9/04/13

Special Report: How to evaluate e-commerce platforms

E-commerce platforms evolve to fit the changing needs of consumers and retailers.

Internet Retailer

E-commerce platforms are almost unrecognizable from the pioneering software that enabled consumers to make purchases online nearly 20 years ago. Those applications were simple shopping carts into which consumers dropped a selected item and then proceeded to a multi-page checkout process.

Todayís e-commerce platforms are all-encompassing retail sales engines that, among other things, provide consumers with real-time inventory counts, allow them to track shipment statuses, read product reviews, deliver streamlined navigation paths so they can quickly find the products they are looking for, and enable retailers to coordinate marketing initiatives, not just online, but also through mobile and social media channels.

Not surprisingly, the complexity of e-commerce platforms means retailers have many more options to consider when selecting a platform. The wide array of options can overwhelm, but experts say the evaluation process retailers should use is well established. To choose the right platform, retailers must try to match the features, functions and flexibility of the platforms under consideration with their current and future needs.

"When deciding on a platform, retailers need to take into consideration such criteria as their peaks and valleys for volume and traffic, expectations for uptime, integration plans to third-party applications and their own back-office systems, and the total cost of operations over the three- to five-year lifecycle of most platforms," says Jay Upchurch, assistant vice president, AT&T Cloud Solutions for AT&T Business Solutions, which hosts and manages e-commerce platforms. "There are a lot of hurdles retailers need to clear before they select and deploy a platform and we help retailers figure out how to clear them."

Many established retailers require platform agility. Retailers need to be able to modify their web sites as needed—for instance, to shut down a landing page for a search engine marketing campaign that has run its course and replace it with another, rather than rely on the vendorís support staff to do it. Those abilities can be the difference between capitalizing on sales and marketing opportunities as they arise and missing them.

"A lot of retailers want a platform that lets them take control of their web site because they have the technical skills to perform such tasks as adding an affiliate site or creating landing pages for a flash sale," says Steve Deller, president and CEO of e-commerce platform provider Virid. "Online shopping is all about the customer experience and successful retailers are the ones that meet consumersí changing expectations for that experience."

Different needs

But since every e-retailer has different needs—newcomers to e-commerce, for example, typically want to get their online storefront up and running as fast as possible—there is no one-size-fits-all platform. But the most effective platforms, experts say, give retailers the one-two punch of control and flexibility.

"Different platforms offer different tools, but the best ones are those that unlock functionality in a way that gives the retailer control and flexibility," says Tom Taylor, vice president of Fulfillment by Amazon and Amazon Webstore. "A robust set of APIs is the key."

APIs, or application programming interfaces, are strings of programming code that software developers make public so other developers can create applications that interact with their software. In the case of e-commerce platforms, APIs open the door to integration of third-party applications, such as e-mail, inventory management and payment processing, by making it possible for them to exchange data with the platform, which extends the platformís functionality. Typically, retailers can manage all the applications running on their e-commerce platform through an executive dashboard.

"We see a lot of retailers that have integrated applications from third-party suppliers, so we believe strongly in platforms with good APIs," says AT&Tís Upchurch.

Offering IBM Corp.ís WebSphere, Oracleís ATG Commerce and SAPís hybris platforms, AT&T Business Solutions represents leading e-commerce platforms known for their robust APIs. AT&T by year-end plans to make available to mid-sized retailers a version of IBM WebSphere, which is a platform typically used by large retailers, that provides them with a starter storefront. "Thereís an opportunity to take larger, more extensive platforms to the mid-market," Upchurch says.

Prior to integrating any outside application into an e-commerce platform, AT&T analyzes the applicationís APIs for how they match up with the platformís APIs, and then writes the code to enable integration. Next, the application is tested to determine its impact on the platformís performance and how the application itself performs under a variety of operating conditions.

"The aim is to ensure the long-term health of the connection between the app and the platform by engaging with the customer on platform design," Upchurch says.

Mobility matters

While many platform providers attempt to meet retailersí growing needs for features and functionality by expanding the roster of standard tools, one component they canít afford to overlook is optimizing their web store for mobile devices.

Consumers today use mobile devices to make purchases from retail web sites, as opposed to simply accessing the site for information. During the second quarter of 2013, shoppers using smartphones and tablet computers increased their spending 24% to $4.7 billion year over year, according to online measurement and analytics firm comScore Inc.

The explosive growth in the mobile channel means that e-retailers can no longer get by without a mobile site. "Some retailers have customers that only shop using a mobile device, so the need for a mobile-optimized web site is critical," says Viridís Deller. "Responsive design is an approach that a lot of retailers are considering, but even when itís done right, it only gets you 80% of the way there."

The buzz around responsive design is growing louder because it allows retailers to create web sites that adjust to the varying screen sizes of smartphones and tablet computers. Responsive design uses a single code base that rearranges content to suit the size and resolution of the device accessing the web site, whether it is a mobile device or a personal computer. The payoff is that mobile users get a better shopping experience and retailers do not have to maintain separate web sites for personal computers and mobile devices.

Retailers, however, may not have the tools within their platforms to design a responsive web site. If that is the case, Deller recommends creating a mobile-specific site.

