These days, brands with both traditional brick-n-mortar or indirect models are coming to grips with the fact that the eCommerce platforms they built 5 years ago will not be able to support the double-digit growth of this channel.
After several meetings with global brands who seem to be asking the same questions, I thought I might share an emerging term in the e-business world and what it means for your online experience. The term? Re-platforming.
For many ebusiness teams it started with a realization: “I sent out 200,000 promotional messages to my community and my e-store froze losing 30% of our orders for the day…”
Or… “My CRM, ERP and e-store report different revenue numbers, and my customers have three different account histories.”
Or maybe it is was a bit more smash-in-your-face: (When you overheard your hosting provider recommend that you “throttle-back your campaigns” because the e-store is getting too many orders…)
< Huh? What? >
Needless to say, a discussion about re-platforming starts with the realization that your e-store is a significant part of business; and needs to scale. And maybe global scalability for your business is just around the corner.
As a digital agency, we have had many customers with aggressive growth strategies come to terms with the fact that the store they built is not keeping up with customer demand. From there they ask us if it is time to “Fix what I have?" or “Move to something better?”
Just so we are clear, I am not talking about the 650,000 storefronts in the US that sell less than $1000/year. This re-platforming conversation is for those selling a gross merchandise volume (GMV) of millions and wanting to grow by double-digits.
While there are literally thousands of options, the size of this type of business reduces this list to three core approaches.
The strength of this option is its ability to develop a storefront quickly. In our experience, this strength is also its weakness. Integrators will often skip over thoughtful planning and development of data architecture and integrations. This causes the system to become fragile over time.
There are also some inherent weaknesses to a platform strategy of ‘one size fits most’ that can be experienced. These include limitations to scalability and performance ‘clumsiness.’
When a site has grown organically with a business, the site carries the overhead and resources of the entire system. This makes it hard to keep the e-store agile as you scale. Additionally, security and update management are a challenge. Vulnerabilities can be hidden in the massive codebase and upgrades are often complete re-writes of integrations.
While the emerging SaaS models like Salesforce’s Commerce Cloud (Demandware) have solved the upgrade and security weaknesses of the enterprise systems, it comes with a different pricing structure – an initial cost and shared revenue model.
Those that choose this approach understand that the big advantage to this option is rapid scalability.
Many clients who choose this approach understand that eCommerce requires a constant investment. This option has merits because it allows companies to stay focused on selling and marketing their products while not becoming technology businesses – (or having to deal with technology as an impediment to their growth).
Custom designed eCommerce solutions are best when your e-business is not simply a “buy now” button.
Heavy integrations, B2B sales models and configurable products all require custom applications – this is where custom e-stores shine. In addition, you have better control over the multiple integrations you need for your business.
We have found that our customers that have moved from a third-party platform have enjoyed the freedom of designing a digital experience for their customers that is EXACTLY the way they want/need it.
It “feels” like their brand and they can build new tools as sales grow.
In the past, custom always raised infrastructure concerns and internal burdens, but with today’s technology this is no longer an issue. With Cloud hosting like Azure, AWS and Heroku, you can have enterprise level hosting with rapid scale-up (or down) that meets the needs of some platform based hosting providers.
The weakness of a purely custom approach is that if the customer does not have strong marketing and technical leadership the systems will degrade over time because there has not been constant up-keep and improvements.
Because of this, many have taken a hybrid approach 1) Use a platform or SaaS model for what they are good at, and then 2) Develop custom tools that create competitive advantages.
With more than fifteen years delivering ecommerce solutions, our team at CQL has found there are some proven concepts that need to be considered no matter what platform option you choose.
Whenever our customers consider a change in their e-business (i.e., whether a move to/from Magento, Demandware, Custom, or others) there is always a concern about the learning curve, licensing and integrations. These are all important, but the real reason to change is growth, speed-to-market and the creation of competitive advantage.
Integrated consumer experiences that connect on-line buying with in-store sales have never been more important as shoppers browse at home or during errands, and then complete the transaction with a pick-up or make final purchase decision in-store. By not delivering on the ease of this process, retailers will disappoint and alienate consumers.
With 270 million consumers buying on-line and browsing-to-buy by 2020, the ability to scale and create a seamless experience has never been more important.
If you are contemplating a re-platform and want to talk to a team who has 'been there', 'done that' feel free to get in touch.