How Headless Ecommerce Impacts Logistics

How Headless Ecommerce Impacts Logistics
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Headless ecommerce is a growing trend in ecomm information architecture. It is important enough that anyone involved with ecommerce logistics management, operations, or IT should carefully monitor it.

Difference Between Traditional and Headless Ecommerce

A traditional ecommerce website has a back end tightly connected to the front end.

If you make changes to the front end (the part of the website visible to users), you should be aware of how it could affect back-end performance.

Even something as simple as changing the format of an inquiry submission form can be slow, difficult, or even altogether impossible to implement.

With headless ecommerce, the front end of the website is separated from the back end. When you make changes to the front end in this case, those changes are communicated to the back end through APIs (application programming interfaces).

With this new approach, you can alter an inquiry submission form over and over, in virtually any way or combination of ways, without impact on the back end.

This opens up the ability to safely make lightning-fast updates and perform complex user testing, among other things.

Armed with a headless ecommerce platform, etailers can continuously improve their website’s user experience, engagement, loyalty, and revenue generation metrics.

While that’s great, you stand to gain even more benefits from moving to a headless ecommerce approach.

In a headless environment, other types of digital front ends can interface with the website’s back end.

This can include a separate mobile website, digital kiosks, smartwatches, gaming consoles, smart refrigerator screens, or pretty much anywhere a consumer wants to access information, engage, or place an order.

This capability enables etailers to unify their marketing message while customizing it for optimal effect on any given platform. It also helps them reach more consumers, improve conversions, and consolidate data on the back end.

Headless Ecommerce: Response to Today’s Consumer Demands

Headless ecommerce is very important now, because of the way it supports evolving consumer preferences.

In large part driven by changes forced on consumers during COVID lockdowns, the entire retail industry has seen a surge in BOPIS (buy online, purchase in-store).

Brick-and-mortar retailers and restaurants, some without any web presence at all, suddenly found themselves in dire need of online ordering capabilities and in-store fulfillment.

No brick-and-mortar startup could prudently open its doors without being BOPIS-enabled.

And even brick-and-mortar retailers with sophisticated e-commerce operations saw a burst of BOPIS activity, since stores were often closed or only open during limited hours.

But it’s not just the pandemic and lockdowns causing a rise in BOPIS. Consider these other evolutions we are witnessing in real time:

  • Older consumers (forced into BOPIS during COVID), find they really like it and that it’s not nearly as intimidating as they expected.
  • BOPIS is extremely convenient in dense urban markets, where parcel shipments are expensive and sometimes slow.
  • Many consumers find it far easier to place online orders for everyday items, including groceries. It can save them a lot of time and physical exertion from having to physically go inside a store.
  • The Internet of Things (IoT) is here, and here to stay. With so many smart appliances and devices in their homes, consumers now have a dynamically expanding number of touchpoints for them to engage etailers.
  • Younger consumers, already comfortable with digital ordering, will have increased spending power as they age.

HOW BOPIS IMPACTS E-COMMERCE LOGISTICS

As BOPIS continues to grow, inventory will flow through the ecommerce delivery stream much differently.

These differences are likely to have an especially large impact on ecommerce fulfillment operations. This includes Third part logistics providers (3PLs) servicing midsize and large ecommerce operations.

An increase in BOPIS (and consumer deliveries made by brick-and-mortar stores) will come in part at the expense of parcel shipments moving directly from the warehouse to the consumer’s residence.

Implications of this shift include:

  • Instead of making one-off consumer deliveries, warehouses will be shipping consolidated shipments to brick-and-mortar retail outlets. This means greater demand for LTL (Less Than Truck Load) and possibly FTL (Full Truck Load) delivery capability. It also reduces leverage to negotiate favorable rates and terms from parcel shippers.
  • If LTL and FTL shipments become imperative, the industry will have to strike a balance between speed and efficiency that doesn’t come much into play with direct warehouse-to-consumer parcel shipments. Consumers, of course, will want to pick up everything right away. This means that businesses will have to make adjustments to both warehouse and in-store inventory and replenishment levels.
  • Fulfillment failures will carry an even greater cost. If a direct-to-consumer order arrives late, the customer will fume. But if the customer goes to the store and the item is not there, or two out of five items are not there, those fumes will be even hotter.
  • Training will become critical to equip logistics personnel, especially in-store personnel lacking logistical experience or expertise. They will need to be brought up to speed on things like inventory management, analysis, and emergency response, among other key topics.
  • Speaking of inventory management, etailers and retailers will need new or upgraded software platforms to manage a higher-volume and more complex environment for BOPIS orders. The good news on this front is that headless ecommerce should reduce or eliminate the need for multiple back-end shopping carts feeding into the inventory management system. The front ends of customer touchpoints will be different, but (ideally) order data from the mobile website, desktop website, and kiosk will be collected and stored in a single access point for fulfillment personnel to use.

Conclusion: The Direction is Clear, But With Unknowns

Logistics operations will have to watch unfolding events carefully.

While a rising tide of BOPIS business seems inevitable, many things remain uncertain including the pace of its growth, the industries it will most affect, and the geographic regions where it will expand.

Complicating matters further, nobody knows whether another pandemic lockdown will occur. If it does, how will it affect BOPIS and the ability of logistical operations to support it?

In conditions such as these, business owners would be rash to cancel all of their parcel shipping contracts and buy a fleet of semis.

But it would be equally rash to take a business-as-usual attitude and expect pandemic-driven consumer behaviors to disappear when this is all behind us.

Keep in mind: Consumer habits are hard to change, but they are even harder to change back.

ssional . After all, social media is all about impressions, when you really think about it.


Feature Image Credit: CC0, via Pixabay

Disclaimer: The views and opinions stated in this post are that of the author, and Return On Now may or may not agree with any or all of the commentary.

This guest post brought to you courtesy of Return On NowProfessional Austin SEO and PPC Services Company.

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Brad Shorr

Director of Content Strategy at Straight North
Brad Shorr is Director of Content Strategy at Straight North, a Chicago-based Internet marketing company that specializes in SEO. With decades of marketing, sales and management experience, Shorr has written for leading online publications including Forbes and Entrepreneur, and for the American Marketing Association.

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