E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
E-commerce platforms evolve to fit the changing needs of consumers and retailers.
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."
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.
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.