Multichannel Success Podcast series

Season 2 Episode 3 - Headless Commerce - Transcript

#### David Worby

Hello and welcome to this week's episode in Season 2 of the Multi-Channel Success Podcast.

#### David Kohn

I'm David Kohn, and I have with me today David Worby from Prospero. Hello. And also a special guest, Vikram Saxena from Better Commerce. Hiya. The subject we're going to talk about today is a big one in e-commerce at present, and that is headless commerce. We're going to try and give you some ideas of what it delivers and whether or not and why you should be looking at it. I'm going to start by asking a pretty simple question to both David and Vikram, which is, what is headless commerce?

#### Vikram Saxena

So headless commerce, if you really ask me, look at it, comparing the analogy of a body. You've got a body and your face is pretty much the head, right? That's the presentation layer. And if you apply that same analogy to this world of systems and technology, it's basically encapsulating all your logic, all the intelligence in the body, and then segregating that head from that body part of it. How has that evolved? Technically, it's purely, every system is driven by APIs. That's the underlying foundation of this. But this has evolved in the form and shape, and why it has become such a big thing is because of the so many different form factors that have come up from the consumption perspective from a user. Now, your web browser used to be the only client at some point in time, but then it evolved into mobile web, then mobile apps, and now watch, smart watches, smart televisions. Now, these are all different heads. These are all different presentation layers for your backend systems, for all the intelligence that is sitting behind, your customer, your order product, all of that. Now, this is why this technology and this concept of headless has taken the world by storm pretty much, and has become so popular across the board. That, in basic definition, that is what headless is.

#### David Kohn

Thank you for that explanation. David, do you have anything to add or elucidate on this?

#### David Worby

Yeah, I think I'd just go back to maybe 10, 12, 15 years ago when we were all trying to start out our journeys, for some of us maybe a little bit longer ago than that. And there was no concept of headless then. It didn't really exist. It only really existed in more recent times. In those days, we kind of had monolith technology that was kind of sold to us that would meet most needs. And to some extent, it did. And to some extent, it didn't. And I think that what's happened is the world of headless has opened up, largely defined by the solution providers who provide those services, and therefore have vested interests in how they position the concept of headless. But I think, I don't know whether our listeners would agree, it's very complicated. It's been almost made too complicated. I like Vikram's description of just divorcing the kind of top from the body or the head from the body. But the ascent of microservices and the complexity of that has kind of brought the whole world of architecture into this conversation. But at its very basic, it's saying that the future of how your brand gets its products or its services to market and the channels it uses is going to change. We can't predict all of that. So why have many iterations of that thing? Why not separate the core competencies and the capabilities you need from the channel through which you tell those stories so that you can explore those different channels as they become available? Five years ago, no one thought that we're going to have intelligent fridges. We probably are going to have intelligent fridges and you wouldn't want a whole website for your intelligent fridge. It is a head that takes services from the body that provides it with its capabilities. That's the way I tend to think about it.

#### David Kohn

it. Thank you for that. You've given us both a pretty good idea of why you might consider headless as opposed to one of the other platforms that are available, but why don't you just go into that a bit more as to why you might as a customer be considering moving in this direction?

#### Vikram Saxena

So if you, like David said, you know, just to add on to David's point, 15 years ago, you probably wouldn't think about it. You were given a box with all the set of capabilities that you needed to deliver to your customer experiences and sell your products online. And you could do it quite easily. Now, what has happened is, now let's say you've got a promotion engine or your order or customer data. Taking an example of promotion engine, all your logic is now sitting in, which is intertwined between your presentation layer and your backend APIs and databases and all of that as well. When it is all intertwined in the presentation layer. Now, when you are going multi-channel, let's say you want to build a mobile app today, or you've got smart televisions, or you want to expose that same promotion engine to your stores as well, right? That is where it becomes a problem because store is one channel and that is one head of your business. Now, that is where it becomes very tricky. You don't want to be replicating that 25 different kinds of promotions across five different device or five different form factors or five different channels where you are selling or touching your customer points. And that is where encapsulating, extracting all of this logic and intelligence and encapsulating and exposing it as an API is more important because then you can build and focus on customer experiences specific to that channel. For example, smart fridges will have a different interface and will provide different capabilities compared to what your web browser does. Smart watches will give you a different interface and different capabilities compared to what your mobile app does. So you need to have control over the front end irrespective of the logic setting behind or the intelligence setting behind. And that's what this whole concept is about.

