What Is an Ecommerce Platform and Why Do You Need One?
By Craig Harper-Ashton, Multichannel Director at Salmon
This article will discuss what an ecommerce platform is and the importance of platforms for any business serious about their ecommerce operations.
This piece is the first of a series that I've written for IMRG (the UK's Online Retail Association), in which I’ll be discussing:
- How companies can utilise the latest in AI and machine learning to improve their customer experience
- The challenges and benefits of switching ecommerce platforms
- How to choose the right technology partnership to drive sales
- CX and the top technologies for ecommerce and wholesale businesses to invest in over the next five years
Ecommerce platforms and online retail today
I can’t think of an industry quite like retail at the moment: the shift to digital, the rise of mobile shopping and the continued shift in favouritism from brand loyalty to service loyalty.
Amazon, for example, is expanding its offerings across baby care, live music, fashion and groceries. That’s not to say bricks and mortar stores are dead ducks; simply, businesses have had to reinvent what and how they offer their services to keep up with market leaders.
But what have platforms got to do with this?
Fundamentally, ecommerce platforms are the backbone of any online retail enterprise, allowing the front-end and back-end to work in tandem and efficiently. ecommerce platforms are the girders of the ecommerce building, providing a rigid structure on which a B2B or B2C ecommerce enterprise is supported.
They don’t just support, though: they are a growth enabler, through which an organisation can expand its ecommerce offering, provide seamless customer experience and control its own destiny.
Pre-platform pain points
We’ve heard of the old adage that if you fail to prepare, prepare to fail – this couldn’t be more pertinent than in the fluid world of ecommerce. Having the right platform is crucial to the way companies streamline the way clients, customers and employees interact.
Put simply, a platform is the software that allows a business to perform complex functions both in the front and back end of its operations. This includes inventory management, warehouse fulfilment, CRM, customisable web design, integrated M-commerce (mobile commerce) functionalities and many more functions that power an online business.
Before the dawn of specialised platforms, ecommerce solutions were generally costly enterprises set up laboriously by the IT team and in-house development teams. They were unscalable, time-costly, challenging to manipulate and difficult to integrate with other software across the business.
Data has turned pain points to plus points
But these pain points have been vanquished; data is now one of the main drivers to successful enablement of a platform. Think of data as the building blocks of a platform – it truly never comes alive until it is fed with data. Products, pricing, inventory, customer specific contracts, promotions. All of this data bounces off the product and customised code, and gives you a sense of how the system responds in real life.
Introducing data right at the beginning of a platform implementation project means companies avoid the pitfalls of elongated test cycles at the end. One of the most common mistakes in ecommerce projects is to build it before the data is available. According to a report by McKinsey, only 26% of digital transformation efforts deliver performance results above expectations. Making sure you have the right data, married to the right application and the appropriate interfaces (ie. how you get at the data) is a recipe for platform success.
Guidelines and tips for best practice implementation
Before you think about selecting a platform vendor, think about what your vision and business objective is. Let that decision shape the evaluation of the platform and an implementation partner you trust shape the platform decision – you should consider both together. The right platform is the one that allows you to build the house at the best quality, for the most “realistic cost”. And don't believe the sales hype, usually its not the platform or the implementation cost that's the highest. In our experience, the items that drive time and cost are typically:
It’s also often the case that overall project costs increase when key decisions are taken out of sequence.
Here are a set of guidelines on best practice ecommerce implementation:
- Start with a vision that articulates the strategic direction of your ecommerce plan. You should craft this with involvement and feedback from your customers.
- Develop an architecture that supports your vision. Identify your data and develop your interfaces before you start on implementing what customers see.
- Select an implementation partner that is the most likely to be able to take the vision and implement it in all its vivid detail. Choosing a partner with prior experience of implementations of your scale, and in your market, is extremely important.
- Select a platform that fits best with your vision and business processes. Evaluate it against these, not just against other ecommerce platforms.
And here are four of my top tips for a more open approach, should it be required:
- Listen to your customers and collaborate with them. Give them a voice in the vision and design, rather than proceeding on the basis of what you think they need.
- Develop for flexibility. Use modern techniques such as microservices, a DevOps approach to automation, and develop interfaces that can be used by any system including the ecommerce platform.
- Strive for results, not perfection. Make compromises to reduce complexity – if you need to feed price data to ecommerce to make it work, then do that instead of insisting it call a price service API (and fits a perfect architectural solution).
- Let the chosen platform become an opportunity to hone and sharpen your business processes. If you try to bend the system to the way you work, rather than optimising the way you work to fit your chosen platform, you’ll create a larger, more costly and less flexible result.
The threats and the future
Unfortunately, there’s no crystal ball that can accurately predict the future – not least the ever-changing technology sector – and certainly not with a high degree of confidence. For many businesses, this can mean many feelings of uncertainty. A high degree of businesses seem to underestimate, or are ill-prepared, for the technology of the future. Nearly a third (29%) said they don’t have the technology in place to cope with emerging trends in the next five years, while 55% state keeping up with new technology to satisfy customer demand as a new concern.
But forget competition with other ecommerce or wholesale manufacturers; many are genuinely concerned that they might not have a future at all. Amazon, the stalwart of the retail industry currently, represent a real threat to businesses, with 38% concerned about the rapidly-expanding American company and other ecommerce giants. Perhaps unsurprisingly, B2C organisations are far more concerned about this (42%) than B2B organisations (28%).
To combat these concerns, organisations really should start to bolster their ecommerce offerings with a platform capable of delivering the business’ needs.
Truthfully, ecommerce platforms have come a long way in the past twenty years and right now, we’re seeing the first “refreshing” of ecommerce properties – the dumping of depreciated investments that have been in place for five or more years, in favour of new platforms that enhance capability and reduce cost. Frankly speaking, no business should ignore the value of investing in an ecommerce platform.
If you fail to prepare, prepare to fail; stay ahead of the ecommerce platform game.
Register for Salmon’s webinar on ecommerce platforms with Forrester.
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