"Responsive design is an approach that came from a lack of good platform technology or content management systems which couldnít serve content to multiple templates efficiently," he adds. "A modern platform can do just that. The result is a much leaner web page for the smartphone user, which is shown to significantly increase sales over a responsive site simply by reducing the download time."

One way retailers can determine whether to build a dedicated mobile site or use responsive design is to study their analytics to determine which devices shoppers use to access their sites.

Armed with that information, retailers can weigh the pros and cons of responsively designed sites and mobile-only sites. "What weíre seeing now is the division between brands launching dedicated mobile sites versus those opting for responsive layouts," says Amazonís Taylor. "We power sites that do both and weíve seen both be successful—it ends up being the retailerís decision on what approach works best for them."

One advantage of a dedicated mobile site is that it can provide a carefully crafted mobile experience that loads quickly, whereas responsive sites scale to the form factors of new devices beyond mobile, such as televisions and gaming consoles wired to the Internet. "That can provide some SEO benefits over the alternative," Taylor says.

The Amazon Webstore e-commerce platform is hosted on secure Amazon servers that scale capacity as needed based on traffic. Since the platform is a software-as-a-service offering, retailers pay no licensing fees and connect to the Amazon.com host server via the web to update product catalogs and download orders and customer information. As Amazon makes improvements to its Webstore technology, every store gets free access to those upgrades.

"When retailers build on our platform, itís still their own site on their own domain, but they are backed by the same scalable technology that powers Amazon.com, enabling them to focus on what they do best—products and merchandising—instead of managing their technology," Taylor says. "Our variable cost model isnít based on licenses or servers or bandwidth, itís based on revenue—meaning itís in our best interest to make sure our clients are as successful as possible."

Even when using responsive design, retailers need to keep in mind that mobile usersí needs differ from shoppers using PCs. Mobile shoppers tend to be more task oriented, such as checking a price or whether an item on the retailerís web site is available in-store, and are less likely to browse once they log on to a retailerís site. By scaling down the amount of information delivered to mobile shoppers, retailers can make it easier for them to navigate the site and quickly complete their task.

"In the mobile world, it ís important to reduce page clutter and just give shoppers the necessary data they need to transact—less is actually more," says AT&Tís Upchurch. "The days of fitting all the content and the entire product catalog from an e-commerce site onto a mobile site are behind us."

Socially inclined platforms

Just as mobile commerce is prompting retailers to rethink their needs in an e-commerce platform, so too is social media. The rapid commercialization of social media has opened a new sales channel capable of reaching a wide cross-section of consumers.

One opportunity for retailers engaging in social media is to embed a link to a microsite within a Facebook page or blog that enables consumers to purchase a highlighted item.

Viridís facePlant module allows a customer to share a product to its timeline in much the same way as he shares a post. However, when a consumer clicks on the product for more information (he sees a Play button as a call to action) he is given the option to buy the product in Facebook without having to leave the site or do so through a pop-up window. FacePlant leverages marketAgilityís Portable Data Services Layer (PDSL) to interact with product data and enable purchases.

"Tapping into social media extends the reach of a retailerís store through another sales channel, making it possible to bring the store to the shopper rather than the customer having to come to the store," Deller says.

The marketAgility e-commerce platform supports such features as search engine optimization, rich media, warehouse and inventory management and gift cards, and has modules to support more than 60 applications from other e-commerce services vendors.

Connecting across channels

Not only is a consumerís ability to connect with retailers through multiple channels breaking down the barriers to how she interacts with them, it is creating expectations among consumers that theyíll have the same type of shopping experience online as in the store. "Companies investing in e-commerce need omnichannel visibility," says Amazonís Taylor.

Indeed, online shoppers expect to be able to order an out-of-stock item in the physical store through a kiosk or have a store clerk do so using an Internet-enabled handheld device or cash register.

"Omnichannel visibility will also give multichannel retailers the power to centralize their online, phone and in-store transaction data on a single platform, as well as the customer service tools to manage those transactions, when customers interact with brands anytime, anyplace," Taylor says.

Price considerations

When choosing an e-commerce platform provider, experts recommend retailers look past the platformís initial price tag, as that represents only a portion of the true cost. "Retailers should be asking about total operating costs over the life of the platform," says AT&Tís Upchurch.

Experts say retailers should first consider how the new platformís capabilities will impact customer satisfaction versus how it will directly impact business performance. A focus on serving customer needs, they say, will create positive business returns.

"Itís easy to think that retailers should be asking their platform provider, ëWhat are you doing for me?í, but whatís more important are the needs of their shoppers," Taylor says. "If a platform provider canít provide tools and functionality that positively impact the consumerís experience, then itís not doing its job."

Arguably the ultimate question retailers should ask platform providers is whatís missing from their offerings, since constantly purchasing new tools to tweak a platform after installation quickly gets expensive.

"E-commerce is all about letting the customer shop the way she wants, not how the retailer wants her to shop, and there are lot of little pieces that go into that equation," Deller says. "If any of those pieces are missing, the customer will shop elsewhere and the retailer will end up spending a lot more time and money trying to get that customer back. Itís a lot cheaper to simply keep her in the first place.

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September 2013 E-Commerce Platform Supplement

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