#### David Kohn

Well, that's interesting, I'm going to challenge you a little bit here and I'm going to say, I dare say, if I was talking to a Shopify or a BigCommerce or a Commerce Tools operation, they would tell me I can do all of this with them. So what's the real difference? What's the real advantage?

#### Vikram Saxena

See, the real advantage is if you look at it, you know, with Shopify, you end up, why would you need anything? The bigger question is, why do you need to go out of Shopify or a BigCommerce world, which already provides you majority of the capabilities from out of the box? And there is a huge ecosystem of plugins. Now, simple thing, maintaining your product data, just to tag your products in terms of, you know, based on classification or taxonomy, you have to have a plugin. Managing your images in Shopify, you need to have a plugin. So just like that, by the time you realize you've ended up with almost 15, 20 different plugins just to enrich your product content or product data. And then similar kind of concept happens on your front end for that Shopify as well. And of course you can build mobile apps on top of Shopify. Shopify has now come out with their own app called Shop, which is almost in the competitive world of Amazon, which is where they're going to unify customers across all Shopify brands as well. Now, does that give you enough capability to handle your customer experience or customize that? Should you need to? No, it doesn't. Because Shopify still controls the whole checkout. You barely can do anything about it. If you need to customize your customer experience, that's when Shopify will not help you. If you need more control and more flexibility over the speed that with which you're delivering the pages and content to your customers, that's where you will need it. Again, integrating with all the different channels, there is a plugin for every channel, but you don't want, again, 50 different plugins. You want to have more control. Either you want to be going to 20 different providers to provide one capability to your customers or you want to have more control in your hand. Depends entirely on your choice and your business appetite and your technology appetite.

#### David Worby

The way I tend to think of it from a retailer or a brand angle is that it appears as though almost every e-commerce provider under the sun is now making a grab for headless. They'll all tell you that there's an element of their capability that is headless and that may or may not be true, but it tells you that there's a direction of travel that even those steeped in the monolithic world are now talking a language of headless. That's important to reflect. But it's undeniably true that a direction towards headless or microservices or whatever you want to call them is more technically complicated. And for businesses who don't want to be technically proficient, that creates a bit of a problem. Shopify, BigCommerce, a load of the other providers provide fantastic solutions for retailers who don't want to be technically competent. The idea of a simple Shopify product with bolt-ons that are effectively payable through a credit card that can be put in and taken out very easily, very quickly, is fantastic for those who don't want to engage in the world of slightly more complex architectural technology. And therefore there are people possibly for whom this isn't the right direction of travel. I would argue that the businesses who think like that are in a declining percentage. And understanding how to use technology to drive your business is becoming more relevant. And therefore tailored solutions, tailor-made solutions around your capabilities, because of course no two businesses are the same, strikes me as a more aspirational thing than all aspiring to a box of tricks that may or may not be customizable for you.

#### David Kohn

Okay, well, that's great, because it leads on to my next question. And what you seem to be saying is that the more different channels you operate, the more different devices you operate through, the more likely it is that you want to look at headless. And I guess the second thing you're saying is that the more you want to tailor make your proposition, the more variety, variability for different customer types, then again, that's also pushing you towards headers. Would you say these are the sorts of customers who should be looking at this? Is there a threshold of size or turnover? Well, who should be looking at this?

#### David Worby

Well, I think everybody in the e-commerce world should have an understanding of the value that headless and microservices capability can bring. That doesn't mean that everybody should do it, but I think you have a responsibility to your organisation, your business, to understand the art of the possible here. Therefore, understanding it, I think, is kind of base camp. Clearly, what you're trying to do and how you want to do it will factor into the decisions you make about the kind of technology you want to adopt. I would suggest, I'll be interested in Vikram's point on this in a minute, that unless you have as a base camp a solid technically architected understanding of your future model, this probably isn't a world you want to spend too much time on. You don't need to have technical execution capability because there are lots of partners that can do that, but you need to have an understanding of how, at a strategic level, this jigsaw will look because without that, I think you are likely to find yourself in the camp, and there are many of them, of businesses who have been led by the nose a little bit into spending huge amounts of money and spending huge amounts of time and actually delivering very little, and in some cases, sadly, nothing along this journey. You can't do it without a very solid CIO understanding of the strategic value here and how this thing might work when it's all delivered.

