Looking ahead to 2018, it’s both an exciting and challenging time to be in ecommerce for retailers. On the one hand you had massive closings and consolidations in 2017, while Amazon opened it’s first brick and mortar, seemingly defying the notion that retail is going away any time soon.
Then you have the virtual reality industry which is poised to dramatically change consumer shopping. One a distant sci-fi dream, tv shows and movies alike “Black Mirror and “Otherlife” provide a glimpse into what virtual reality experiences could be like in the not so distant future. It also brings a much needed reality check any business that cannot adapt and evolve with the ever changing technology.
On a daily basis I speak with merchants who struggle to compete with Amazon, Walmart, and other large players in the space. These merchants are not your small mom and pop shop, but 20, 50, and even some cases 100 million dollar companies. Competitive prices, operations logistics, and inventory management performance issues are just a small aspect of what these small to medium businesses will continue to face into 2018.
There is a glimmer of light however. Despite the challenges, these businesses will continue to invest in new technologies in 2018. According to Gorilla’s group 3rd annual business leaders survey, 82% of ecommerce investments will be allocated to Marketing functions or infrastructure, with only 18% to operations and Sales Resources.
The Business Owners Dilemma:
Technology is a great enabler – at least on the surface. As a business owner you read the articles, stay up to date with the latest systems with the goal of being faster, stronger and quicker than your competition. Yet year after year, your competitors seem to be outpacing you, or at the very least getting to market earlier and acquiring customers at a faster clip.
For some time now you have wanted your company to move from your legacy 90’s or early 2000’s ecommerce system, (ie. OsCommerce) to a more updated one. If this is true, then hopefully what you read below will help you determine what the right ecommerce system for your business will be.
There are many online articles comparing the difference between Shopify, Magento, Hybris, Spree Commerce, Volusion, WooCommerce, and Netsuite. It’s no wonder business owners have trouble making a platform decision.
At our fashion company, we based our manufacturing in the Dominican Republic and NY and shipped 50% of our merchandize to Japan. When I came onboard, the company was using Shopify as the ecommerce platform. At the time Shopify was not as large of a player as it is today. We moved from Shopify to Interspire (pre-Bigcommerce), and then finally to BigCommerce.
We knew there was no platform on the market that would be perfect for our needs, but didn’t have the budget to build a complex system from scratch. We had complex inventory needs that involved two warehouses in separate countries. We ran a cost analysis, which included identifying the payback period and prediction on whether the vendor would still be in business or maintain its innovation 10 years from now.
We knew that in order to appropriately invest in IT, we needed to set an annual budget, make a smart investment, and stick with it through the long haul. Through the process, we learned quite a bit about ecommerce platforms and capabilities, and specifically how to determine when it’s time to move to a new platform.
Time To Move On
The decision to choose a new platform should come from a thorough understanding of your business and operational needs, your current staff and their skill sets, and what holes you need to fill to stay competitive.
Cheap doesn’t mean you’re getting a great deal/Expensive doesn’t mean the software if of high quality
An investment means that you are making a long term commitment, not looking for the quick home run. While your annual budget doesn’t need to be in the millions, setting aside a realistic budget is important. Don’t only consider an investment in the technology, but an investment in your employees. Finding a trusted staff member who can run the online operations for you will free up your time to run the business.
I am a big believer that entrepreneurs and business owners primary responsibility should be bringing in sales, talking to customers, and increasing the value of the company, not figuring out whether they should upgrade to the latest version of PHP.
In speaking to business owners, one of the first conversations I have with them has to do with risk management. The truth is that choosing a vendor, whether it’s our platform or another solution comes with inherent risk. That risk can either be shifted to a third party company for a monthly fee, or managed internally by your support staff.
What’s Driving Revenue?
When you consider the difference between WooCommerce, Shopify, and Magento, Hybris, you’ll need to have a solid grasp on the metrics or processes that are driving your revenue. Only then can you better assess which ecommerce platform will enable your employees and processes to be more efficient.
Let’s take a real world example. A couple of weeks ago, I had the privilege of working with Returnly, which is an application that works across multiple ecommerce platforms for merchants wanting to provide a rich amazon like returns experience for their customers. Many companies dream of implementing an amazon like returns process and spend hundreds of hours customizing a system like Magento or WooCommerce to make that happen. Instead of focusing on the customizations, using an app like Returnly could save an incredible amount of time in the process.
First however, as a company you need to assess how important having a solid returns process is to your bottom line. This is where a cost/benefit analysis works best.
Top line and bottom-line cost are two metrics many CFO’s uses to create financial models for their companies. Given that WooCommerce, Shopify, and Magento, and Hybris are pieces of software that all have their inherent cost models, let’s look at the one component that really drives the cost for an ecommerce implementation – The Partner.
Each software vendor has a preferred list of partners they like to work with. You can even review hundreds of a vetted agency partners at Agency Spotter or Clutch Reviews. Given that your project will fail or succeed based solely on the people performing the implementation, you’ll need to identify the people who will be working on your account.
Visit the company on Linkedin, and browse the employees’ profiles. This will help you identify who exactly could be working on your account as well as their skill sets and qualifications.