E-commerce platforms with more than the basics can help e-retailers take off at a gallop.
Amy Dusto , Associate Editor
Laura Canada didn't rush into online selling. The women's apparel retailer spent about a year vetting e-commerce platform vendors and their proposals before picking OrderDynamics to build and host its e-commerce site, which launched in September.
While price played a role in the decision, it was more important to find e-commerce software that would be easy to implement and maintain, that offered a rich feature set and could grow with the e-retailer over the years, says Sam Barnes, the retailer's e-commerce director. "Ultimately the platform is a tool to reach your online goals," he says.
OrderDynamics was roughly in the middle for price compared with other vendors the retailer considered, Barnes says, but the platform offered more tools the e-retailer deemed valuable to its operations. Those included a pre-built integration with Canada Post, Canada's equivalent to the U.S. Postal Service, that allows Laura Canada to ship packages to any post office for pickup.
"Starting with a basic, inexpensive system doesn't always work—you outgrow it a year later," Barnes says. "We're not Ann Taylor in terms of resources, but we'd like to compete with them." Women's apparel retailer Ann Inc., formerly Ann Taylor Stores Inc., generated $248.3 million in sales on the web in 2011, making it one of the top 25 e-retailers of apparel and accessories in North America.
E-retailers shopping for an e-commerce platform are finding options that go beyond making a web site work. Platforms today often incorporate as standard features more tools designed to serve retailers' broader needs, says John Kinsella, vice president and senior consultant at FitForCommerce, an e-commerce strategy consultancy that helps e-retailers evaluate technology tools and vendors.
"Platform providers are including more functionality and pre-built integrations in order to facilitate the launch and differentiate their product offerings," he says. "For example, all providers need to address mobile, product content and social media. Those brands with retail stores also need to consider clienteling, enterprise fulfillment, centralized customer databases and customer relationship management."
This means retailers have more to consider when selecting an e-commerce platform. Laura Canada took ample time to find an e-commerce platform that met its goals and budget. For other retailers, getting online as fast and simply as possible may be the goal. Whatever the case may be, experts say e-retailers should evaluate their own needs and goals and ask platform vendors some hard questions about how they'd work together to meet them. They will likely find e-commerce platform providers are starting to anticipate some of their key requirements, helping them to launch on a stronger foundation from the start.
Size and price
An e-commerce platform provides the basis of an online store, at once controlling the outward-facing web site consumers interact with while connecting to back-end systems such as point-of-sale, customer relationship management, order management, content and inventory.
Kinsella says e-retailers should first think about the customer experience they want to provide consumers, then write down the features and functionalities that would require. Then score those options from must-haves to nice-to-haves. That approach helps e-retailers to identify vendors with the right integration packages—and keep them from overbuying.
E-commerce platforms such as those from IBM Corp., Oracle Corp., Microsoft Corp. or BroadVision Inc. may offer many features, but they can also cost tens of thousands to millions of dollars with implementation costs factored in, and are geared toward the largest e-retailers with the deepest pockets. OrderDynamics, which targets its platform to mid-sized retailers, costs between $5,000 and $15,000 per month, and some platforms aimed at smaller retailers cost much less. For example, vendors Bigcommerce Pty. Ltd. and Volusion start at $25 per month and $20 per month, respectively, and rise into the thousands based on the number of products on the site and how many administrative accounts the e-retailer wants.
Kinsella's advice for evaluating platforms, however, is the same for all retailers. He says e-retailers should assess an e-commerce platform on three fronts: the functionality it has and is capable of, what role the e-commerce platform vendor will play in platform developments, and what the vendor will be like to work with. How platform vendors measure up against these needs will help e-retailers determine if the fit is right.
Kinsella recommends plotting out the must-have features for the next three to four years, providing the vendor eight to 10 goals it would like to accomplish. For example, a retailer may aim to expand internationally or launch mobile commerce.
"With the long-term goal in mind, then the components of the plan can be phased in thoughtfully to optimize the investment in technology and ensure the organizational capacity," he says. "Otherwise, layering in technology with no long-term goal may lead to poor investments and unsuccessful implementations."
This can help an e-retailer understand what the platform is capable of and what a vendor will be like to work with, he says. "It's one thing to have a new function but another to implement it in a smooth, adapting-to-change way," Kinsella says.
Laura Canada's Barnes says the retailer's first priority was to find a vendor with a stable core platform. The retailer knew it could add extra modules later. However, OrderDynamics' integration with CanadaPost was a plus that played a role in its selection. The e-retailer only ships within Canada, and CanadaPost is the biggest carrier in the country. Not having to build a link to CanadaPost meant Barnes could focus on the kinks that come up in nearly all e-commerce platform implementations. For example, Laura Canada calls one clothing line "knitwear" internally and "sweaters" in stores, but for OrderDynamics to integrate the retailer's point-of-sale and merchandising systems, the label needed uniformity. Barnes says that took some time to update.
