Open-source systems enable retailers to tailor web sites to their specific needs. But getting exactly what they want isn't simple.
Zak Stambor , Managing Editor
Executives at Do It Best Corp., a multichannel hardware retailer that operates both a direct-to-consumer and business-to-business division, last summer sat down to discuss and map out the elements they thought were lacking on the retailer's two e-commerce sites—DoItBest.com and MyDoItBest.com.
One meeting quickly led to a series of meetings. By the time the executives' wish lists were complete, they had more than 1,700 requirements. Some were general, like social sharing buttons and two-click checkout on DoItBest.com. Others were tied more closely to the specific needs of its business, like finding ways to integrate the sites with the merchant's homegrown supply chain software.
After reviewing the list, the executives determined that the retailer's Microsoft Corp.-based system, which Do It Best had used and updated several times over the previous 15 years, wasn't capable of meeting the merchant's changing needs.
What the retailer needed was the flexibility to craft a site that would meet the evolving expectations of Do It Best's customers, both businesses and consumers, says Tim Miller, vice president of marketing. The company evaluated about 10 providers, most of them offering software in the conventional way, with only the vendor having access to the underlying source code. Ultimately, however, Do It Best selected WebLinc LLC, whose software also is proprietary, but based on the open-source Ruby on Rails framework and MongoDB document database.
The system, Miller says, offered the most flexibility—thanks in part to it being based on open-source technology—at the best price. "Ultimately it came down to the right features at the right price," Miller says. There weren't any upfront licensing fees, which meant it was 25% to 35% cheaper than the conventional, closed platforms.
But shifting to an open-source-based system also meant the retailer's information technology team had to learn Ruby on Rails and MongoDB. More than six months into the project, the retailer is still working its way up a steep learning curve. While the new sites are set to launch in October, just before the start of the holiday season, the retailer has not yet decided whether it should manage site support and development itself or outsource the work to WebLinc. "We don't know where we'll end up," Miller says.
Many retailers also find themselves perplexed when they stray from the familiar path of licensing software that a vendor develops and maintains—but that only the vendor can modify—into the world of open-source technology. Open-source software is not necessarily free—some is, and some isn't. But open source means anyone can see and modify the source code, and that they can distribute and charge for any enhancements they produce.
This requirement, that a developer can distribute or sell any add-on, is part of the definition established by the Open Source Initiative, a nonprofit organization that offers a seal of approval that software is indeed open source. It's one reason developers flock to open-source software, as they can profit from developing add-ons they can sell or by providing implementation and development work for open-source users.
As a result, vibrant communities often form around open-source software. OScommerce, one of the earliest examples of open-source e-commerce software, claims more than 260,000 community members have posted 1.5 million times to its forum and produced 7,000 free add-ons, such as a tool that lets shoppers choose to display prices with or without tax.
The growing appeal of open-source software is evident: Three out of four developers said they have recently used open-source technology, according to a 2013 Forrester Research Inc. report, up from about 40% three years earlier. But it's typically more complex to deploy than conventional commercial software, and retailers often find that it can be difficult and time-consuming to build what they want with open-source software, especially if they don't already have personnel familiar with the technology. While some retailers are finding the benefits of open-source technology make it preferable to conventional software, there are also online retailers going the opposite direction, back to packaged commercial products.
For Blue Bottle Coffee Inc., open source is the right choice because it offers the best way for the high-end multichannel coffee retailer to craft its e-commerce site to its exact needs, says David Bowman, chief financial officer. Blue Bottle Coffee last year moved from a closed-source platform to an e-commerce platform built on Spree Commerce Inc.'s open-source system.
When Blue Bottle hired Bowman in 2012, the retailer's sales had grown to about $1 million online, but the e-commerce software it was using, from a vendor Bowman declines to name, didn't offer features the retailer felt it needed to grow its business online. Blue Bottle wanted, for instance, to let shoppers buy subscriptions—monthly coffee bean deliveries—and it wanted to make it easy for shoppers to pause, cancel or restart their delivery. The old system couldn't handle subscriptions, let alone that kind of flexibility.
After evaluating several options, the retailer found Spree Commerce fit its needs. Out of the box, Spree Commerce offers a host of free order management and product management tools. It also incorporates responsive design principles so that Blue Bottle can maintain a single set of web site content that adapts the display depending on whether the consumer is using a computer, tablet or smartphone. Spree Commerce also offers, for an added fee, a tool that links together a retailer's systems—fulfillment, accounting, anything else—to provide a single location to view all the information in those systems.
