A 2014 Quocirca research report titled Online domain maturity shows that 98% of organisations have some level of online interaction with outsiders and that for 78% this involves consumers.
In other words, an organisation’s online presence – its online domain – has become ever more important as a competitive advantage. For many, this interaction involves selling something – e-commerce.
While the research shows certain sectors, such as finance, retail and transport, interact the most online, it is high for all, including the public sector, for which the online collection of taxes, renewing licences and so on are forms of e-commerce.
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For many there is also a need to manage the so-called omni-channel – that is a customer’s desire to move seamlessly from one means of interaction to another. A customer may start a transaction online and finish it over the phone. For many retailers, their high street presence is another stream in the omni-channel. Back-end management tools need to recognise customers as they move from one channel to another.
The priorities for constructing an e-commerce platform were made clear by the respondents to Quocirca’s survey: websites and applications for interacting with users via mobile devices and web browsers; back-end management including customer relationship management (CRM); taking payments; and interaction with third-party services, including social media.
Larger organisations may consider each element separately, but for many it will be more convenient to turn to an aggregated service provider that delivers many or all of these requirements, often as an online service.
Retailers need to put goods on display; government bodies need to detail why a particular tax must be paid and what happens when it is not. Until about five years ago, the display was nearly always a large-format web page, but now it must adapt to fit the much smaller screen of a smartphone or tablet. There are countless firms that can build and host general-purpose websites, but putting in place an e-commerce capability requires more specialist skills. This is the role of e-commerce tools and cloud services.
E-commerce, be it doing the weekly grocery shop, buying tickets for events or putting together an insurance policy, requires the user to move from screen to screen, selecting and deselecting items, and eventually checking out and paying for them. There may be a need to maintain details of a customer’s activity from one visit to another, and it is useful to understand when sessions are abandoned. The management of online shopping baskets is a standard part of e-commerce offerings and an experience most consumers are now familiar and comfortable with; there is little point in re-inventing the wheel.
Taking a payment, whether by a service such as PayPal or a payment card, is the most problematic part of e-commerce because of the oversight of the Payment Card Industry Security Standards Council and its Data Security Standard (PCI DSS). But this should not scare organisations off. The responsibility for compliance can be readily outsourced to a payment gateway provider which will manage the transactions and take your organisation out of scope for compliance. There are numerous payment gateways available in the UK, including Cardstream, CyberSource, DataCash, NetPay and WorldPay.
There are also specialists for taking payments in other parts of the omni-channel. For example, Semafone and Aeriandi will keep you out of scope for PCI-DSS for telephone transactions and Vodat International will do so for taking in store payments. Some gateway providers say they will manage all channels. Whatever approach is taken, relying on payment card details to recognise a customer from one transaction to the next is not a good idea. The increasing use of tokenisation to mask details, including new services coming from Visa and MasterCard, will mean that many online traders will never see the details of their customers’ payment cards. They need to recognise them by other means.
Customer relationship management
Recognising a customer from one channel to another and from one transaction to the next needs a back-end system capable of managing the details of customers – with the exception of payment card data – and their interactions. This is the essence of CRM and the need for this has led to the rise of one of the giants of the internet age, Salesforce. While Salesforce offers a wide range of services, it does not provide an e-commerce platform – yet it has 19 partners on its AppExchange that do, linking into the Salesforce platform for back-end CRM, all managed in the cloud.
There are plenty of other CRM providers. Microsoft Dynamics CRM is offered as an on-premise deployment or as a managed service, while partners such as Clarity Ventures provide integration with e-commerce systems. Oracle CRM, mainly based on the Siebel platform it acquired in 2005, can be linked to Oracle’s own enterprise retail offering.
CRM systems handle all sorts of other requirements, from sending information about deliveries and dealing with complaints to pursuing repeat business through linking to e-marketing tools.
A shop window is no good if no one sees it. Online, this requires driving traffic to e-commerce sites. This includes attracting new customers as well as persuading existing ones to return.
The ability to target online marketing needs effective CRM and, these days, this has to interact with social media to get through to users on their personal, mobile and larger format devices. E-marketing capabilities are often linked to CRM systems or are part of an e-commerce platform.
It is also important to measure customer experience. Following user behaviour – why some visitors become buyers while others do not – requires understanding and improving the overall customer experience. Quocirca’s domain maturity research showed that consumer-facing organisations were more likely to have invested in capabilities such as user experience monitoring (UEM) and web analytics.
For those that manage their own web presence, suppliers such as Neustar (the sponsor of the domain maturity research) and the NCC Group offer website performance and monitoring tools. Consumer-facing organisations are also more likely to be able to link such data to business performance, although many do not.
Making life easy – e-commerce package
The number one priority for an e-commerce site is the safe taking of payments. Beyond this is the need to protect the personal details collected about customers as mandated by EU data protection laws.
Effective security should also protect e-commerce sites from the proliferation of various types of cyber attack, especially denial of service (DoS). Online services for this are available from suppliers such as Neustar and Akamai, or for on-premise protection from Arbor and Corero. DoS attacks will often attack domain name service (DNS) infrastructure. Services for managing and protecting this are also available from Neustar, Verisign and others.
As with so many areas of software delivery, online retail packages are available as on-premise tools or cloud platforms. If a system is developed in-house, it is then necessary to select a deployment platform, which itself can be cloud-based. With a cloud-based e-commerce service, the provider often has its own deployment capability.
The leading supplier of on-premise software is Magento, which was acquired by eBay in 2011. Based on figures from the Amazon-owned Alexa top websites rankings, aheadWorks (a Magento partner) calculates the market share by number of deployed sites for Magento’s free open-source Community Edition to be 33.8%, and for the paid for Enterprise edition, 8.7%. Magento did have a cloud-based edition, MagentoGo, and associated deployment platform, ProStores, but both were scrapped in 2014 as they failed to adapt to, and compete with, more established cloud-based offerings.
Magento is not alone in struggling to maintain both cloud and on-premise versions. French supplier Actinic has ended up as two companies – Seller Deck, that ended up with the on-premise products, and a residual Actinic that got the cloud platform. One leading supplier still offering both on-premise and cloud-based versions is Prestashop, which, going by the aheadWorks figures, is the number two supplier with a 13.4% market share. Another, Maginus, is available for on-premise development or integrated into Microsoft’s Azure cloud platform.
The leading cloud-based software provider, according to aheadWorks, is Shopify, with 8.3% market share. Its platform is focused on small and mid-sized enterprises (SMEs) but it also has enterprise customers. The platform addresses omni-channel requirements and includes a point-of-sale (POS) system, with recent optimisation for mobile checkouts. It also has its own app store which includes a number of CRM applications. The UK is its second fastest growing region. Other suppliers that target SMEs include TicTail, Bigcommerce, EKM Powershop and, for larger businesses, Venda, Demandware and Hybris.
There is a lot to get right when establishing an effective e-commerce strategy and implementation, but there are plenty of specialists out there to help. With so many of the requirements now deliverable as cloud services, the barrier to entry for e-commerce has never been lower. If your organisation has something to sell and it is not yet transacting online, the biggest question should be, why not?
Bob Tarzey is an analyst at Quocirca.