June 1, 2006, 12:00 AM

SPONSORED SUPPLEMENT: Creating the e-commerce platform of the future

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On top of it all, retailers need to find flexibility in an e-commerce system. "The business applications that are the mainstays of any industry are the ones that can adapt to changing market conditions," says Bob LaGarde, CEO of LaGarde Inc. "E-commerce platforms need to be able to support the retailer`s current unique selling processes and the evolution of those processes in order to reach new market segments, interact more effectively with the customer and sell more efficiently."

Furthermore, retailers should ask their vendors about the frequency with which the vendors add features to their systems and the length of time it takes to make those features available. For instance, Truition Inc., which offers a hosted e-commerce solution, provides upgrades across its platform, such as language conversion, every 30 days. The aim is to deliver features and functionality as they become relevant and as customers expect to see them.

"Retailers have overarching needs, so it is important to have an e-commerce provider that can elevate their platform quickly and keep retailers ahead of the competitive curve," says Butch Langlois, president and CEO, Truition.

An area that Truition encourages retailers to pay attention to--and where it keeps its offerings up to date--is international markets, allowing retailers to expand across borders into Canada, Europe and Asia, markets where growth opportunities are abundant.

Logistically, retailers need to manage a variety of issues when establishing a footprint in a foreign market, ranging from daily fluctuations in currency conversion when billing a customer, to duty fees levied by each country to which they ship and including the ability to verify whether the international courier used to ship the package actually delivered it.

"With sales in Europe growing about four times faster than in the United States, retailers need a platform that allows for viable, economical access to European markets," Langlois says. "Competition is only going to get stiffer in the U.S."

Keeping up

Often keeping retailers ahead of the competitive curve is a job that falls to the vendor, as many retailers don`t know all that their e-commerce platforms can do for them. "We focus on helping customers understand the benefits and usability of their e-commerce platform so they can grow as fast as they want without the technology usurping their business," says Stephanie Leffler, president and general manger, Monster Commerce. "There is a very small percentage of retailers that actually utilize the full capability of their e-commerce platform."

Even many of the basic features on e-commerce platforms are under utilized. "Certain features, such as the shopping cart and checkout, have a big impact on abandonment rates, so it is essential that retailers understand how to make full use of them," says Burke of MarketLive. "It comes down to execution. If a retailer doesn`t understand how to use the tool sets within their platform, they won`t execute."

That is especially true in the case of the shopping cart, where abandonment rates can range from more than 30% for catalogers to 50% for multi-channel-retailers, according to industry experts.

MarketLive recently upgraded its shopping cart application to keep shoppers apprised of the total cost of the items in their cart at all times, including tax, shipping and any other costs. Research shows that 57% of shoppers abandon carts because of what they perceive to be high shipping costs, according to Burke.

"The shopping cart and checkout need to be feature rich because they have a direct impact on abandonment," he says. "Any feature within an e-commerce platform that can create a good customer relationship is highly relevant to the retailer`s merchandising and marketing strategy."

In addition to the broad features of e-commerce platforms, retailers must consider specific features, such as payment options. Not only do consumers prefer more ways to pay other than credit cards, but they also want to know they are conducting a transaction in a secure environment.

Staying relevant

Retailers that expand their payment options can increase sales as much as 20%, according to industry experts. With payment options such as PayPal and Bill Me Later, a consumer credit line, quickly gaining popularity with consumers, retailers that must wait for an e-commerce platform provider to add these features can lose sales, according to Truition`s Langlois.

"It is unacceptable to release new upgrades every 12 months," he says. "New elements need to be made available on a regular basis so the platform can morph to consumers` needs as they use the retailer`s site."

Truition, which recently added Bill Me Later to its platform, upgrades its platform every 30 days. "Wait too long to introduce a new feature and it loses relevancy," Langlois adds.

In selecting a vendor, retailers need to keep in mind not to lock themselves into a price point, as doing so can result in shortcomings within the platform selected. "Cheaper isn`t always better, because you do get what you pay for," says Justin Rattigan, vice president of Solid Cactus Inc., which offers tools to build and improve storefronts using the Yahoo Stores platform.

One of the advantages Solid Cactus touts by building around the Yahoo Stores platform is a proven platform that is constantly evolving. "Retailers need vendors that are moving forward with the market and are focused on e-commerce, not just selling add-ons to a basic package," Rattigan says. "If the platform does not accommodate a retailer`s business needs, it is unlikely to offer the scalability and flexibility to support it five years out."

There are several pricing options for e-commerce platforms. Hosted solutions for which retailers pay a monthly fee are among the most popular. Managed solutions in which retailers purchase a license for the software but offload IT support onto the vendor is another option gaining in popularity. Lastly, retailers can purchase a software license and manage the application themselves.

Budget considerations

Determining which solution is best comes down to the retailer`s IT budget and accounting procedures according to ATG`s Conneighton. "If the retailer is looking to make a capital expenditure, owning the license or a managed solution may make more sense," he says. "If the budget is not there for a capital expenditure, then a hosted solution may be best."

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