Retailer Reality Check: Are You Good at Digital Commerce?

Many large retailers make the costly assumption that since they have an e-commerce site where consumers can purchase most if not all of their products, they’re good at digital commerce. This may have been true 15 years ago, but it’s far from true today.

One thing this year has shown is that companies that can’t compete in digital commerce, can’t compete. According to Statista Digital Market Outlook – eCommerce Report 2020, segments including food, personal care, toys, hobby and DIY have benefitted the most from increased online spending during the COVID-19 pandemic.

While there have been some decreases in online shopping as some retailers have re-opened their physical doors, digital commerce will continue to play an essential role in retail competitiveness across segments.

Rate yourself, and be brutally honest

Surges in online demand that came out of the pandemic have exposed structural weaknesses of existing commerce systems leading to site crashes, outages, slowdowns and other unacceptable experiences. This McKinsey article talks about some of these impacts. On the flipside, there are some great examples of fast innovation during the pandemic with companies pivoting to offer services, products and promotions that they have never offered before. As Plato said, “necessity is the mother of invention.”

Today, if your digital commerce experience is anything less than five star, you risk losing business to the competition. It’s important to note that this is not an IT decision – although your IT department should be involved. It’s a business decision that will impact the future of your company.

Simply put, if you don’t have a modern commerce platform, you can’t compete. Don’t know if you have a modern commerce platform? Ask yourself these questions:

• Can your customers make purchases from you from multiple touchpoints?
• Can you adapt the digital commerce experience to different stages of the customer journey?
• Can you create unique customer experiences or does your experience look like other retailers?
• Can you release digital commerce functions in hours or days or does it take months?
• Was the last time you updated your digital commerce offerings in the last week, the last month, the last quarter or the last year?
• Is your commerce system in the cloud or just ON the cloud?
• Is it easy to make updates to your digital commerce offerings or does it take a lot of effort?

Two of the hallmarks of modern commerce platforms are flexibility and speed to roll out unique customer experiences and adapt ahead of market changes.

Headless commerce: When losing your head is good

To be competitive, you need to go headless. By going headless – or decoupling your frontend (user interface) from your backend system – it’s much easier and faster to improve your customer experiences because it doesn’t require you to make time-consuming and complex backend system changes.

In short, headless commerce is about freedom from monolithic platforms – the freedom to innovate when, where and how you want. Headless commerce is synonymous with agile commerce and modern commerce, and it’s the future of digital commerce.

The key benefits of going headless are listed here.

* It’s much easier to customize your digital commerce experience so that it matches and reflects your brand experience.

* It gives you the freedom to experiment for things such as creating test scenarios for products or marketing campaigns.

* It’s easy to add new platforms, technologies and customer touchpoints and to adapt quickly to evolving customer demands.

* You can better scale to accommodate site traffic; and you can make updates really, really fast.

Are you ready for headless commerce?

Larger enterprises are often thought of first as those most ready to go headless, however, there are examples of smaller innovative companies out there who have had huge success with headless commerce. Here are some general rules of thumb to determine if you might be ready for headless commerce.

• Definitely ready:
  • You are a large retailer with an existing e-commerce site
  • You have many touchpoints (omnichannel) and the ability to nimbly deploy to set up touchpoints across new markets and geographies
  • You use public cloud exclusively
  • You can handle unexpected spikes in traffic and transactions
  • You have great in-house tech competency
• Might be ready:
  • You have taken steps to move away from your legacy platform such as made parts of your online presence headless and are considering microservices
  • You are using cloud for new projects
  • You’re an innovator and early adopter willing to try new things and use cutting-edge technologies

My advice to retailers on the fence about headless is to remember that you’re not just selling products, you’re selling experiences. You don’t want your experiences to be decent or even just good. You want them to be great.

Kelly Goetsch is chief product officer at commercetools.