Groupon says its focus is on the bottom line, rather than top-line growth.
Open-source systems enable retailers to tailor web sites to their specific needs. But getting exactly what they want isn't simple.
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."