A Profitero study showed Target’s online prices were 25% more expensive than Wal-Mart’s, which were just slightly more expensive than prices on Amazon.
Given the technical issues involved in web hosting, it should be I.T. specialists, not marketers, who choose a web host.
Anyone who’s ever had to choose a mobile service plan can relate to the Internet retailer business team that must find a host for its web site. The mobile buyer has questions about service, feature set, geographic coverage and pricing, but as to the underlying technology that delivers the package to his phone? He leaves it to the service provider to make that happen, without knowing exactly how it’s done.
It’s much the same for e-commerce managers looking for a web host. While hosting is the lifeblood of the site, details such as server configuration and PCI compliance protocols are beyond the expertise of most business managers-they depend on the web host to deliver what it says it will, without firsthand knowledge of precisely how the process works.
Given the technical issues involved in web hosting, it should be information technology specialists, and not marketers, who choose a web host, says Paul Goodman, senior vice president of e-commerce and marketing at Dale and Thomas Popcorn, which operates an e-commerce site, about a dozen stores and a wholesale business. “They need to ultimately own it, because if the site’s not working, and it’s not a software issue, then it’s a hardware issue, and marketing people don’t run that.”
But that doesn’t mean smart business leaders come to the table uninformed when their retail site is looking for a web host. Scalability, redundancy and co-location issues, seamless rollover ability and security all can have a profound impact on the site’s business results. When selecting a web host, they’re just some of the top-level questions that business managers should have on their own checklist before handing off more detailed questions about the technical interface to IT.
“It’s going to come down to knowing what questions to ask and making sure you are contractually protected,” says Brian Walker, senior e-commerce analyst at Forrester Research Inc.
Host your own
Not everyone has to shop for a web host, as larger online retailers often have the resources to host their own sites. That’s what Lillian Vernon Corp. did when Goodman was head of e-commerce there earlier in his career. With an IT staff on site 24/7 and robust infrastructure to support a high-volume catalog call center, it was a relatively easy matter to add e-commerce hosting, he says.
For DaleandThomasPopcorn.com, Goodman decided it made more sense to outsource hosting of the site to web design and hosting vendor AmericanEagle.com. “We don’t have 24/7 coverage here, and we are not a redundant facility,” he says. “I don’t believe anyone should host their own site unless they’ve got those things in place.”
Some retailers, like Goodman, prefer the convenience of dealing with one provider to handle site design, development and hosting. DaleandThomasPopcorn.com was completely redesigned last year by AmericanEagle, which also did all the development. “Web hosting was actually the last thing we looked at,” Goodman says. “The first was to find someone to design and build the site on a stable platform. AmericanEagle also does hosting, and they own their own servers. They gave us a separate proposal for hosting, and it came back competitive with others we looked at.”
Dale and Thomas Popcorn pays a fixed monthly rate of “between $5,000 and $10,000” just for web hosting, Goodman says. That flat rate can go up if demand spikes unexpectedly during a given month.
While price is important, performance is crucial for an e-commerce site. A retailer should negotiate agreements on the percentage of time the site must be available, bandwidth levels during peak shopping times and other services levels, Forrester’s Walker says.
A host’s ability to add capacity quickly is important. “You don’t want to find out when your web site goes down Dec. 15, or when Oprah mentions your product on her show, that you have issues that have been overlooked,” Walker says.
Determining the capacity a retailer requires starts with an internal review by the retailer of how many pages and products the site will have, and how much traffic it expects to get.
Along with the ability to scale up quickly, the web host also should be equipped to handle the increasing number of third-party applications tying into e-commerce platforms, such as customer review services and recommendation engines. “Many retailers are expecting the ability to recreate e-commerce features they see on the sites of big retailers, such as Amazon or Newegg,” says Kieth Spohn, product manager at web hosting vendor 1 & 1. That means a host must demonstrate it can easily and securely integrate and serve third-party applications.
E-retailers also need to consider both data redundancy and co-location when choosing a web host. Redundancy means storing the data on more than one server, so that the site can continue to function if a primary server fails. Online exercise equipment retailer SmoothFitness.com stores the data for its multiple sites on three dedicated servers at its hosting company, INetU Inc., to guard against outages. Walker says e-retailers should check out a web host’s path to seamless rollover; that is, the host’s ability to transfer a retailer’s data from one server to another as needed, without a hiccup in service.
But what if something happens to temporarily knock an entire city or one of its major ISPs temporarily off the Internet? That’s where co-location comes in. Ideally, a retailer’s data should be stored at a second location far enough removed from the first set of servers so that it’s not likely to be affected by whatever is affecting them. If not, “you and your host facility are both down, so redundancy does nothing for that,” says David Wertheimer, vice president of operations at Smooth Fitness. The King of Prussia, Penn.-based retailer weathered a temporary issue with major ISP Comcast in nearby Philadelphia without interruption earlier this year, because it’s hosted outside of the area.
With new viruses, scams, and other new online threats continually emerging, securing a site is an ongoing challenge. So a great deal of talk around web hosting now centers around compliance with the Payment Card Industry Data Security Standard developed by the major card brands to prevent compromise of cardholder data. Any company that handles payment card data-including web hosting companies-must comply with PCI standards or risk fines and the suspension of their right to handle card transactions.