Top Three Risks in eCommerce Platform Standardization
eBay Enterprise/Magento and Gorilla Group recently commissioned Forrester Consulting to dig deeper into the growing trend of eCommerce platform standardization. While the research found that close to 50% of eCommerce decision-makers do indeed plan to standardize on a single commerce platform in the next two years, the study also surfaced several potential risks that can undermine the cost and process efficiencies of this strategy to consolidate and manage multiple country and brand sites from a single platform.
eCommerce Business is Booming — Powered by Country and Brand Expansion
The study’s findings are in line with other industry forecasts with participants projecting a 13% CAGR for their eCommerce sales over the next two years. Much of this growth is projected to come through international expansion and bringing more brands online. At the same time, participants want to empower local and individual brand teams to manage the in-market or brand-specific digital commerce presence with 38% of respondents projecting they would be shifting to this approach in the next two years — up from 25% currently.
Decision-Makers See Benefits in Commerce Platform Consolidation but Worry about the Ability to Tailor for Market and Brand Needs
Companies are moving away from allowing these local teams to spin up their own platforms with 47% expecting to consolidate their various websites on a single standardized platform in the next two years. The primary driver behind standardization is reducing the total cost of ownership, which ranked as an “important” or “very important” feature of an eCommerce platform by 93% of respondents.
eCommerce leaders should bear in mind, however, that there are potential risks to standardization. The study points to two in particular with a third that we commonly hear about from our customers:
1. The inability to cost-effectively tailor the customer experience — and the business user experience — to each brand, to each market, and ultimately to the relevant target customers.
2. The inability to quickly and cost-effectively integrate with legacy systems, with best-of-breed specialized solutions for OMS, PIM, marketing, personalization, and experience management, or with new innovative solutions as they become available.
3. Vendor lock-in and ceding control of the ability to differentiate and innovate by being beholden to a single vendor — becoming dependent on their innovation vision and roadmap
All of these can potentially undermine the anticipated cost and process efficiencies to be gained from platform standardization. The common theme here is a concern about the ability to launch tailored experiences quickly and cost-effectively in order to hit growth targets and stay ahead of the competition.
These concerns are very real. Standardization may seem like a silver bullet for rapid global expansion and brand extension, but we consistently hear stories of merchants finding their platform — which they were told by the vendor would serve as a foundation for efficient international deployment — unable to cost-effectively and quickly tailor the customer and business user experience to locally required payments, shipping, regulatory compliance, and other market-specific needs. In some cases, individual country deployments cost as much and took as long as initial flagship deployments.
The Study Points to One Platform Feature in Particular That Can Mitigate These Risks: Flexibility
Decision-makers are clear that they want their eCommerce platforms to have the flexibility to easily extend the functionality of their platform in order to optimize the experience for unique brands, divisions, and regions. As Forrester has found in another report, a platform with built-in APIs and an open extensible architecture deployed by systems integrators or global commerce service providers with experience implementing these integrations can be crucial to this process.*
To find out more about how your peers view the benefits and potential risks of standardization — and the importance of flexibility to tame those risks — download the complete study now.
About Lin Shearer Lin has more than twenty years of marketing management experience in entrepreneurial ventures and high-growth divisions of Fortune 500 companies, and he has developed and managed marketing strategies and programs that drove customer base, revenue, and market share growth for three eBay businesses: ProStores, Magento, and eBay Enterprise.
*Source: “Deliver An Effective Technology Infrastructure For Global B2B eCommerce,” Forrester Research, Inc., December 19, 2014.
Originally published at magento.com.