#### David Kohn

Fantastic. Vikram, who do you think should be looking seriously at headless and whether it's right for them?

#### Vikram Saxena

To be honest, I think recently I had a conversation with a very successful retailer who's been doing 100 million upwards and they are running on Shopify. And his first question was, when do you think I would outgrow Shopify and when should I start looking at alternatives? I said, if revenue, your revenue should not be the benchmark to start looking for alternatives. The benchmark has to be around, are you able to deliver your customer experiences? Are you able to distinguish your brand from the competitors? And are you able to serve your customers without any hindrance or technological challenges? And are you able to advance that? And are you able to control and optimize the speed of your website and your apps as per the expectation of your customers? If those answers are yes, then you shouldn't even have to look at it. Otherwise, if those answers, any of these answers are no, then you need to start looking at the alternatives.

#### David Worby

I would just add another cyclical factor into there, which occurs within businesses periodically, and that is that we want to lower the cost of technology. And it obviously happens at times of crisis more often than not times of crisis, but on a cyclical basis most businesses ask themselves that question periodically. And if you were at the point of asking yourself that question, considering how headless could help you lower your total cost of ownership is probably a not unreasonable question to ask yourself. That doesn't mean necessarily that you would adopt it, but headless can, doesn't always, but it can lower your total cost of ownership. So if you're at that point in your journey, it's worth giving this a bit more of a consideration.

#### David Kohn

Yeah, I mean just to take in the issue of cost, Vikram, what do you find generally? Do you find that you're able to lower the total cost of ownership when you replace an existing system? Do you actually find it's much the same but you're able to do a lot more? Or do you find in some cases actually this is going to cost you more but you're going to get so much more out of it that it's worth it?

#### Vikram Saxena

If done right with all the factors setting in right, you could potentially lower your cost significantly. We have a customer who lowered their cost of operating technology cost by almost 30%, which is quite a significant reduction in their cost. They literally went from 15, 20 people in our team to zero engineering in our team. They're getting their front end done by a different agency. They use the headless platform. That has helped them streamline the whole operation really well. It provides them support 24-7. They don't have to worry about the staff turnover. They don't have to worry about recruitment cost and maintaining that technology team and constantly innovating the platform at their end. It has proven to reduce cost depending upon a few other factors as well. In terms of cost with the other alternatives where you think it's going to cost less, I've come across customers who started with a very minimal cost with Shopify, but by the end of it, the amount of money they were spending on plugins was way more than they would be spending on the overall total cost of ownership from a headless perspective. People don't realize, but adding 500 here, 500 there, 500 there and 300 there, it just adds up so much, but they don't look at the total cost of ownership. Very few people start looking at it from a total cost of ownership perspective. They just look at that component and say, okay, it's just 350 quid a month. Let's just go for it. And that way, the costs just escalate without them even realizing it.

#### David Worby

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#### David Kohn

One of the things David touched on, I'm interested in your perspective on this, Vikram, is that it requires a degree of technical competence to move in this direction. Although you've just said you were effectively able to replace an entire in-house team. I'm interested in what you think are the organizational capabilities and competencies that a prospective customer of headless might need. Do they need to be particularly technical or actually not?

#### Vikram Saxena

They don't necessarily have to know, you know, deeper into the woods, but what they do need to have is have a bit of understanding of technology, you know, how this whole thing fits together and more from a strategic perspective. Plus, they need to understand how it is going to change their whole organizational flow as well. You know, their workflow, how is it all going to work through? They need to understand. They can't just hand it off, you know, it's not, it's a collaborative effort. You can't, it's not something that you will just contract it out and it's all going to happen on its own. Nothing's going to happen on its own. So certain level of understanding has to be there to make it successful. With zero understanding, you should not even think of going headless.

