We all know that eCommerce has transformed the ease with which we find and exchange goods and services. Some of us can barely stand the thought of having to go to a physical store for most purchases. It’s just become so easy and relatively painless to shop online. This is proven by the data. According to Big Commerce, “Sales in online stores are expected to reach 22% of global retail sales by 2023, compared to 14.1% in 2019.” Over the same period that the experience has improved greatly for end users, a similar transformation has taken place for companies launching their stores online. In this article, we aim to explore the evolution of eCommerce from the perspective of the company creating and managing its eCommerce presence.
Initially, any company that sought to sell goods online would need to take on the entire ball of wax, including infrastructure (web servers, databases…etc), architecture, user experience, design, support systems, and everything else required to launch a store. There were no tools from which to choose, so everything had to be built with a significant outlay of time and expense. All these systems then had to be maintained and updated, making the barriers to entry for any company with a desire to sell products online very high. This is partly why nearly 70% of the market is still controlled by less than 15 retailers; most had an early start when barriers to entry were very high.
As the market progressed and many offerings were developed to manage payments, customer success, infrastructure, and security, the barrier to entry steadily decreased, making e-commerce possible for many new entrants and facilitating a much healthier level of competition. At this stage, the barriers were lowered, but most companies were still having to design and build their own front-end and CMS, testing and refining their user experience and conversions metrics along the way. This meant that most companies were on simultaneous journeys to uncover and deploy the same foundational best practices before they could get to the really rich and nuanced adjustments relevant to optimizing their specific businesses. Yes, the barriers to entry were now lower, but the market was still inefficient because there was an enormous amount of duplicated effort with very little collective benefit.
Whenever there are repeatable and common themes in a market that have not been properly organized, there is a business opportunity. This was the case for eCommerce as platforms like Shopify, Magento, WooCommerce, BigCommerce, and many others developed license and subscription-based platforms that enabled companies to develop and deploy stores online quickly. These platforms were transformational because they enabled companies from startup to enterprise stage to leap over infrastructure, content management system development, SEO, best practices for user workflows, and even the need for engineering resources in many cases. eCommerce platforms became the inflection point in the history of retail offerings online when virtually any person or company with internet access and a way to ship something could open a store online. Setting a basic store up online transitioned from months to hours. The days of toiling away on the foundational components of an eCommerce launch were over, leading the way for millions of new entrants worldwide.
So far, this sounds like a Cinderella story, and it surely is, but the opportunity created by the democratization of eCommerce created a new opportunity for companies as they evolve their offerings. With the fundamentals essentially offered out-of-the-box, product teams could now focus on refining the user experience in ways specific to their business models, the integration and optimization of the dependent operational systems such as warehouse and inventory management tools, and plugging into more complex workflows that address new business opportunities. These are the activities that companies or product divisions in a growth stage often need to address to pursue and sustain growth.
Using the analogy of building a house, if a homeowner is able to buy a spec home for a fixed price, there is a substantial cost, speed, and risk reduction benefit. However, once the homeowner moves in and starts living in the house, they may decide to tweak a few things to their preferences: move a few walls, change the color palette, or build an addition. Although they sidestep a huge risk by buying a spec home at a fixed price, eventually, they may need to hire specialists to design and build out these additional features to suit their needs. The same can be applied to outgrowing native eCommerce platform functionalities. Using an ECommerce Platform like Woo Commerce, Magento, or BigCommerce is a no-brainer because it enables a company to launch a store within a fraction of the time, cost, and risk vs building from scratch. This translates into generating revenue faster, acquiring customers sooner, and starting to identify opportunities to grow the business. As the business grows, so does this list of product enhancements, user workflow ideas, and operational complexity. Initially, the platforms may have offered all the integrations necessary for the operation, but as workflows become more nuanced and previously acceptable out-of-the-box operational tools are replaced with more customized tools, there is inevitably a need to address functionality that is not native to any eCommerce Platform.
Most platforms will be able to not only give you a clear understanding of their capabilities upfront, but they can also share a complete list of integrations that are essentially plug-and-play. Take the time to create your requirements and match them up to the best platform, because they are distinctly different. If your eCommerce effort is early, it may be wise to build the first versions around the native capabilities and existing integrations to save time and money. For these efforts, it’s possible to hire “Certified Implementation Partners” from a list provided by the eCommerce Platform who can assist with executing your build. However, once your enterprise or product group has grown out of the native functionality as described above, it often becomes inevitable to need some custom software design and engineering to satisfy your evolving requirements. Implementation partners may be willing to take this work on but are rarely staffed with engineers. Since the implementation of native features does not require coding skills for the most part, these firms are usually outsourcing engineering needs, sometimes without the direct knowledge of the client. The chain becomes too long, compromising execution and accountability greatly. If you are starting to feel uncomfortable, your instincts are correct.
The good news is that being aware of the difference between native and custom execution up front gives leaders the ability to hire the right partners at the right time. Native execution should cost less than custom-built components. Inversely, custom-built components should be treated like software development projects with a full requirements analysis, specifications, and estimates created by a qualified team of project leaders and engineers. Back to the home analogy. You would not hire your painter to design and build your addition. There are very different levels of complexity and skill required for these tasks, even though they are both “home improvement.” Don’t get me wrong, a good painter is worth their weight in gold, but they are not trained to design and build your addition with all its complexity.
It’s a great time to jump into eCommerce and launch your company store. The tools are better, faster, cheaper, and more flexible than ever. If you’ve got a good product and a clear line on reaching your market, eCommerce can accelerate your growth rapidly. Just be careful to recognize when it’s time for native functionality and pre-built integrations versus when it’s time for customization based on an evolution of workflows and operational capabilities required for your growth.
REEA Global is a global, full-service user experience research and software development firm. For more information or to talk to one of our specialists, contact us at email@example.com.
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