Rise of the eCommerce industry
I’m sure we all agree and believe that the eCommerce industry is a multi-billion dollar sector that has changed our lives completely, but if you think this is its pinnacle, then you’re clearly mistaken. According to Statista, the global retail eCommerce sales in 2019 rose to 3.53 trillion USD, which is projected to only grow further to a staggering amount of 6.54 trillion USD by 2022. Need more reason to put that online store plan of yours into action?
Image Source: statista.com
Of course, just like every other business category, eCommerce business also has its fair share of challenges and pitfalls. However, one can take comfort in the fact that this is one industry that is held together by a barrage of continuously evolving technologies, which make conducting business much easier than the conventional method.
And talking of technologies, today we’re going to let you into the trick of choosing the best eCommerce platform for your online business so you’re at the receiving end of every possible advantage that there is. You can thank us later. For now, just read on as we break down the types of eCommerce platforms available in the market, analyze their advantages and disadvantages, look at the most popular platforms, the features to look for in the platform and their suitability for your business.
Brief history of eCommerce
But first, a little dive into the background of the industry with a brief history lesson. Did you know that the first ever online transaction, through a WAN called ARPANET, was a cannabis deal between Stanford and MIT students in 1971 or 1972? Yeah, you heard that right. But it wasn’t until 1979 when the first actual online shopping system was invented by English inventor and innovator Michael Aldrich, thus paving the path for B2C and B2B transactions.
What followed in the later years was a series of developments, including certain significant ones like the invention of the WorldWideWeb by English computer scientist Tim Berners-Lee in 1990 and the release of Netscape Navigator by Netscape Communications Corporation in 1994. All these developments, minor and major, have somehow been instrumental in leading up to the event that really kickstarted the eCommerce gameshow slash urban lifestyle.
I’m referencing to the launch of Amazon.com and the founding of eBay in 1995, that set the ball of online shopping rolling for all of us. Although it took a few years for the pioneers to sink their teeth into meaty revenues, it did influence many more visionaries to follow suit, notable among them being Jack Ma’s Alibaba.com in 1999 and DHgate.com in 2004.
Image Source: latimes.com
With these pioneers reporting encouraging sales, ambitious entrepreneurs soon sensed the tremendous opportunity that online selling offered and followed suit. While many of them had successful products, not all had the technical ability or the large funding required to develop their own web stores. That’s where software experts and developers stepped in to fill in the gap by providing easy-to-implement eCommerce solutions.
eCommerce solutions for businesses without resources
An eCommerce platform is simply a software solution that enables you to run your online store complete with products, inventory, marketing, payment gateway and so on. Two types of platforms emerged over time that offered business owners the ability to set up their own web stores without possessing the resources of big players like, let’s say, Amazon or Dell.
The first one offered source code for web stores to companies that had some amount of IT expertise, even if it was limited. This was essentially a build-as-you-go modular approach. Using the source code you could add features in modules and if something didn't quite work you could use another code and replace the feature module.
For example, if the product display layout turned out to be less inspiring than you expected, you could simply replace it with another. The best part of this approach was that the source code was free and even with a limited IT team you could comfortably manage to set up things on your own.
The second platform went one step further, and it offered a ready-for-use software that could have your store up and running in a matter of hours without the need for you to have any technical expertise. This was essentially a DIY kit offering simple ways to upload products, their features, pricing, etc. and choosing the right design from the numerous templates offered.
This was like a preset eCommerce store with options for you to choose the way it could look like. As all things good and that make our lives easier, this one wasn’t for free either. Developers of these platforms charged a certain amount, usually on a per month basis. This type of eCommerce platform came to be called Software-as-a-Service or, quite simply, SaaS.
How open source and SaaS eCommerce platforms compare
Open source eCommerce platforms are readymade online store builders with open source code access, which you can use to set up your entire site on your web host in quick time. It gives you complete control in running your site without the recurring cost that a SaaS platform demands. You can even scale it up as required and customize its features the way you want them.
The only catch is you must possess a certain amount of technical skill to manage this job. For example, site management and admin UI is generally trickier than SaaS-based solutions. Further, finding a stable web host for your eCommerce store is also that would now rest on you. A big limitation of open source platforms is that they provide few useful features and you have to keep purchasing extra modules. Click here for some more pros and cons of open source eCommerce software.