#### David Worby

Yeah, I think we'll hear a little bit later from Vikram about how his business can help you or other businesses on the whole executional side of delivering a headless project. But I just want to restate something from before. I think that my advice to anyone listening would be that unless you have a fairly robust technical understanding, there are so many players out there with significant costs that you could be led down a path that isn't necessarily always in your best interests. And sadly, you know, Prospero worked with two clients in the last 18 months, one of which was a positive story and one of which was not a positive story. And the not positive story of a fashion business based in Manchester that effectively almost went to the wall as a result of a two year project that was five years in and hadn't delivered anything and spent the thick end of £10 million. And you do that as a consequence of engaging with players whose interests are not aligned to yours and who pursue a vision of pure technology rather than business enabled technology that led them into a place where they just couldn't deliver anything. And they'd spent all the money times two and effectively had no way out. So I think there are always going to be players like that in the marketplace. Don't get me wrong, it's not unique to Headless, but the reality here is because it is technically more complex, you need to have a voice that is as strong as those providers of services and you need to have a clear understanding of what you're trying to deliver, which sounds very easy to say, but it's sometimes very difficult to articulate.

#### David Kohn

Yeah, that's a great insight there. I think certainly from my own perspective, one of the things that always put me off looking at Headless with any degree of seriousness was we were such a small team and I had heard the horror stories. Now, I guess, Vikram, this gives you a chance to tell us a little bit about BetterCommerce and how you think your business, your product is going to help businesses resolve these Will I ever get it built? Will it be so complicated I can't manage it? Will it actually do what I want it to do? How does BetterCommerce go about resolving these sorts of questions?

#### Vikram Saxena

And before I start on that, just to add on the horror story that David mentioned, if anybody's telling you that your headless transition is going to take you more than 12 months, you should just stop the project. Anything going beyond 12 months is not worth doing it, especially irrespective of your business size, to be honest. We've done implementations for very large businesses within six months, and for medium to small businesses, we typically do it within three to four months. And anything going beyond eight months is literally an exception, where, okay, it's too much complexity is involved, too many stakeholders within the business, even then it should not be crossing eight months in terms of headless implementation. But I've heard horror stories where the project has been going on for 18 months, 24 months. I mean, the initial planning itself is for 18 months. That's a dreaded story, and it is not going to end up well, because by the end of 18 months or 24 months, your business would have changed, your customer expectations would have changed, your market would have changed, and it's just going to kill the project. By the time you've come to the market, you're already obsolete. And then you again set up a project for 24 months. So you are in a vicious cycle of trying to upgrade, but always behind the market. So that's the first thing I would say.

#### David Kohn

Just to pick that up, and before you go on to explain a bit more about Better Commerce, one of the things I've experienced in e-commerce projects is there's a massive focus on the front end, and there's loads of stakeholders, the CEO, the CFO, Uncle Tom Copley and all.

#### David Worby

video.

#### David Kohn

Would I be right in saying that with Headless, you can get on with building the engine, if you like, that almost the front end, which is the bit that absorbs the time, the management and tension, and normally creates the delays, actually is a little easier? It is much easier.

#### Vikram Saxena

It is much easier. It is absolutely much easier. It gives you much more flexibility because once your back-end engine is all sitting there, your front-end team can work in parallel. They're not heavily dependent upon, once they finish this, then we will do that. So based on the digital contracts, the API contracts, they can start working on the front-end and build that experience much more in advance. And typically, no matter how many iterations or how much complexity is there in the front-end, if it is going way beyond four to five months, I think there is something wrong in the process.

#### David Worby

I think that's a really good point but I think it also gets wrapped up in this notion of kind of iterative agility and we want to be constantly on the move which is kind of at odds with a project that has a start and a finish date and I know this example I gave you in Manchester was yes okay it's taken us three years and we haven't delivered anything but actually we keep changing the plan which is fine but no one ever creates any value so I think you kind of have to have a project that starts and finishes and from that point the notion of iterative agility can then start to constantly evolve and constantly move and constantly kind of improve your output but I think it's a real problem for businesses because they don't have a vision of what they're actually trying to achieve because it's capital A agile.

