Rewards, Risks of Changing Ecommerce Platforms
There are many reasons that ecommerce companies change platforms. As their business grows and market conditions change, ecommerce firms sometimes replace components or the entire platform to remain competitive.
But replatforming is expensive. It typically requires a large investment of time and money. It also carries a great deal of risk.
A well-executed replatform generally leads to increased revenue and operational efficiencies. A poorly executed one can put a company out of business. Merchants should therefore think long and hard about changing platforms.
In this article, I’ll review common reasons to change platforms.
What Is an Ecommerce Platform?
An ecommerce platform provides the technologies to build an online storefront. A platform can be an all-in-one set of technologies, or a single component to integrate with other platforms. Critical ecommerce platform components depend on a company’s size and its specific needs. Here’s a comprehensive list.
- Content management. To manage content — text, photos — and non-product related information.
- Search. This is critical, to deliver the type of customer experience that shoppers demand today. Most shopping carts are weak in this area.
- Shopping cart. For registration, checkout, and payment management.
- Product management. This may be a product information management system, an enterprise resource planning (ERP) system, or simply a content management system. In all cases, it is where you manage your product information that will be presented to your customers.
- Pricing. This component manages pricing for your products. In B-to-C, this is relatively simple for a single online store. It may be complex for multi-channel selling. For B-to-B, this is typically highly complex with many tiers, customized pricing, and business logic.
- Order management. This component manages an order from receipt to delivery, allowing merchants to make changes, choose shipping carriers, manage the fulfillment process, and so forth.
- Payment systems. This may include gateways for credit card processing as well as alternative payment systems like PayPal, Google Wallet, and others.
- Inventory management. This allows merchants to manage product availability. In today’s markets, this should support multichannel availability.
- Business logic. The platform increasingly should support business rules for different types of customers. This is more critical in B-to-B commerce than B-to-C.
- Merchandising. This includes personalization, complex promotions, recommendations, up-sells and cross sells, A/B testing, and other advanced merchandising.
- Social management. This is an emerging technology to harness social platforms that influence consumer buying decisions.
- Integrations. In addition to the components listed above, many merchants require a platform that connects or integrates with other systems, such as accounting, customer relationship management system, marketing automation systems, analytics, and more.
Smaller ecommerce stores frequently have an integrated system that focuses on content management, web page delivery, and taking orders. As they grow, these stores often add order management systems, inventory management systems, and other components. They may eventually require integrated systems with more functionality across all these areas.
Why Change Platforms?
Here are common reasons to change platforms.
- Improve customer experience. This may include better search and navigation, improved speed, better merchandising, better images, one page checkout, mini-carts, and dynamic landing pages.
- Mobile. Support for mobile devices or responsive designs.
- Market conditions and opportunities. Addition of multi-site or micro sites, multichannel sales, more products in your store. Any type of requirements that arise because of new opportunities.
- Improve key performance indicators. This can include simple things like improving average order value, increasing conversion rates, better search engine optimization, and lowering bounce rates.
- Platform shortcomings. Lack of scalability to support your future business, obsolete technologies, poor integration.
- Integration requirements. Addition of new components that require integrations — such as content management, customer management, order management, and advertising — to backend or frontend solutions.
- Cost. These can include hosting costs, hardware investments, human resources. Anything that may be negatively impacting your business model.
Where to Start?
Never change platforms without a clear strategy of where you want to be in, say, three years. Establish specific objectives. Define how you will measure success.
Analyze your current platform and your company’s strengths and weaknesses. Establish how a different platform can help take advantage of opportunities and eliminate weaknesses. This will lead to platform requirements, including customer experience needs as well as your functional and technical requirements.
Talk to other ecommerce business owners about their experiences. Identify the potential solutions that are in your budget and in your ability to implement and support.
Finally, research and engage with vendors. Be sure to have your business objectives and platform requirements defined upfront. Recognize those objectives and requirements will likely change as you learn more about the vendor options. Don’t let vendors take you too far from your initial vision.
There are many risks in a replatforming project.
- Takes time and money away from your core business.
- New platform may impact your business processes. Retraining of staff will likely be required.
- Search engine optimization. Plan to lose traffic initially, especially if the URLs of your new store change, which is likely.
- Integrations are usually far more complex that they appear. Prepare for delays and budget overruns. Build delays into your plan.