As we enter into 2023, it’s time to start thinking about how to improve and enhance loyalty programs with headless architecture. Replatforming to headless architecture has many benefits such as improved loyalty programs that increase customer retention rates. Monolithic platforms have many drawbacks such as challenging updates, slow implementation times, a close working relationship between front and back-end developers, sluggish performance, and more. Headless architecture eliminates these issues to encourage scalability, innovation, ease of implementation, and quickly go-to-market.
In this blog post, we will discuss the many benefits of headless architecture and how it can improve your loyalty program in 2023.
What is Headless Architecture?
Headless architecture is a decoupled structure that separates its presentation layer from the backend. The backend is divided between the business, content, and data services. The front and back-end components connect via application programming interfaces (APIs).
Get detailed insights on headless architecture in our blog post “Headless Ecommerce Platforms: A Comprehensive Guide”
Benefits of Headless Architecture
Headless architecture is quickly becoming the default for modern retail businesses. Utilizing headless architecture allows businesses to focus on a customer-centric approach, including improved loyalty programs. Retailers are able to quickly implement changes and adapt to trends that encourage customer loyalty. Decoupled headless architecture gives organizations flexibility that allows them to maintain a competitive advantage. Here are some benefits of headless architecture:
Quickly Adopt New Changes
In a blog by Start-Up Bonsai, a business solution provider, they stated 80% of customers are likely to convert when ecommerce businesses provide them with a personalized experience.
As explained earlier, in headless architecture the front is separate from the backend. This allows the marketing and sales teams to make adjustments to the user interface without having to make changes in the core ecommerce functionality. Customers can also view the customizations faster and experience improved personalization on their buying journey. Overall, headless architecture saves time implementing new changes so that customers can have improved online experiences.
Freedom to Build and Develop
Implementing headless architecture gives developers the freedom to build and develop a tech stack that caters to their abilities and preferences. Developers can create a frontend stack of their choice.
Each team can work with different tools without any collaboration hassle. In the end, the components are all connected by an API. This makes the management of modern features easy.
Get to know more about APIs in our blog post “What is API-Driven Commerce and Its Benefits for your Business”.
Lower Development Costs
According to the findings of WP Engine, a WordPress management platform, more than 64% of enterprise organizations are using the headless approach. Ecommerce organizations future-proof themselves by implementing headless architecture from the beginning of their business.
Ecommerce businesses that use headless architecture models save on development costs as their business scales. Developers can quickly implement the straightforward and easy-to-test headless architecture development process. This saves effort, time, and money.
Reduced Storage Space
A report by Tech Jury predicts that data centers may consume 20% of the world’s power supply by 2025.
Headless architecture allows businesses to unify their data ecosystem. They can place all their data on a cloud instead of separate data centers. This reduces common data management issues.
Why are Large Companies Switching to Headless Architecture?
Enterprise retail businesses such as Starbucks, Target, and United Airlines have implemented headless architecture to allow their ecommerce sites to have a competitive edge against others in their industries.
The changes allowed them to future-proof their businesses, as consumers watch them constantly innovate and experiment with new ideas. Headless architecture has allowed them to improve their loyalty programs to retain customers at higher rates and capture new audiences.
Headless Loyalty Programs
Customers no longer want to use plastic loyalty cards to get discounts. These cards are easy to misplace and many customers forget to use them when making a purchase. Scanning barcodes and remembering to collect points is becoming a thing of the past. Customers want a digital loyalty program that matches other modern technology in their daily lives.
Customers expect their loyalty programs to provide them with a seamless experience. They want to see their rewards and points unified across their connected devices. Traditional loyalty programs are not accessible across all touchpoints. Headless loyalty is the perfect solution.
What is Headless Loyalty?
Headless loyalty is loyalty software that follows the headless architecture. The backend is decoupled from the front end, and connected via APIs. This gives the marketing team the ability to test user interface changes and create loyalty program experiences that are unified across all channels. The developers work on different ways to store the data they receive from the user interaction, refine it, and implement different functionalities from it such as personalized product suggestions.
Microservices within Headless Loyalty Programs
Headless loyalty programs allow different functionalities of a program to become an individual microservice. There is an interdependency between the microservices but none of the microservices entirely depend on the configuration of a single microservice. Here are some common functionalities that act as a single microservice in headless loyalty software:
- Maintaining Customers Points
- Maintaining Customer Purchasing History
- Implementing the Loyalty Rules to Calculate Points
- Assigning Rewards and Value to Gained Points
- Generating Reconciliation and Settlement Reports
Learn more about microservices in our blog post “How can Microservices Fuel your Ecommerce Platform?”.
Benefits of Headless Architecture that Guarantee Loyalty
One of the biggest benefits of headless architecture that makes loyalty programs successful is the ability to alter one microservice without having to change others. Connected APIs update regularly and perform their tasks.
Easily Engage with Customers
Loyal customers generate revenue in ways a new customer cannot. This is why it is important to implement a loyalty program that customers enjoy.
Loyalty programs show customers that your business cares about them. Successful loyalty programs take customer feedback into consideration when making improvements. This allows customers to feel like a part of the decision-making process.
Smooth Data Management
In a newsletter, Data Services Inc. shared that $600 billion is spent globally on problems that arise from not updating data regularly. Headless loyalty programs have a smooth data management process to reduce issues. Data is collected from multiple sources and endpoints. Then it is placed in a single location where informative actions can be taken from the collected data. Headless architecture ensures smooth data transfers from one place to another within the ecosystem. Since the data is managed properly, the costs to sort and analyze the data are reduced significantly.
Increase Customer Conversions
Rank Tracker, an expert SEO platform, states that 78% of companies are not happy with their conversion rates. Implementing a successful loyalty program can help retailers increase conversions. When a customer can access discounts and coupons across all of their devices, it increases the likelihood that they will return. Not only that but they are likely to recommend your business to their friends and family. A unified experience with your business across multiple touchpoints helps to increase loyal customers.
Quick Implementation
You Gov UK found that 94% of users do not trust a website that is not updated regularly. In the modern world, customers have immediate access to endless retailers. This makes competition high; every day spent implementing changes matters. One benefit of headless architecture is that updates can be made whenever and wherever. Businesses can identify industry trends and quickly implement changes to maintain their competitive advantage.
Adaptable, Scalable, and Flexible
Retailers lose customers when their platform is not adaptable, scalable, or flexible enough to handle an increase in traffic. Google concludes in a report that as page load time increases from 1 second to 3 seconds the probability of bounce also increases by 32%.
Implementing a headless loyalty program allows retailers to update their discounts and coupons, and reshape the loyalty program as needed. This is because there are rarely any dependencies between the microservices.
Conclusion
In conclusion, headless architecture has many benefits that can improve loyalty programs in 2023. Headless architecture allows businesses to quickly implement new loyalty programs without lags or downtime. Not only can they quickly implement these programs, but they are also given the ability to create custom solutions to meet consumers’ needs and improve UX. Additionally, headless architecture is highly scalable, allowing loyalty programs to grow and evolve with a business. Big companies have already started making the leap to headless architecture, and the benefits are clear.
Overall, implementing headless architecture in your loyalty program can help you stay ahead of the competition and enhance customer experiences.
Ready to build your own headless loyalty program? Get more details at UpStart Commerce and start your free trial today.