#### David Kohn

Fantastic, that's another great observation. So again, it's coming back to Vikram here. Let's say we've heard the horror stories, what does Better Commerce do? And you've said you've got a quick development process, you've said it's agile, but talk us through a little bit more about how you operate and what you do. Of course, so what we do...

#### Vikram Saxena

Of course, so what we do is, so the idea of why did we make better commerce, to be honest, coming into the first place? And of course, there are the players like the Shopify at the lower end, where the people getting people started onto that world and getting them on boarded really quick with a team based site, you get up and running. And then there is the other spectrum, you know, like the salesforce commerce or the hybrids of the world, right, which and commerce tools, of course. So the idea for us was that we wanted to offer the enterprise grade capability, which typically you would get in a salesforce or hybrids or commerce tools, but at a price of a mid market business rather than, you know, burning holes in your pocket and a million dollar projects running several years. We wanted to offer that capability, enterprise grade security, scalability at a mid market price and with not just affordability, the idea was to deliver that value in a short life cycle where, you know, people can go online really quick. And we wanted to offer a balance of both the worlds. So instead of going through monolithic, there's one world which is completely monolithic, you know, the old world, then there is the complete world of headless and then there is this world of platforms, which is completely dependent on thriving upon the plugin space. So we wanted to offer the best of these two, three worlds. This is where we built. So we have certain capabilities built into the platform. So you won't need 30 plugins from Shopify or the likes of it, and you will still get the flexibility of headless, everything getting API driven, and you have the capability of composable modules. So let's say you want to use a different order management system, we integrate with different order management systems, we integrate with different PIMs, and we integrate with different analytics systems. At the same time, we offer these capabilities as separate modules, independent modules that you can decide and choose. You want to use this one or you want another one in the market.

#### David Kohn

So that's what we do. Great. So I'm going to put my hat on here of the sceptical retailer and I'm going to say, Vikram, I've heard this all before, yeah? I've heard everybody tell me it's going to take me three months, I'm going to be able to do everything I want to do, we're an amazing team. What is it really that you think better comes to the table? Is it technical competence? Is it a business understanding? Is it the relationships that you have with microservice providers? What is it really that's going to make me believe you?

#### Vikram Saxena

So what would make you believe is our delivery that we've done so far? I would suggest, you know, I would preferably suggest to get you to talk to our customers. In terms of our capabilities, it's our technology that we have built, which is very robust, very flexible, plus our business knowledge. And I've been in the distribution industry for more than 20 years now. Build systems of the scale of Amazon, you know, for the likes of giant Fortune 50 companies, which run even today. And those systems were built completely API driven almost 15 years ago, when headless was an alien concept. So I've been building these systems and I understand the nuances of the distribution and retail businesses quite well. And so is the team across the board as well.

#### David Worby

Great, David. I loved something you said about the fact that better commerce is both an enterprise capability, because you've got all that stuff built in, but you're also kind of positioning it almost as a, don't take this the wrong way, as kind of starter kit for headless. So your first journey into that must create a tension of capability that's enterprise, but actually positioning it. Tell me a bit about that. How does that play out with your clients?

#### Vikram Saxena

So the way we work that is, in some cases, of course, customers do have a bit of an appetite and they want to explore and future-proof their business because Headless is all about future-proofing your business, being able to serve different channels as your business grows and as the market evolves. So what we do is we allow the customers to select their path and tailor-make their path depending upon their appetite and their capabilities as well. Now, that could be they say, okay, we are not very keen to go full-blown. We don't want to take those chances and we've had this experience with one customer. They said, okay, let's start with PIM. So we'll start with the PIM, help them manage their product data, structure, build their product models. And most of the businesses, they've got tons of product data, but it's all fragmented across different spreadsheets, across different people, across different divisions in the business. And there is not a single person who can bring it all together. So we help them wade through all of that noise, bring their product data together. And let's say we will start on the journey of getting the PIM set up in their organization. Once that is done, we generally tend to build a lot of trust with them and then they would come to us and they say, you know, we are now looking to upgrade a website and go completely headless. Would you be able to help us? And we've had a customer like this and they're just about to due to go live fairly soon.