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To overcome this limitation, certain vendors came up with platforms with premium or custom subscriptions/plans. These plans offered optimized features, full customization and complete control over development without the need for a dedicated technical team. Some of the leading names in open source eCommerce platform vendors with premium plans are WordPress, WooCommerce, Magento, PrestaShop and OpenCart.
SaaS eCommerce platforms, on the other hand, are ideal for entrepreneurs who are lacking in technical resources and are not flush with funds. These platforms come with easy step-by-step process to set up your site in hours, no coding knowledge or your own web host needed. That’s because the software is on cloud storage and all you need to do to maintain it is pay a monthly usage fee.
You may use a design layout from the several free or paid templates that the platform offers. Most of them have an intuitive interface, and simplicity of management is their hallmark. Here’s a little inspirational story for you about how PhoneWagon’s founder Ryan Shank started a SaaS company for less than $40,000. Some of the best known SaaS platforms in the market today are Shopify, BigCommerce, Wix, Squarespace and Weebly.
Image Source: magento.com
Choosing the right eCommerce platform for your business
When evaluating an eCommerce platform your primary concern should be whether it is suitable for your business size and the industry you are in. Based on your key factors and requirements, your goal should be to zero-in on the platform comes across as the strongest with these features:
1. SEO friendliness
This should be the very first feature to be under your radar since eCommerce platforms with built-in SEO features are your best bet to rank high on search engines. And when you do select a platform offering SEO features, make sure that you make your website as interactive as you can to engage your visitors, including getting your own unique domain name. Here are some steps you can follow to find an SEO friendly eCommerce platform.
2. Product Management System
A strong product management system is at the heart of an eCommerce platform. You need to be able to upload products and share their images, features, prices, reviews, etc. effortlessly and in bulk. If the platform provides quick, hassle-free templates and CSV for bulk uploading, then that’s the right one for you.
3. Order Management System
Before you put up your products on the platform and begin SEO and other marketing/promotional campaigns to generate leads, make sure that the site has a system that is simple for customers to navigate through but can handle all the complexities of order management smoothly.
Your order management system (OMS) should be able to take care of your business operations by managing sales channels, product details, seller/supplier information, payment, packaging, delivery/shipping and returns/refunds. Know how to choose the right OMS for your business.
Image Source: shopify.com
4. Returns Management
Product returns can be a nightmare for eCommerce retailers because there’s a good chance that the returned product may not get sold after that. Plus there’s the sheer wastage of resources, time and money.
And what makes it worse and possibly frustrating is when you look at the reasons why customers wish to return the product. Here’s a look at Statista’s January 2019 survey of global online shoppers showing the reasons behind their online purchase returns.
The holiday sale season can be the most nail biting period for an eCommerce retailer, when shoppers go nuts with their online purchase to set their cash registers ringing but can take away that satisfaction in a flash with return requests. Compared to the return figure of 5-10% for in-store purchases, online purchase returns stand between 15 to 40%, which can be very discouraging for online retailers.
Yes, returns can be disheartening and costly, but if managed smartly, it can still save you a lot of heartache and unnecessary expenses. Here’s an interesting read on how you can still ensure profitability in spite of high online return rates.
Image Source: ebay.com
5. Mobile friendliness
With a growing rate of eCommerce sales taking place over mobile devices lately, especially among the younger generation, implementing a fully-featured mobile adaptation of your online store is quite crucial for success. M-commerce or mobile commerce ate up 25% of the total eCommerce sales in the US in 2019, a figure that was predicted to rise to 45% or $284 billion by end of 2020.
Did that sheer sales volume statistics get your attention? Good! Now, it’s time for you to get down to business and find out how to optimize your eCommerce website for mobile devices so you can get a slice of that whopping sales pie.
6. Security features
Nothing that one does on the internet should be devoid of a security assurance, more so if you have an online store. Your eCommerce website must provide total security to not just your customers (because of the constant financial transactions), but to everyone involved, including yourself.
Cybersecurity threat is one of the most notorious dangers that can lead to theft of personal and financial data, turning your business upside down in a matter of moments. That’s why cybersecurity vendors keep coming up with newer and more advanced tools and features every year to make online transactions a safe activity. It’s vital that you learn everything about online security and how you can secure your eCommerce website against cyber threats before you set it up.
7. eCommerce analytics and reporting
The eCommerce industry is one where there’s fierce competition among retailers to stay one up over each other, not just to thrive, but to survive even. And in order to stay ahead, making smart decisions aided by numbers and statistics is pretty vital. That’s where web analytics and reporting come in to save the day.
