are still lots of silos. It’s a pretty inefficient process that takes a long time, in part because there is not enough content. These are all challenges still to be addressed.
Another challenge to having a modern tech stack and agility is that you have to make sure that all these systems are communicating with one another.
Pappas says, for example, when you’re on my site I want to make sure when you go out to Instagram if I extend my experience there. The growth on Instagram is explosive, but i need to be able to keep up with this challenge.
Pappas says it takes time, “We’re working toward moving to an API connected architecture because you can’t do personalization that’s not isolated without it.”
Pappas says a challenge is explaining to non-technologists why headless is important.
“Not a lot of folks in the retail industry can spell API. But an API-oriented architecture is about the ultimate experience we want for our customer, thats the north star of where we want to be.”
So how all parts of the architecture communicate is important for that outcome.
The complexity of the architecture is an issue, and so is ownership. It’s super complex so we’re committed to mapping out the customer journey, not just the tech stack. Customers come to our site in many ways so what that experience is initially, and on return, etc. is important. Then, we can go back and look at each tech stack provider and how you can connect the dots. “Actually connecting the ecosystem so it all works is just brand new to everyone.”
As to what happens when you take the head off your ecommerce system, Brooke says there is this new app-like experience, it could be React or a PWA, but 40% of our customers are in the process of implementing a single page app. It’s hard work. Mobify takes away the complexity of managing that app, making sure its delivered quickly with an application delivery network, making sure it performs fast, and integrates with other elements.
Then the orchestration of that experience requires apps to be managed in a way that is simple. This way, you buy your APIs from the best set of vendors you can. That is the new architecture, says Brooke.
Pappas says headless is definitely in the cards for his company. “We are revisiting our entire stack. This is where everyone is going. The question is, is it a big bang or is there another logical way to do it?” Headless means different things to different people. So there is definitely organizational considerations to consider as it’s a whole different world. How the teams work together changes, it’s all changing. But it is definitely happening.
We wrapped up with a quick Q&A panel with Milton Pappas, EVP & CDO, RTW Retailwinds; James Brooke, CEO, Amplience; Igor Faletski, CEO, Mobify, Kelly Goetsch, CPO, commercetools, Pavel Veller, CTO Digital Engagement Practices, EPAM.
Question: How do you sell this type of ecommerce strategy inside the organization?
Pappas from New York & Co: I can count on one hand, or maybe two, the retailers who are really killing it. Nike is one. They have said that digital is driving the growth engine. Thinking about the website as the way to facilitate sales is key. Two, you have to map out how you get there. What level of growth are you committing to and what’s going to get us there cost wise? Take out the tech stack and show how each chunk fits into the end strategy. Show me the money, because the digitally-native brands are doing really well. Fundamentally, they are super focused on driving new customers and sales. Focus on the end game and the roadmap to get there.
Question: What is the key to headless success?
Faletski from Mobify: This is a team effort to get everything working together
Goetsch from commercetools: This is transformation and it’s a longer term process.
Question: Why is headless now?
Faletski from Mobify. There is no other way to leverage commerce to reach touchpoints that are new and can drive business.
Goetsch from commercetools: Modern SaaS is all API-based now.
Pavel from EPAM: Yes, this has happened because the technologies have matured. We have faster browsers, networks, etc. and so vendors make it possible for you to have and API ecosystem.
Brooke from Amplience: You have to do something on the front-end now, you can’t wait another year.
Question: Where is the starting point for a brand that is just getting going on headless?
Faletski from Mobify: The pain points are different for different companies so the beauty is that you can start adopting headless at the front-end because that’s visible, but you can start at the CMS, too. You can start where it’s causing the most pain.