June 25, 2015 | Written by: Guest
Categorized: eCommerce & Merchandising
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The following is a guest post by Jerry Lewis, VP Commerce Platforms and Client Strategy at Astound Commerce.
With the ever-growing list of software-as-a-service (SaaS) and cloud-based providers of e-commerce solutions, it’s becoming difficult to understand all the options, let alone differentiate among them or choose from them. A Google search for “cloud e-commerce providers” yields a dizzying number of results. And that’s just software. When combined with the choices among firms to help build the solution, we’re talking thousands of options.
I try to bring some clarity to this opaque topic by identifying five critical criteria for choosing a cloud-based e-commerce solution. These criteria will help you to focus on factors most critical to successfully running your e-commerce business in the cloud.
We presume you understand the difference between cloud-based and on-premise commerce solutions. If you don’t, the simple explanation is that on-premise solutions involve your own infrastructure and a team to manage that infrastructure, whereas with cloud-based commerce, you outsource all of that.
How to pick a cloud-based e-commerce solution
1) Evaluate the complexity of your ecommerce shop
- Does your catalog span many diverse categories like a Costco, or is it simple?
- Do you conduct business internationally and, if so, do you need currency, tax, language and other elements of localization?
- How often and how significantly do you change your catalog of products and prices within it?
- How many back end systems do you have and do you need data to move between them?
- Are you a multi-channel merchant?
- How promotional are you?
If your business or e-commerce needs tend toward the complex end of the spectrum, you must be careful to select a solution that accommodates this complexity or you will find yourself wanting to re-platform soon after launching and operating your store. If, on the other hand, “simple” works for you and your business, then look for a solution that matches that simplicity. You’ll save time and money implementing and maintaining your shop.
2) Volume of traffic and transactions
Perhaps you are a large manufacturer with low traffic volumes from only 300 primary customers and no seasonal or traffic volume spikes. On the other hand, you may be a retailer where Cyber Monday and the run-up to Christmas or ‘back to school’ make or break your year. If your operation is large, complex, or subject to traffic and transaction peaks, you need to consider a solution provider that scales dynamically according to the demands placed on the system.
For traditional on-premise e-commerce solutions, scalability can be a problem–both complex and expensive to solve. In addition, on-premise solutions require significant investments in both IT staff and infrastructure. Cloud-based commerce solutions offer key advantages here in that they can scale dynamically to accommodate increased loads and they minimize the need for incremental IT spend because the infrastructure is provided by the vendor, not you. Make sure you ask the vendor which of its current clients have business models and traffic patterns like yours, and then talk to those clients. If the vendor won’t provide the names of the clients or facilitate conversations with them, find a different vendor.
3) Single tenant vs multi-tenant
Many companies shy away from cloud-based e-commerce solutions under the impression that they give up data security and data segregation. The truth is that there are multi-tenant, single-tenant, and, for lack of a better term, partial-single-tenant solutions that offer a high level of data security. A multi-tenant solution leverages a common infrastructure for all tenants, or for groups of tenants. These vendors usually operate at the lower-end of the spectrum, and provide template-based solutions with limited options for customization. As you move toward middle and higher-end solutions, some or all of the e-commerce solution will be segregated, and you will have greater flexibility in customizing the solution to meet your particular business needs. Be sure to ask your vendor to describe their solution architecture, so you know what is and what is not shared among other subscribers.
4) B2B vs B2C
What kind of business models do you support? Do you sell direct to consumers? Do you have field salespeople that sell to shops that sell your products? If the answer is that you sell only to consumers, you have it easy, as most of the cloud-based commerce solutions are focused on B2C business models and everything attendant to them.
If, however, you support any of the B2B or B2B2C models outlined above, the solutions are fewer. Be sure to ask prospective vendors how their solution handles your particular B2B use cases, and talk to that vendor’s B2B clients to verify the answers.
Another important consideration is how the vendor charges you. Revenue share, transaction volume charges, or tiered flat fees are some examples. B2B ecommerce ROI models usually cannot tolerate revenue share for various reasons, so the answers to these questions are key facets in narrowing the solutions that work for B2B merchants.
5) Supporting multiple sites and globalization
Does your business operate in multiple countries today, but you only do e-commerce in one of them? It’s almost a certainty that you will eventually do commerce online in the other countries you serve, but are you ready?
If a vendor claims they do multi-sites and globalization well, ask them:
- To show you examples of customers who have done so.
- How much customization was necessary to get the new countries or sites live?
- What are their localization capabilities? Do the page templates support multiple layouts by country or language?
- Do their storefronts dynamically respond to deliver content on any device?
- How are integrations to payment, tax, shipping, reviews, social, and other vendors managed?
These are all important considerations for picking a vendor that can support your multi-site and globalization strategies.
While we’ve done our best to describe the most critical characteristics in selecting a cloud-based e-commerce vendor, your business may be an outlier and have characteristics that trump those above. If this is the case, share the details of your business model with prospective vendors and ask them to complete an RFI (request for information) as to how they can help meet the unique needs of your business.
Comments? Questions? You can reach me via email: firstname.lastname@example.org or via LinkedIn.
About the Author
Jerry Lewis, VP Commerce Platforms and Client Strategy, brings more than 15 years of e-commerce experience gained across a variety of technology platforms and industry verticals. He is responsible for global sales, solution delivery, client strategy and channel management at Astound Commerce, which has been an IBM Premier Business Partner since 2004 and was the first Business Partner certified to host IBM WebSphere Commerce as a service. In 2014, Astound was recognized in by IBM at its Global Summit in Monaco as “Ready for Smarter Commerce.”