Free still costs
International Military Antiques, which started selling original and replica antique military goods online in 2009, took a test-and-learn approach to picking an e-commerce platform. It started in e-commerce using the free Community Edition of Magento's platform, but eventually moved to the paid Enterprise Edition, which costs the e-retailer less than $1,000 per month but offers more pre-built capabilities that he wants to use. Those features include marketing promotions and newsletter applications, a fuller content management system, full-page caching—which helps improve page load time and thus site performance—and about twice as many reporting capabilities as the free edition. "It's much more robust," says Alex Cranmer, International Military Antiques' vice president.
The move to the paid edition came on the advice of International Military Antiques' web development services provider CorraTech, a company that focuses exclusively on web development with the Magento and hybris e-commerce platforms.
With all the integrations Cranmer wanted to add to the free platform, it would cost him more to have CorraTech build them from scratch or fix bugs integrating ones from Magento's marketplace than to foot the bill for the Enterprise Edition, which had many of the integrations ready-made. Cranmer says he was paying CorraTech more than $1000 a month to work out bugs in the free platform that were already fixed in the paid version, so the move made sense. Since switching to Enterprise, the e-retailer has added extensions to upgrade the stock image viewer and the abandoned-cart e-mail generator, Cranmer says.
Magento, which is owned by eBay Inc., doesn't work directly with e-retailers on development issues although it does offer some packaged support services for merchants and developers working with its code. Retailers on the Magento platform typically hire outside web developers to build or integrate features, or do the work in-house. How much hands-on responsibility a retailer wants to take with a platform is another consideration to take into account when evaluating platforms. Cranmer says he is happy working with CorraTech and leaving support issues to that company to sort out with Magento.
Before choosing Magento and CorraTech, Cranmer looked into alternates by asking five other developers to walk him through sites they'd built on three or four other platforms. Building an e-commerce web site is like building a house, he says. In this case, Magento is the architect and CorraTech is the contractor. "This shouldn't be the first house they've built, nor the first for this architect," he says. "You should only have developers who know it and are certified in it."
Speed was a key factor for Triumph Motorcycles Ltd. when it selected an e-commerce platform. The retailer, which sells motorcycles and gear to dealers and consumers, was unprofitable when it decided to restructure its North American business two years ago, says Matt Sheahan, vice president of sales and operations.
In addition to needing an updated warehouse, distribution and fulfillment infrastructure, the merchant sought an e-commerce platform that would integrate all inventory and allow it to sell wholesale and direct-to-consumer via dealers' franchised web sites, a corporate web site and on Amazon.com, he says. The company had to find an e-commerce platform provider that could do all that, on a budget and fast, he says, to help cut mounting losses.
The merchant began by revamping its back-end infrastructure with UPS Logistics and Distribution, part of United Parcel Service of America Inc.'s supply chain services for businesses, Sheahan says. Shortly thereafter, UPS told Triumph about its new integration with Bridgeline Digital, which provides an e-commerce platform, called the iAPPS Product Suite.
Because Triumph was already integrated with UPS, it stood to save a lot of time and money implementing Bridgeline for e-commerce, Sheahan says, although he declines to say how much. After looking into a few other options and determining that, in addition to the UPS integration, Bridgeline iAPPS also offered the marketing and analytics functions Triumph needed, the merchant signed the vendor and launched in 90 days. Additionally, the platform offered Triumph an easy integration with Amazon's marketplace, Sheahan says, which the retailer was eager to join to expand its customer base and grow brand awareness.
"The flexibility and speed with which they've been able to react to what we need in a very tight timeframe has been remarkable," Sheahan says. "You really need a partner who is empathetic to your business."
Bridgeline's e-commerce customers spend an average of $150,000 to $250,000 in the first year of service, which covers initial site development and software fees, then $85,000 in subsequent years for continued service and maintenance, the company says.
During the initial development stage, Triumph asked Bridgeline to customize a few elements of the e-commerce platform, Sheahan says. Triumph needed the platform to accommodate motor vehicle sales laws, which vary by state, and allow for the site to redirect visitors to local dealers' own e-commerce sites if the consumer entered a ZIP code nearby one, he says.
Laura Canada made similar changes working with OrderDynamics. One change involved adjusting the vendor's loyalty program module so the retailer could validate customers' membership numbers against its customer relationship management database.
"We were really happy with the team OrderDynamics put together to help us get online, but even then there's a learning curve for them to understand the business and its quirks," he says, referring to the fact that each business has its own way of operating, as with Laura's loyalty program. "You really need to ask a lot of questions, do your homework, see specific examples and follow through with them to make sure what you're asking for is what they're really delivering."
When chosen well, an e-commerce platform not only fits a retailer's basic needs, but it comes ready to fulfill extra requirements with ease and speed.