Key Aspects When Choosing an E-commerce Platform

Choosing a platform is something that causes a great deal of anxiety for most people launching an e-commerce business. We’ve asked Yvonne Karolin, who has experience from companies such as Fjällräven, to share her thoughts on how she approaches platform selection. This is the second article in her series on e-commerce.

I want to reflect on the approach to choosing an e-commerce platform, and my hope is to offer you ideas and perspectives that might inspire you to approach this process differently the next time you make a choice.

The choice of an e-commerce platform today is often based on the need to meet a variety of requirements through a set of system capabilities, which likely includes a long list of functional requirements. These capabilities fall within different functional areas that a company needs to run its e-commerce operations. There are often other aspects of functionality that influence the choice as well. Examples of these include the platform’s level of customization for adapting to changing functional needs, its technical architecture, and its ability to integrate with other systems. Other important capabilities to consider when making the choice are research on the company that built the platform, its future development strategy, partnership strategy, and support for maintenance and upcoming upgrades. Of course, and not particularly surprising, cost (hardware, licenses, and implementation fees) is also a decisive factor in the choice. There’s nothing unusual about these criteria for selection.

The choice of an e-commerce platform involves a lot of considerations. In some cases, the choice is made in other ways and with more combinations of decisions. In larger companies, several business departments and stakeholders are involved in the platform selection, each with different focuses and strategies that must be followed. For example, it might be the IT department, where all development has already been decided, and it has been determined that it should be based on a ‘Microsoft foundation’ with .NET, while Java is not preferred. All integrations may have been decided to occur through a single integration engine. Some companies may have ambitions to implement service-based development and want to create services from various information flows, SOA (Service Oriented Architecture, a distributed IT system of communicating services).

Perhaps the decision has been made that all development should be outsourced to a third party, or that development should only be handled by a single consulting partner to achieve economies of scale and the best price. Already at this stage, the choice of an e-commerce platform could be decided, and other aspects might not weigh as heavily—functional aspects might take a back seat.

In many cases, the e-commerce platform selection starts by researching and diving directly into a few platforms that present themselves in a series of demo meetings. It is crucial that you, before the demo meeting, have thought through and anchored your own business architecture (how you work or intend to work) and your goals initially. It’s easy to become blinded by what you think the platform can do, and during the demo meeting, questions must be raised that cover the relevant areas.

Also, consider that the platforms available on the market today are ‘old platforms,’ and see this with positive criticism regarding their design and support. They were developed with their foundations in the late 1990s and early 2000s: Hybris (1997), Intershop (1992), Magento (2008), IBM Websphere (1998), Demandware (2004). And do you remember how things worked back then? I just want to take a brief dive into ‘the old days’ so you understand my reasoning about ‘old platforms’ and the need for critical thinking architecturally.

Back then, in the late 1990s, e-commerce was entirely new. Most retailers had B2B (Business to Business) product pick-up in their warehouses. All goods were efficiently packaged in retail boxes, each containing 20 consumer-packed items (or more). The retail package went directly to the store or reseller for unpacking, price tagging, and sales. Sales were in-store. To get started quickly, platforms were built with modules supporting inventory management, order management, platforms supporting product enrichment, and platforms handling everything an e-commerce system for sales to end customers needed functionally. It wasn’t so difficult. Since many of these ‘old processes’ were things that several of these system providers recognized and had worked with for years. Many of the founders of these e-commerce platforms actually came from the retail and business systems industry.

And yes, that was great. Back then. Because companies could quickly start selling to end customers. Businesses didn’t have to think too much about processes or change things from the ground up. It was fast to set up a silo for digital sales.

The ‘old platforms’ are good at selling themselves, and it’s ‘easy’ to choose based on that. And sure, it feels safer with a lot of references and a long development history that supports all processes.

Yes, I am positively critical of today’s platforms due to the above reasoning, but I also understand their strengths. And there’s nothing else available today. The choice of an e-commerce platform is often made with this in mind.

So, how should we proceed? As I have discussed earlier, it is crucial to establish a set of basic prerequisites when making your choice. Goals for e-commerce. Business-wise, quantitatively, and qualitatively. Anchor these within your leadership team. Define your business architecture and then anchor it within your IT architecture. It is important to choose the right platform from a business perspective. Let business goals guide the decision, not internal departmental strategies. It sounds simple and precise.

Draw up your IT architecture early, based on your business architecture, and determine where your significant business flows should functionally lie. Sit down with your IT team and discuss the pros and cons early on. Should it be a solution installed on your own servers, or should the solution be handled in the cloud as a SaaS (Software as a Service)? Or should you look for a platform that is something in between? Establish a base for how your technical architecture should look. Don’t just look at the e-commerce platforms that are ‘out there today,’ but look at your own systems and internal processes you have now, and what you need to change to increase your sales. How do you need to adapt your business models?

Next, model the major business flows for e-commerce. Look at where information is created and maintained (in which systems) and consider how everyone working with these flows today might need to change in order to achieve your goals. Think about which functions are essential to support these flows in the best possible way.

This is business development, and I want to emphasize once again that it should be elevated to the management level and understood in relation to the goals. Consider the flows from a sales perspective and the optimization of them.

Examples of flows you should consider:

• Digital marketing
• Traffic (number of customers visiting) and sales
• Content and design
• Product information and images
• Inventory levels
• Order management (picking, packing, and distribution) (both outbound distribution and reverse flows, such as returns/claims)
• Customer service

Evaluate e-commerce platforms based on these flows above, but with a focus on technology and business development, aligned with your business goals. This will provide a better foundation for a digital future – for your entire company.

I also want to emphasize once again the need to look at new architectures. Because I know that choosing the right platform is difficult. And I haven’t yet found the optimal platform myself. I miss the evolution within e-commerce platforms, as discussed above regarding older generation system development. I know that the large platforms out there still exist. E-platforms are still driven by platform providers and IT developers with large financial resources, and the business aspects (business development and sales) are not yet fully present, as I have reasoned above. It is the ‘old platforms’ that are primarily chosen, and this will continue to be the case. Until the next generation of e-commerce arrives. And the next generation of e-commerce needs next-generation sales strategies. Not just functionality.

The next generation e-commerce platform operates fully in the ‘sales layer.’ For me, the best platform for online sales would be one that is ‘thin,’ meaning a platform that lacks heavy backend functionality. The platform should focus solely on driving sales. It should be performance-fast, optimized for SEO and SEM, and for search engine updates (working ‘closely’ with the protocols that these use and prioritize). It should not handle order updates, customer service flows, inventory levels, or calculations. It should work with content precision, personalization, A/B testing of flows and page rendering, and sales performance (upsell, cross-sell) fully. Essentially, much of what today is handled by third-party tools that you ‘add to your site.’ I want a pre-installed ‘tag manager’ that can render sales optimization via code functionality in my backend. For example, I want to be able to ‘code on my site’ without development skills because it is already added as superuser functionality in my backend. I want to be able to support and change the appearance and add functional blocks to my various site pages WITHOUT using developers. I want to work with sales.

Choosing an e-commerce platform is a significant decision. The text above is meant to encourage thinking a little differently. To think critically based on business understanding. Think through the high-level functionality requirements of my vision for the new generation platform as described and see if you can choose a platform that already has these features – either now or on its upcoming roadmap. Then you will move forward and stay ahead of the curve. And you will have chosen the right platform.

/ Yvonne