The headless elephant in the room
Good storytellers never bury the lede.
This (first) newsletter will dive straight into a contrarian belief I’ve held about the future of commerce.
I don’t believe that “headless” in the way that it is being presented or used today is a good idea for 99% (if not more) of brands.
I truly believe that digital commerce itself will continue to evolve to a state where it is more fragmented and decentralised. So the concept of having a composable tech stack that empowers brands to remix how they operate aligns with my thesis for the future.
At the same time, I think that a headless frontend is likely the last thing brands should change in their tech stack. Here’s why I believe that:
Tech as a core competency
Building software is a vastly different skill set than selling physical goods. That delta also becomes bigger as you reach any level of expertise or excellence in either of those disciplines.
As a starting point, I don’t think that it is viable for 99% of brands to build those technical skills and teams as a core competency. So brands inevitably outsource this to consultants or agencies. And I’d proffer that the biggest winners of all the current rah-rah about headless have been the agencies that have been able to charge significant project fees to help brands make the switch. (And then we’re excluding the ongoing maintenance costs because you have now - in some cases at least - made it harder to make changes to your website.)
There is some irony in this sentiment because one of the most prevalent things I hear in the Shopify ecosystem about why it is better than a WordPress and WooCommerce combination is that the latter “requires loads of plugins” and you “always need a developer to update the website”. Part of the outcome of headless frontends is not dissimilar here.
(WordPress - with all of these limitations - has always been the superior CMS, and for those that want to go headless, WordPress has done a lot of work on its APIs to empower that move in recent years. And before you ask: I have no WP or Woo bias here. When my wife acquired an ecommerce business years ago, I switched her to Shopify.)
But our conversion rates are up.
Whenever I’ve spoken to others about their transition to headless, they tell me that their increased conversion rates easily justify the cost of going headless. Much of that increase in conversion rate is attributed to the new headless front being much faster.
I can’t argue with that. We all agree with the strong, inverse correlation between additional friction for a customer in the purchase journey and conversion rate. And speed or page load times would directly impact that.
I’m not entirely convinced about (and nobody has been able to correct or inform me) how that conversion rate change is measured. And how the increase was attributed to the headless platform now in place.
The only way to accurately measure this impact would be with a split-test run side-by-side (meaning you funnel half of your traffic to the legacy website and the other half to the headless one). This split-test would normalise for other variables.
Alternatively, one would at least duplicate the legacy website exactly, with the only change introduced being the underlying infrastructure. So new customers have the same experience, but pages now load faster.
This is not what seems to be happening because when you spend tens of thousands on a new headless implementation, you are also redesigning many other bits. The brand still got a great outcome, but it’s not necessarily due to going “headless”.
With that pragmatism, I read case studies like this from Builder.io and wonder what else the brand changed about its marketing campaigns to drive 10x more leads. I can buy that 10x’ing your leads could result in a 2x increase of revenue, though.
Here’s another case study about Cuts Clothing from Pack Digital. They claim a 21% increase in conversion rate and a 200% YoY increase in revenue. They do add, though, that “The Pack Customizer was perfect for their team to enable marketing strategies, test campaigns…” which at least acknowledges that the change in metrics was not just due to “going headless”.
Where does headless make sense?
In theory, headless only starts making sense when a brand has already tapped out on other optimisations they have already implemented. In a world where we’ve butchered the idea of what is a priority (the etymology of the word defines it as being singular, and that “priorities” does not exist), there are easier, lower risk and more cost-efficient optimisations to pursue.
I can wrap my head around the motivation of selling on different mediums and needing the kind of medium-specific frontend to support that. So a headless tech stack might make more sense there. I’d still try a good combination of responsive web design and a Tapcart installation first.
I believe that the marketing or growth teams need a way to iterate faster to test ideas or launch new campaigns. And removing an engineering-heavy process to do so is also consistent with my proposal that brands should not build tech skills as a core competency. Something like Shogun’s Page Builder or using Builder.io’s page building functionality on top of Shopify is already a huge improvement. Implementing those and then developing a culture and process for iterating and testing likely gets you the bulk of the benefit before you need to go completely headless.
The other part that intellectually tickles me is how to speed up an existing website. Solutions like Edgemesh are something that I’d keep my eye on. Nacelle (one of the early movers and well-funded incumbents in the headless space) seems to have adopted (at least partially) a similar approach. Incrementally improving what you already have is a business decision I will happily take almost every time.
What makes me cynical are the things that seem a little overhyped with obfuscated success results.
I look forward to the discourse that this perspective hopefully creates.
In the world of ecommerce enablement
Interesting bits of company and product news coming from the diverse world of ecommerce enablement.
- Gorgias announces a new $30M Series C. It is intriguing that Shopify co-led the round, which follows on their recent investment in Klaviyo (to make the latter the preferred or recommended email marketing automation provider for Shopify Plus merchants). Following Shopify’s other investments in Affirm, Yotpo, Loop and Tapcart, these aren’t such a surprise anymore, but it is accelerating. I don’t share the same “doom and gloom” perspective as many in the Shopify ecosystem. I do, however, remain curious about how this plays out. (One of my most popular posts on LinkedIn ever was this recent one about Klaviyo.)
- The new workflow feature from reviews provider, Junip, is a super-smart addition to their product. I’m biased because I’ve always believed that the ideal state for any email subscriber would be to have all of their email subscription preferences in a single place (this is why we combined email marketing automation with reviews at Conversio). Beyond that, it’s the kind of feature that showcases the inter-connectedness that the best brands now require. As they remix how they run their business, they are picking best-in-class tools for every function in their business. Adding various tools further fragments the data and the ultimate UI/UX. Features like this bring it back together.
- Breaking email marketer hearts all over the globe, the only thing in DTC that has a 100% open rate is the box in which you ship your products. ShipBob has announced a whole collection of new features to improve customer experience: from custom gift notes to custom boxes.
- PostPilot says it can “send profitable postcard campaigns as easily as email”. Their new MailMatch feature is a great way to speedily get brands onboarded and a positive ROI (they got Obvi live within 48 hours in a campaign that resulted in a 37x ROAS).
- Shopify has announced Collabs, a platform to connect brands with creators. As far as I can tell, this is the newly rebranded version of Dovetale that Shopify acquired a few months ago, which makes this a very quick post-acquisition turnaround on an acquired company. I'm also curious to see how brands adopt this alongside something like Bounty (who recently announced a $4.7M seed round). Albeit focused on TikTok only (for the moment), I can already imagine the overlap and duplication challenges in using both solutions.
- The Attribution Wars™️ (this Twitter thread is a fun rabbit hole to follow) got some new fuel in the tank as Northbeam announced a $15M Series A. Theirs follows a direct alternative, Triple Whale's $27M raise earlier this year. Another player in the space, Rockerbox, also announced a significant overhaul of their product this week. Rockerbox's "Channel Overlap" feature specifically caught my eye because there are so many tools in brands' tech stack that are trying to claim that they were responsible for a sale. Whether you use first-touch, last-touch or anything else, the real truth is probably that you need most of these tools and interactions to grow your business, which means understanding the overlap is helpful.
- Highbeam, a NeoBank for ecommerce, raised a $7M seed. Given the fundraising environment, this is a notable seed round and one that I can only imagine is fuelled by the current challenge that DTC brands face: cash management. There has been a proliferation of new funding options for DTC brands in recent years (from Clearco to Wayflyer to Settle to Dwight to Rho to Parker). Still, I always wonder whether brands/operators have their cash management under control when they are chaining or using multiple financing sources. As such, I'm curious about how Highbeam solves that.
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