"We wanted flexibility and we wanted openness to link our systems together," Bowman says. Spree Commerce offered both. "Our systems gather a lot of data and that data tells a story," he says. "But if you can't bring that data together, you won't understand that story."
The problem was that Blue Bottle still needed to build custom features, such as the subscription option, but lacked the expertise to do so on its own. The retailer outsourced the work to Dynamo, a Montreal-based digital design firm that is one of 14 vendors Spree Commerce lists as "premier partners." Those are vendors Spree Commerce has vetted to ensure their competence with its software.
Working with an outside firm was "significantly" less expensive than hiring an engineering team, Bowman says. That's particularly true since many open-source developers often command a higher price than other software specialists, says Jeffrey Hammond, a vice president and principal analyst at Forrester Research.
Outsourcing also helped Blue Bottle get started on the build quicker, since it didn't have to devote time to interviewing applicants.
After Blue Bottle hired Dynamo, it began using collaboration software to keep everyone abreast of progress and problems. It shares visual content using Basecamp, a project management tool that costs anywhere between $20 and $150 a month, based on a merchant's project and storage needs. And it logs issues using GitHub, which lets multiple users review changes, comment on lines of code, report issues and plan projects. It also holds a weekly call with Dynamo to discuss any problems that arise.
The system has worked. Between the collaboration software and weekly call, the retailer has been able to address any pressing needs—and avoid any unwelcome surprises, Bowman says.
As a result, the site, which launched on time in June, is far more engaging than the previous site, he says. And that's helped sales triple year over year. The retailer has reduced its bounce rate and nearly doubled the average time on the site.
Blue Bottle's online product mix is relatively simple—it sells coffee and related accessories directly to consumers.
That's very different from Terry Bicycles, which maintains separate business-to-consumer and B2B sites. Maintaining two sites that share inventory is complicated, particularly for a retailer with only about 20 employees, says CEO Elisabeth Robert.
That complexity is one of the main reasons it moved from open-source technology to packaged software from NetSuite Inc. a few years ago.
"An open-source platform required a lot of management of inventory to support both channels and transaction processing," she says. "It required a lot of updating of the web sites."
The retailer only had one programmer capable of making those updates. When he left for another job, Robert was stuck with a patchwork site—the result of numerous fixes that weren't in line with standard best practices—that she couldn't easily change.
"It was difficult to find someone with this programmer's specific skill set," she says. "I didn't like being so dependent on one programmer. It became clear to me that we needed to have a clear end-to-end solution."
She settled on NetSuite largely because the system could handle the retailer's complexities—at an annual cost about half the $70,000 or so she would have paid a replacement for the programmer.
Giving up the flexibility of an open-source system did have its downsides. At first, Robert says, the retailer couldn't run certain types of promotional campaigns—such as buy one, get one free promotions—but NetSuite quickly worked with the merchant to develop those features. And it did so quicker than the retailer's single programmer could have, she says. "With just one kid using open-source technology to build those tools, it would have taken months," Robert says.
Not everything is perfect—the checkout flow is still too clunky, she says—but she says there's a comfort in working with an established company that provides comprehensive business software to more than 20,000 clients. "Being small, with limited resources, it is much easier to put everything in one bucket and not have to worry about it," she says.
That includes ensuring the site is compliant with the Payment Card Industry Data Security Standards. "That offers peace of mind and the knowledge that we're abiding by best practices," Robert says. "Before we switched systems we were never comfortable that we had everything right."
But working with a trusted third-party vendor, as Blue Bottle works with Dynamo, can eliminate those concerns, says Forrester's Hammond. "Open-source technology isn't just flexible in how you can build, its support system is also flexible," he says. "You pay for the support you need." And because it is open source, if one vendor doesn't work out, a retailer may well be able to find others familiar with that technology. With conventional software, a retailer may find that only the vendor can modify the software or build a new feature.
Advocates of open source cite the community aspect as a big plus. As users improve the software and share it with others, the software attracts more users, who further improve it. Blue Bottle, for example, made available for free the subscription tool it built. Sharing a new feature tool with the community makes a platform stronger, Bowman says.
"You don't want your community to dry up," Hammond says. "You have to keep people interested." Sharing also spurs others to share, and more retailers sharing means merchants have more tools to weave into their sites.
More options means retailers have more ways to tailor their sites to their specific needs. Just don't expect it to be easy to fit those pieces together.
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