If you’re an eCommerce retailer and are not a patron of a dependable analytics tool, then success will surely be an elusive destination for you. That’s why we suggest that you find out more on analytics and why it’s so important for the success of your eCommerce business.
8. Multichannel integration/listing
One of the biggest advantages of the internet is the availability of multiple online platforms through which businesses, especially eCommerce, can touch base globally and connect to a bigger audience. From Facebook to Instagram, Twitter to YouTube, you can capitalize on the enormous reach of these channels to take your products to the whole world.
Of course, listing your products on these channels would mean spending money for the service, but the benefits far outweigh what little investment you would make. But don’t just take our word for it, read how going multichannel can benefit your eCommerce business.
9. Platform scalability
Being foresighted is a quality that you will find to be very valuable when you step into eCommerce business. And one of the acts of foresightedness would be to choose a platform that is scalable and can adjust to future growth, because your business will most definitely grow if you follow all the previous steps.
Without a scalable platform you’re as good as stuck to where you started. An eCommerce platform that supports automatic updates and allows integration of the latest tools/apps, while proving to be low on maintenance is a highly scalable one. You can even build a highly scalable eCommerce platform from scratch if you are willing to put in some time and effort.
Leading eCommerce platforms
Now, let’s look at some of the leading eCommerce platforms available in the market today, including both open source and SaaS platforms to find out what they are doing right and which one suits your business best.
Undoubtedly, a platform whose time has come, and in no uncertain terms. Shopify is today the undisputed leader in eCommerce platforms with more than 800,000 merchants, including some of the biggest names, and over 218 million customers.
One of the reasons behind the phenomenal success of Shopify is - combination of robustness and simplicity. Their software is very clear in its approach and simple to use, making navigation a very pleasant experience. Right at the outset, its home page makes the fundamentals of online selling crystal clear.
Image Source: shopify.com
When you begin building your store, there is a neat panel on the left with various steps/menu options. No confusion, no clutter. There is also an import option at top left, which lets you upload in bulk using a CSV excel sheet. Shopify offers a whole lot of free designs plus paid ones to select from.
You can also be sure that with Shopify you won't get lost in a complicated maze of analytics and charts. Shopify can be integrated with multiple channels and marketing tools, making it a very flexible and versatile platform that’s suitable for any kind of business category.
Image Source: shopify.com
Released in 2011 WooCommerce is an open source eCommerce platform that has become very popular among a growing number of online merchants that are patrons of WordPress. At 28.24% of the global eCommerce market share in 2020, WooCommerce clearly leads the pack much ahead of Shopify at 10.98%.
Both WordPress and the plugin WooCommerce are open source solutions and hence free for personal and commercial use. Meaning one can install and start using them immediately. Though the basic platform is free, there are additional expenses for a domain registration, web hosting, email, themes, support, etc.
Image Source: woocommerce.com
Magento is an open source platform written in PHP that comes across as a highly scalable solution designed to adapt to growth and innovation. Although Magento has a market share of merely 3.44%, falling far behind WooCommerce and Shopify, it nonetheless boasts of some major brands as its patrons, including Aldo, HP and Paul Smith.
There is a paid tier available for enterprise users, but at a basic level the software is free for all to use. It is also used by countless small eCommerce operators, but it can get somewhat overwhelming for small businesses if they don't have strong inhouse technical support.
Essentially, Magento is designed for large users, with a very large portfolio of products, very high web traffic, and top-end features. It is fairly advanced as a piece of software and requires compatible handling by an accomplished team of IT experts.
It is available as a free download, which means that you can download it from the official website and install it on your own server. Magento is also available as a hosted service, meaning you don’t have to install anything yourself, but would come with a much higher price tag.
Image Source: bsscommerce.com
We hope this article will provided some insight in your search for an eCommerce platform that works best for your online business venture. Although we’ve highlighted only three, and the most popular, platforms in the market, there are many more that you can explore and if it helps, here’s a little statistics on the global market share that each of them enjoy.
Image Source: statista.com
0707 has more than a decade’s experience in supporting businesses, both online & brick-and-mortar, with their marketing and product promotion exercises, using the latest technologies available today. Our team of experts are always at your disposal to help you not just choose the right eCommerce platform for you, but maintain and support your online store as an extension of your enterprise. Feel free to get in touch with us to discuss your ideas.