Should You Re-platform Your eCommerce?
For various valid reasons, we have been getting a lot of inquiries from merchants considering changes to their eCommerce system. I say "system," because today's eCommerce is more than just an online storefront. Most merchants are selling on Amazon, eBay, or other channels in addition to their website. B2B businesses are exploring ways of integrating with their resellers, as well. In addition, many small and medium-sized merchants — both B2C and B2B — who are currently using Magento as a platform are facing tough decisions relating to upgrading to Magento 2: is Magento 2 worth the expense since it's not a "one-click" upgrade, but, rather, a completely new installation?
You're Not Alone
According to a survey by Internet Retailer in October 2016, 89% of merchants asked were either currently or planning to re-platform within the next two years. That's a lot of change! The primary reason for considering re-platforming is to add more features and functionality, increase user interaction (particularly mobile), and improve integrations with selling channels, back-office operations, and reporting. As the online field has become even more competitive, it's important for merchants to continue innovating — both products and technology. Undoubtedly, you've read in news media of the many, many brick-and-mortar stores that are closing. Traditional retailers have not been able to innovate well enough to keep those channels profitable. The same fortune could hit online merchants if they adhere to the "build-it-once" mentality. Today's retail and wholesale industries are evolving at a dizzying pace, and only those merchants willing to constantly review and revise their merchandising operations will survive.
A Philosophy for Change
First, let me say that not all merchants need complete overhaul changes. Oftentimes, we find that new clients who are perplexed by a decline in sales or other under-performance simply need some tweaks to their eCommerce system. It might be an additional integration, the creation, and management of a targeted marketing campaign, or a design "facelift" to improve conversions. But, the determination as to whether a change at any scale is necessary is based on a 4-step philosophy we've honed from over 20 years of experience.
1. Commerce Unification
Today's merchants are using multiple selling channels, integrated fulfillment operations, inventory tracking, accounting, social media and PPC marketing, and on and on. Too many are relying solely on their storefront platform (e.g. Magento, Shopify, BigCommerce, etc.) to act as the central "hub" for all this activity. Yet, none of these platforms truly perform this function well. If you add more complexity to Magento, for instance, the system slows down and becomes more and more expensive to maintain. Shopify and BigCommerce are SaaS platforms; any additional functionality comes by way of third-party add-ons which may or may not play nicely with other add-ons or deliver the level of sophistication required to run a growing online business. We prefer to unify all commerce into a singular backend platform — one that can consolidate orders from all channels, maintain the inventory "master," and coordinate shipments, returns, and stock ingests. We call this Commerce Unification, a term I coined several years ago. Using a central system to tie everything together, your online store becomes just one more selling channel like Amazon or Walmart. You're now bringing into one tool all the key data and transactions across your entire operation. Such a unifying system can be thought of as an eCommerce ERP. However, we don't necessarily require that such a platform manage accounting, HR, and assets. Those can be better served by an integrated accounting system. We do, however, know that an eCommerce operation will run with greater accuracy and efficiency when such a system is employed. For small merchants, much of this level of centralized data management can be handled by a tool like Ordoro. For growing, mid-level merchants, more sophistication is warranted by a platform such as SellerCloud. Enterprise operations may justify the cost and complexity of NetSuite. In any case, for us, it's a measure of cost, ROI, merchant capabilities, and eCommerce requirements. The key point here is that without Commerce Unification, you run the risk of losing data integrity, pricing management, and increased selling opportunities. Your reporting and metrics will certainly be more complicated to gather without a central data repository.
2. Simply Simplify
Commerce Unification also contributes to our second tenet to keep things simple. We've seen systems put together using so many add-ons, extensions, hacks, and customizations to make any upgrades or improvements extremely expensive and treacherous. If you're going to dominate your niche, you have to be more flexible. A centralized backend gives you that. For example, if you feel your storefront platform is not giving you the merchandising presence you want, you can switch it to another platform without re-tooling all the other integrations and components. But simplifying an eCommerce system is more than unifying your system. There are four rules to simplifying your system:
Use as few integrations as possible. Keep your complexity to a minimum. But, don't hesitate to off-load specialized functionality — such as email marketing — to other systems which offer better performance.
Limit and enforce role-based access. Not everyone in your organization needs full access to everything. And no one should be sharing login information with others in your company. By enforcing a strict role-based access protocol, you make it easier to adjust for personnel while adding a level of accountability.
Don't overwhelm with features. You only have so many man-hours available. When we work with clients, we take a top-down approach to map out priorities, then work down until we have maximized the client's resources. At that point, we have a good handle on what system components will fulfill the client's objectives without adding features that would go unused. For example, NetSuite does an awful lot; however, for a small, 3-man operation selling on a website, Amazon and eBay — and shipping from their own facility — fully leveraging all the features of NetSuite would be impossible. Better to start with a system that matches your capabilities. You can always upgrade later as your business grows.
Adopt SaaS technologies. The power of today's cloud platforms means you have a lot more choices. Additionally, integrations between systems are quite common and powerful. And you don't want to get calls at 2 am that your servers have crashed! We've been there, ourselves, and we very much like having others get the early morning alarms. If your operation is so custom that there are no SaaS solutions that make sense — and we've been hard-pressed to find any — you may need some part of your system to be self-hosted. But consider it as a last resort.
3. Find a Mentor
If you've read my posts before, you know I've said this: eCommerce is the most complicated form of commerce. Anyone who has run both a brick-and-mortar and a successful online store will confirm that of the two, online sales are more complicated. So many configurations and rules. And the integrity of your data is extremely important. Therefore, if you're new to eCommerce or just not performing at the level you expect, find a mentor or partner on which to lean. I have a monthly call with a competitor of ours. We don't really cross paths in terms of clients — there's plenty to go around — but the value of these calls is that we act as mentors for each other. We share ideas that help us both to succeed. In like fashion, we act as mentors for our clients. Each week at a regular, set day and time, we have a conference call to go over the more current metrics, discuss ideas for growing their business, and talk over new trends in the industry. These calls don't always result in actionable steps that involve us, but they almost always create tasks for the merchant that will help them continue growing their eCommerce results. We also learn from our clients as they share results that improve our insights. It's a win-win for both. Like all good businesses, you should also — with your mentor's assistance — create a detailed eCommerce plan. Without goals and objectives, you're operating blindly. ECommerce is not to be taken as simply a "build it and they will come" effort.
4. Evaluate Your System
If you think you have all your pieces working well, you're already losing ground. Sorry, but the reality is that the speed of innovation demands that you take time to evaluate your system to make sure it's ideal for your objectives. When a new client comes to us, the first thing we do is analyze their current system. What surprises them is that the initial evaluation touches on all aspects of their operation; it's much, much more than simply asking them what shopping cart they're using. In fact, we have identified 93 questions that will give us a very good initial view into their eCommerce operation. Think about it a moment. To truly understand a merchant's eCommerce efforts, you have to learn about their:
Products
Customers
Channels
Fulfillment
Marketing
Customer Service
Operations
Technology
Metrics
From the 93 questions related to these topics, we can make an initial recommendation to guide a deep dive into formulating a qualified plan for re-platforming some or all of a merchant's system.
Evaluate Your System
Previously, we've kept this evaluation system private, to use with our clients. But, I felt all merchants might benefit from at least asking themselves these 93 questions. If you want to get an initial evaluation of your eCommerce system, you can go through the same questions we use with our clients, have your answered emailed to you, and I will personally review your responses and provide you with an initial recommendation of any re-platforming you might need (if any). There's no cost for this; however, I know you'll definitely find value in forcing yourself to answer these questions.
