How to face the e-commerce challenges of today – without a head

Research companies like Morgan Stanley, Statista and McKinsey forecast further growth of up to 25%, despite an overall slowing of economic activity. But to continue thriving and staying ahead of the growth curve, organisations need to tick a growing number of checkboxes. From marketing and technology to data and creativity, there are key challenges to address to keep the e-commerce growth going.

Last year, global retail e-commerce sales reached $4.9 trillion and are expected to exceed $7.4 trillion by 2025. This year, B2B e-commerce adds $14.9 trillion on top of that. While many factors have contributed to this continued digital growth, the two leading factors are the emerging digital presence of companies and the accelerated consumers’ digital maturity. The way how companies sell and how people shop has changed permanently. However, this doesn’t mean that the e-commerce pie is shared equally.

The e-commerce landscape is getting more competitive as more companies pivot to launch or optimise their digital commerce operations. In the race to gain consumers’ attention, the cost of advertising has increased and the return on ad spend (ROAS) has reduced. CPMs on Facebook rose 47% in 2021 when compared to 2020, and Google, YouTube, TikTok and Snapchat are demonstrating a dramatic increase in advertising costs year-over-year. Smaller players with less financial means find they cannot rely as heavily on advertising as before. Additionally, advertising data is becoming less valuable as privacy concerns lead to stronger regulations and restrictions on third-party data worldwide.

The best way to stand out from the crowd is by creating exceptional digital experiences that inspire and attract consumers:

• 54% of shoppers enjoy browsing and discovering online more than in-store.
• 74% of consumers are likely to buy based on experience alone, according to a recent Forbes study on the value of CX.
• 32% of customers would consider breaking up with a favourite brand after only one poor customer experience.

The standard for a good customer experience is rising every year. So it is no small wonder that customer experience was named a CEO priority for all respondents in an IBM survey of 3000 CEOs across 50 countries and 26 industries. The big challenge to realising a differentiated customer experience is having the right technology architecture in place.

The growing dependency on technology has led the marketing department to collaborate closely with the IT department. From data collection to personalisation, hypertargeting to focusing on high-value customers, technology enables it all. The IT department has seen its responsibilities grow to support a growing number of systems, including CMS, CRM, data warehouses and now CX platforms. The traditional gatekeeper role of the IT department has evolved to become a business driver. Every company is turning into a technology company, because, as Forbes puts it, “Today, no company can make, deliver or market its product efficiently without technology.”

Historically, the leading choice for numerous organisations has been ‘monolithic’ platforms that contain a general solution for their most frequent marketing and e-commerce needs. These suites provide an all-in-one answer that addresses prevailing challenges with out-of-the-box solutions that ‘fit all’. The monolithic architecture is also associated with various cons, such as slow go-to-market timelines, inflexibility and lack of agility, complexity and scaling issues. In response to these concerns, a new approach arose that decoupled the front end and the back end.

With all its pros, the headless architecture also comes with cons. You need to build what you want from scratch, which requires vision and ongoing development. This also means that marketing becomes IT dependent for making content changes and running campaigns. The biggest pitfall of going headless is doing it blindly and losing your head.

In 2016, there was only one headless vendor in the Gartner Magic Quadrant for Digital Commerce. The Magic Quadrant for 2021 now features eight vendors offering headless solutions. The adoption of headless is booming globally, and headless is often called the future of e-commerce. According to research by Vanson Bourne in 2021:

• 64% of enterprise organisations are now using a headless approach, a nearly 25% increase from 2019.
• 92% of respondents state that implementing headless technologies makes it easier to deliver a consistent content experience.
• 92% of respondents recognise digital experiences as essential to their organisation’s success.

Still, only 2% of all websites worldwide use headless, mostly enterprises. Why are midlevel and SMBses not embracing headless with the same fervour?