Headless Commerce + Blockchain = Game-Changing Innovation

Headless has changed the way online businesses manage their front-end presence. Its customizability has become a synonym for innovation in e-commerce. In the meantime, little has been proposed for the future of back-end commerce. Could blockchain technology power back-end innovation?

Innovation Theory

Combining the reviews by Kalbach (2012) and Kylliäinen (2019) of Christensen’s innovation theory — a must-read for entrepreneurs and intrapreneurs — we get a clear framework for navigating a company’s innovative positioning. Based on their analyses, we can categorize an innovation based on the technology a business uses and its target market segments. Here’s our updated 2x2 innovation matrix:

• Incremental innovations correspond to minor changes to existing products and services, such as new features or experience improvements. These innovations are meant as a response to customer feedback in an attempt to attract higher-paying customers. An example would be optimizing an online store for mobile shopping.
• Sustaining or Breakthrough innovations are technological advancements that place a product or service way ahead of competitors. It is often the output of R&D projects that help a business keep its position (e.g., in terms of market share). Headless architecture is an example of a breakthrough improvement that reinvented front-end possibilities for e-commerce. In this case, companies that already focus on customer experience and shopping personalization would not change their market approach. Instead, they would invest in building content variations (from a single source of truth) that engage the most demanding customers in their target audience.

Source: Viima.

• Disruptive innovations, as originally proposed by Christensen, start with the offering of a solution to underserved or neglected market segments. As these products or services gain traction, mainstream audiences begin considering the cost-effectiveness of such innovations, and exponential growth tends to follow. Blockchain technology is an example of an emerging disruption that has earned the support of small communities of early adopters looking for new ways to power transactions quickly and without intermediaries. As the media, companies, and research institutions began to accept and design blockchain-based solutions, the ideas became mainstream. For example, Visa now accepts crypto payments. Besides finances, blockchain application has disrupted processes in logistics, ID management, traceability of materials, and much more.

Source: ARK Invest.

• Game-changing innovation transforms markets and societies. This innovative process has a radical impact on how people interact with each other and the organizations they trust. It changes the fabric of operational systems and sets the bar higher for competitors. The “magic” behind this type of innovative change is that it combines the two dimensions of the matrix. First, it generates market impact through strategic positioning and persuasive value propositions. Second, it promotes technological progress, which can be hard to replicate as a competitive advantage. Following the logic of the matrix, an example of a game-changer would be:

Headless Architecture + Blockchain Applications

While headless allows for customizable experiences on the branded side of stores (what customers see and interact with), making it easier for companies to convert demanding leads, blockchain can improve the security and speed of back-end processes (what powers transactions and operations). This combo can be a creative, future-proof strategy for companies that want to invest in robust technology without compromising their chances of reshaping the market to their benefit (and their customers’).

What Headless Technology Can Do For You

Most e-commerce SaaS providers already support the implementation of headless architecture features through category-specific APIs to structure the navigation and content available for customers across operational platforms and devices. Their assistance usually covers:

• Catalog Data
• Search and Navigation
• Customer Module and Registration
• Product Information
• Cart and Checkout Functionality
• Order Details.

How Blockchain Technology Can Complement It

Blockchain can complement a sustaining headless innovation strategy with a disruptive take on market needs, such as building trust and verifying the legitimacy of products and reviews. Examples of applications could focus on:

• Security and Fraud Prevention, keeping a shared, decentralized record of transactions, processes, and digital identities as a single source of truth for verification purposes,
• Inventory Management, allowing manufacturers, suppliers, distribution centers, warehouses, and retailers to connect and communicate more effectively through a permanent record of transactions (avoiding shortage/overstocking costs, and other repercussions of the bullwhip effect),
• Accessible Receipts and Warranties, ending borrowers’ need to keep paper receipts and making warranty data and proof of ownership quick to retrieve for sellers,
• Loyalty Programs, tracing the origin of discount coupons and providing real-time analytics on their performance,
• Supply Chain Monitoring, guaranteeing the traceability of materials/ingredients and the access authorized personnel only throughout the supply chain, and
• Authentic Reviews, verifying online reviews quickly and safely to guarantee that prospects have access to legitimate information from customers.

What’s Next?

• The Upstate Interactive team has prepared a 5-question checklist to help you assess if headless commerce fits your business identity and goals. You may view it and download it here (no forms required).
• You may also keep learning about the benefits of a headless commerce architecture. Check out our latest article for the ‘Solve It With Software’ series on headless here.