Alibaba received a $192,000 penalty for pricing during the past two Singles’ Day sales.
There are more—and better—choices in e-commerce platforms than ever before. It all comes down to finding the right fit.
Bon-Ton Stores Inc. didn’t have much in-house e-commerce technology expertise when it began selling online in 2007. Recognizing that, the retailer chose an e-commerce platform hosted by MarketLive Inc., and it was a good choice at the time, says Jimmy Mansker, vice president of Internet marketing.
“MarketLive was right for us,” Mansker says “We didn’t have a lot of e-commerce experience, and they did a great job for us as we grew.”
But as Bon-Ton developed its own e-commerce expertise, it wanted more direct control of its web site—but without creating new demands on its I.T. team. This time, it went with IBM Corp.’s WebSphere Commerce platform, and in September relaunched the e-commerce presence for its family of retail brands—Bon-Ton, Boston Store, Carson Pirie Scott, Elder-Beerman, Bergner’s, Herberger’s and Younker’s.
“E-commerce is a big strategic initiative for us, so we wanted a platform that we could use to really drive our business in a multichannel environment,” Mansker says. “WebSphere enabled us to be more responsive to customer needs, and make changes on the fly.”
With the new platform, Bon Ton can automatically offer shoppers about to buy a sweater, for instance, related items, such as shoes and accessories. Such cross-sells have helped to make the online channel the retailer’s top sales generator for several merchandise categories.
Bon-Ton is one of many retailers moving to a new e-commerce platform, or contemplating such a move, as the web becomes a bigger part of their business. They’re finding vendors have different fortes, and deliver their technology in different ways.
Finding the right fit is important, experts say. A wrong choice can leave a retailer paying too much up front for technology it’s not ready to use, or paying less but quickly finding the new platform inhibits growth.
“What appears to be the right decision for the short term could be the wrong decision for the long term,” says Gene Alvarez, vice president and e-commerce technology analyst at research and advisory firm Gartner Inc.
Finding the platform that’s just right means sorting through more options than ever before. Those options include the traditional model of licensing software and hosting it in-house, as well as a growing number of vendors that will host software that the retailer connects to through the Internet, a delivery model known as software-as-a-service, or SaaS.
Vendors in both camps are better able than in the past to deploy their technology quickly and to adapt to the needs of e-retailers, says Brian Walker, e-commerce technology analyst at Forrester Research Inc.
Lots of choices means it’s more difficult to come to a decision, retailers say. “It was a steep learning curve to learn all the options,” says Meredith Han, director of marketing for footwear manufacturer and retailer Brooks Sports Inc, which migrated last fall to a new SaaS e-commerce platform from Demandware Inc. “We realized we could outsource any piece of the e-commerce puzzle, which made the search more exhausting.”
What Brooks Sports, Bon-Ton and other merchants have found is that finding the right e-commerce platform provider requires identifying the merchant’s core needs over the short as well as long term—then choosing the provider with the best mix of technology features and delivery model. A retailer whose top goal is to improve conversion rates may want to focus on such front-end features as merchandising and personalized recommendations, while another retailer may be focused on expanding into international markets. The platform, and vendor, must be strong in the areas of greatest importance to the retailer.
Rock/Creek Outfitters took the long view when it found its initially cost-efficient, home-grown e-commerce platform was unable to keep up with increasing traffic volumes. The outdoor sporting gear retailer considered e-commerce platform vendors that offered a relatively quick development time and low cost, but was concerned that the upgrade would be short-lived. “We didn’t want to have to do this again in five years,” says Mark McKnight, director of e-commerce and marketing.
McKnight’s wish list included enabling customers to shop more easily and quickly an extensive product catalog and navigate by many more attributes than color and size. He also wanted to add fulfillment options, including drop-shipping by suppliers.
The retailer chose Art Technology Group Inc.’s e-commerce platform, which it felt could handle more traffic volume and provide the flexibility to add new shopping features, McKnight says. “Everything we asked for was either already in ATG’s platform or could easily be added to their open technology,” he adds. “And ATG was able to explain to me that we could make customizations outside of the core features of the software code, and as we plug in new code it would work with pre-existing code.”
The new ATG site, which is being built by web site developer Vachio Solutions Group, will feature new drop-down category menus that shoppers can hover over to see a long list of subcategories—a key feature that Rock/Creek wanted so it could quickly expose more products and better optimize its site for moving up in natural search rankings.
One downside of deploying the relatively complex ATG platform was that Rock/Creek had to nix its original goal of deploying a new site in time for the 2010 holiday season. It will launch this month instead. But McKnight says it should be worth both the wait and the higher deployment cost for a platform it can directly control and that is both flexible and can handle high traffic volumes. “We expect a good return on investment,” he says.
Though McKnight didn’t comment on the cost of deploying ATG, the vendor’s pricing for the licensed version of ATG Commerce 10 starts at about $200,000; an on-demand version starts at about $20,000 per month.
Control and flexibility
For Brooks Sports, the goal in moving to a new e-commerce platform for its BrooksRunning.com was to get more flexibility and control in managing online content to promote its “Happy Running” brand image of high-tech running gear. The ultimate goal is to attract more visitors and increase conversion, Han says.