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55% of e-retailers are considering outsourcing their e-commerce platforms, a recent survey of e-retailers from Forrester Research Inc. reports. Footwear and accessories retailer Bakers Direct chose to outsource and it’s happy with its decision.
55% of e-retailers are considering outsourcing their e-commerce platforms, according to a recent survey of nearly 300 online retailers from Forrester Research Inc. Footwear and accessories retailer Bakers Direct, the web unit of Bakers Footwear Group, recently chose the outsource route and it’s happy with its decision.
BakersShoes.com, which generated less than 10% of its $183 million in sales via the web in its last fiscal year that ended Oct. 31, 2009, wanted to focus on merchandising and marketing, not dealing with customizing code or PCI payment security compliance. And so it went with a hosted Microsoft .Net program from e-commerce platform provider Virid, says Scott Cohn, director of merchandising and sales for Bakers Direct.
Bakers and Virid worked together to create page templates with categories for adding text, graphics and images and to develop a schedule for site advancements and customizations three months, six months and a year down the road.
“Instead of a canned platform, which is what we had before where you get in a queue and the vendor gets to your projects when they get to them, we worked with Virid through how we wanted to execute our goals,” Cohn says. “It’s a lot better than putting a ticket in with someone in a foreign country and hoping it gets done.”
Bakers Direct, which wanted to move from its old platform quickly because of frequent site downtime, says it agreed with Virid on a schedule for adding such features as customer reviews and a rolling home page banner. And it says Virid, which charged Bakers a launch fee and takes a set percentage of revenue each month, was mostly able to deliver on time because there were no surprises.
Using commercially available software is the faster way to get a site launched, Cohn says. And, he adds, outsourcing can help keep costs down because vendors that work with many clients can lock in volume discounts for products and services. The downside is that if a vendor creates a new feature for one client, it generally is free to offer it to others.
“Once you launch something with a vendor, it’s out there for all their clients, Cohn says. “We wouldn’t want to be withheld a cool feature Virid is offering others.”
For retailers that decide to outsource, Cohn recommends vetting vendors carefully. For example, Bakers wanted to offer complex promotional incentives such as “Buy a special occasion shoe and get 50% off a special occasion handbag,” something he couldn’t easily do with his former system. Cohn asked his finalists to go into their systems and show him how to add such a promotion. He’s glad he did. One couldn’t do it.
While Bakers decided to delegate its platform to a pro, many e-retailers have yet to hand over the reins. In the January Forrester survey, 62% of respondents still managed their platforms in-house. However, the survey also found 27% are planning to re-platform in the next 18 months and 11% already had a re-launch project underway. It seems more e-retailers will soon be making that important build-versus-buy decision.