In its second-largest acquisition, Amazon buys the company for $970 million.
Retailers are focusing on basics, such as site design, as they tune up their e-commerce platforms.
E-commerce platforms are the backbone of a web retailing operation. And the systems that work in tandem with the platforms make the backbone that much stronger.
Some e-retailers build their own platforms in-house. But a great many purchase platforms from vendors, either licensing the software or using hosted, on-demand solutions. Retailers using these third-party platforms often find this method to be more manageable and flexible, and even less expensive than building in-house.
Robust e-commerce platforms from vendors provide e-retailers with the tools they need to successfully sell online, especially today, says Robert Anderson, president and CEO of e-commerce platform vendor AspDotNetStorefront.
“Retailers, for example, are able to enter new markets without the expense of opening physical locations to bolster slow bricks-and-mortar sales due to the current economic downturn,” Anderson says. “E-commerce as a whole is still predicted to experience significant growth throughout 2009 and beyond, so it represents an excellent opportunity for retailers to actually grow their sales instead of just weathering the economic storm.”
Focusing on the core
What many e-commerce technology experts are noticing this year is vendors and retailers eschewing bells and whistles and focusing on core requirements.
“It’s back to basics,” says Avery Amaya, director of business development at e-commerce platform vendor WebLinc LLC. “We don’t see clients jumping for the next new thing. The trend now is to take a fresh look at everything you’re doing and figuring out if that’s the right place to spend money. Today e-commerce is the best-growing channel, but retailers still have to be wise about where they spend their dollars.”
Site design is an example of where e-retailers are going back to the basics and spending their money wisely, experts say. While some retailers are going for the latest and greatest Web 2.0 technologies, many are trying to improve what they already have, says Ethan Giffin, CEO of Groove Commerce LLC, an e-commerce site design and online marketing firm.
“We’re still seeing a lot of people making significant improvements to their web sites with just a little bit more focus,” Giffin says. “We recently redesigned a checkout process for a retailer and got them an overnight increase in sales just by fine-tuning what was shown and having better explanations and assurances for shoppers. An increase in your checkout conversion rate is really the only place where you can add top-line revenue pretty quickly and easily.”
Retailers also have to be wise about how they operate their online stores via their e-commerce platform. Part of this back-to-basics approach includes the need for a focus on tools to help manage a site, says Bernardine Wu, CEO of FitForCommerce, an e-commerce consulting firm that specializes in helping retailers select technology vendors.
“There hasn’t been a lot of attention paid to site administration, management and control panel tools. Retailers really need tools that a business user can use as opposed to only someone who knows HTML or is a techie,” Wu says. “Business users themselves have to do many more things around merchandising products and so on. Platform providers need to provide that site administration capability so a business user can control the site.”
At the same time e-retailers are focusing on the basics to ensure operations are running smoothly and nothing is getting in the way of revenue, they’re also considering smaller, focused projects that have strong potential to boost the bottom line, experts observe. E-commerce platform vendors are responding by ensuring their platforms can easily integrate what they call “point solutions,” or by including such task-specific technology in their platforms to begin with.
“Integration has always been a critical point for platforms because ultimately platforms can’t do everything,” Wu says. “On the one hand, platform providers need to keep offering more and more features, but underlying all of this is the fact that they need a strong ability to integrate with point solutions.”
One of the most popular solutions retailers are seeking and vendors are integrating or offering is customer ratings and reviews. These systems are fast becoming a must-have in e-retailing, industry observers say.
Similarly, product recommendations systems are increasingly prevalent in web retailing. They’re a helpful part of the customer experience that drive cross-selling and upselling. Retailers have been turning to a handful of recommendations vendors and demanding their platform vendors effectively integrate these personalization systems.
“In the past, finding a way to automate recommendations has been a pain in the neck. But now there are good systems out there, and we can integrate with them,” says Amaya of WebLinc. “People are browsing more than before. And these days they have less money to work with, so they’re looking through a stronger microscope to make sure they get what they want and spend their money the right way. This is where recommendations can help.”
Be it through ratings and reviews, recommendations, or other solutions, personalization of an e-commerce site is important, and retailers are asking vendors for help, Amaya adds.
“Retailers are coming to us and saying they heard about another retailer or read a case study about implementing one of these technologies,” he explains. “‘We know you guys have a bunch of clients that have used a recommendations company in past, does it make sense for us?’ Retailers are out there actively, and asking us for help when looking to implement third-party tools.”
Ratings and reviews and recommendations system enhance the online experience and help retailers sell, but they’re not mandatory. Order management systems are part of the bedrock of e-commerce. Some retailers secure them as part of an e-commerce platform; others select order management systems from vendors that focus on such solutions, then integrate those systems into their platforms.
However, more e-commerce platform vendors have begun building order management systems and including them as part of what they describe as their end-to-end e-commerce solution.
“Very few platform vendors have had order management systems; they normally would integrate with another vendor’s system. Now we see a lot more building by platform vendors,” says Wu of FitForCommerce. “It’s a better way to go because it’s seamless, not having to pass information to yet another vendor. The days of a platform being only the web storefront are coming to an end.”