#### David Worby

That's interesting because what I think you're describing there is in fact the go-to market element is one element of the body rather than the headless bit. But am I also right in thinking that if someone is wedded to their existing pin, let's say

#### David Kohn

Yeah.

#### David Worby

they have Pemberley or something, that isn't a reason not

#### Vikram Saxena

to talk to you. Absolutely, so our whole EECOM engine will potentially talk to whatever PIM you may already have invested in. If you're happy with that, our whole EECOM engine will talk to that, our analytics engine will talk to that.

#### David Worby

Because that's the bit I like, because David, when you and I were doing this way back in the day, the notion of being able to stitch together individual components that we were broadly comfortable with to produce a kind of best of breed ecosystem was something I think we longed for and to some extent we were able to do it. But this sounds like it's going to be able to do it much easier.

#### David Kohn

And I think, again, just to pick that up, is the idea that you have to throw everything away in order to start something like this is terrifying for many customers. So, let's come to our final question. We've talked a lot about it. I think, hopefully, we've elucidated for many people why you might want to look at this. But I guess if I'm sitting here today and I'm thinking, should I be looking at this? What are the questions I should be asking myself? What would make me look at this more seriously?

#### David Worby

I think I've got three bits of advice I would pass on. The first is that this is a trend that's here to stay, and if you are involved in any way in digital commerce, you need to have at the very least an entry-level understanding of the value that could be brought to you from a headless world. That's the first thing. The second is there are cyclical questions that businesses ask themselves, whether it's, you know, I want to lower my costs, as we said earlier, or whether I want to achieve a customer experience that I can't do today, or I want to future-proof my business for things that I can't see today, but with some confidence we can predict are going to happen. So, you know, as I said before, the fridge example. No one thought we were going to have intelligent fridges a few years ago, but now we do. So if you want to think about those things, I think you probably have a responsibility to understand what headless can do for you, and I think in doing that you've got two choices. One, you can either do your research, you can ask around, you can ask people who've done it, you can talk to people like Vikram or me, or you can engage in a proper piece of work from truly third-party independent consultants who can give you a perspective. Prospero is one of them. There are many more out there who can give you a view as to whether or not this is something you should plough a little bit of budget into to see whether or not the value that you could get out of it is worth the investment. Thank you.

#### David Kohn

Thank you. And Vikram, what do you think you would say to people listening, why should they come and talk to you?

#### Vikram Saxena

Like, I mean, I would just add on to David's point. If you are looking to, you know, explore different channels for your business, if you want to future- proof your business and you have potentially, you know, reducing your total cost of ownership, the biggest thing is what I've seen is a lot of times people don't review their total cost of ownership on a regular basis. You know, they just pay off their credit card bills because they can at this stage afford to, but they don't realize the amount of savings that it can bring to their business. Plus, improve their customer experiences. What are the new evolving models in terms of, you know, customer engagement? Because customer, I believe the future is around the hybrid of Omnichannel is the future. PurePlay Online will have a glass ceiling. PurePlay Offline is also going to struggle, but a good mixture of the two is going to make a huge difference. And those are the customers' businesses which should definitely be looking at headless right away, if they're not looking at it. PurePlay Online is a great way to offer a unified customer experience across all channels, especially store, online, mobile app, smartwatch, or whatever channels that may come in next five years.

#### David Worby

Because if you think about the number of channels that we could have five years from now, you know, you could have, businesses could have a dozen channels.

#### Vikram Saxena

virtual reality is the next one that's going to pop up you know fairly soon i suspect the moment the hardware devices get a little more advanced and a little lighter i think that is going to come out as a huge

#### David Worby

channel as well and the notion of having to manage each of those exactly so that the customer experience is consistent yes I think is beyond absolutely people so a service that kind of divorces that channel exactly from the core capability clearly has as we know has some value

#### David Kohn

Guys, thank you very much. I've certainly found it an education myself. I hope our listeners have learned something from today and it's given them some food for thought. I'd like to thank you, David. No problem. Thank you. And you, Vikram. Thank you so much. And most of all, I'd like to thank you, the listeners. Thank you.