Rewards and Risks in Ecommerce Re-platforming

Our everyday life is bombarded with choices when it comes to technology. There are some straightforward ones like choosing an iPhone over a Galaxy and vice-versa. Then there are the trickier ones like choosing to upgrade to Windows 10 when you have the trustworthy Windows 7. Is DirectX 12 support, 1080p60 Xbox One streaming, and reintroduction of the Start Menu sufficient to make an upgrade? Well, what compels us to upgrade is crucial and it varies greatly across individuals.

Businesses, like individuals, are constantly forced to choose between upgrading or retaining their current technology medium and these decisions cannot be made lightly. Stick with the existing setup for too long and you are left behind by your rivals. Move forward too soon; you have a powerful infrastructure but no real practical use which will ultimately affect your bottom line adversely.

RE-PLATFORMING: NEED OF THE DAY?

The idea of re-platforming your E-Commerce store is an enticing one. You are in for a brand new technology which opens up multiple routes for you to make a sale. The store gets a slick and snappy User Interface containing dazzling high-res images and virtually zero loading times and importantly, the promise of scaling up your business to the next level always piques your attention. The talk of re-platforming has gained a lot of momentum due to the emergence of mobile space as a viable medium for business transactions. The big bang of mobile commerce has reshaped the E-Commerce landscape so drastically; even the biggest of juggernauts in E-Commerce have stopped to take notice and change.

In 2014, Walmart's E-Commerce sales grew approximately by 22% to around 12 Billion USD.

Customers who previously shopped using their laptops are now using their phones and tablets. And this isn't just a U.S. trend, for example, traffic from the mobile app in Brazil nearly tripled on the Black Friday holiday."
-Greg Foran, CEO, Walmart

According to Shopify which powers some 140000+ businesses, one of the important trends observed in 2014 was 1/3rd of all E-Commerce sales are happening on mobile devices and the mobile space now accounts for 50.3% of all E-Commerce traffic. For their research report on commerce technology investment and platform trends, Forrester surveyed close to 50 eBusiness leaders on their technology investment plan for the next twelve months.

Judging by the recent trends, doing business on a store which offers a more coherent platform through which effective business can be orchestrated compared to a patched up, disjointed and a relatively older in-house system makes all the difference between success and failure. Some of the features the latest E-Commerce platforms offer are Responsive Web Design for lowering TCO and improving multi-channel selling, Search Engine Optimization right out of the box, Predictive Analytics for better targeting and customer engagement, streamlined Order Management, cloud powered servers and various plugins to sync blogs, social media, email and affiliate marketing channels. The ever growing influence of social media, digital marketing, SEO, SEM and retargeting solutions on our purchase decisions calls for a system which can seamlessly integrate with third parties providing such services.

THE FALSE POSITIVE SYNDROME

On paper, the amount of customization and personalization a brand new E-Commerce platform offers is irresistible to even the wisest of CMOs and CTOs but despite its appeal, the optimal time to rebrand or re-platform is not the same for all enterprises. It is also difficult to categorize a company's readiness to re-platform based just on its size, revenue or rate of growth. There are some signs a system may display that convey a need for an upgrade, for example, the frequent crashes during a busy period of sale, say "Cyber-Monday". To get an idea about how common such crashes are, here is an article listing out several big name e-retailers, including Tesco in the UK, crashing on Black Friday. Can we infer from these occurrences then, that the concerned platforms are not able to keep up with the load and need an upgrade? Well, the answer is not that simple. Do these sites crash on a normal day? Probably not, but the crash happens at a crucial time which results in lost business. What about those sites which crash randomly even when there is no apparent buying frenzy going on? The fix for such a site might be as simple as adding more RAM to the servers. Due diligence and exhaustive analysis of all possibilities for a particular failure is a time consuming but sensible way to evaluate the need to re-platform.

POISED FOR A CHANGE

The need to change stems from a combination of factors such as limitations of the existing platform, growth strategy of the company, and keeping up with competition to name a few. Failing to address the intricacies involved in choosing the right platform at the right time with the right pace may result in an unbalanced yet expensive migration process. It will take even more time and effort to streamline and fill the gaps caused by the incorrect implementation. These pitfalls make re-platforming a path that needs to be carefully treaded. We will focus on which companies are primed for re-platforming and what are the compelling reasons for them to take the plunge sooner rather than later in the next installment of this blog series.

-by Mahesh and Ambarish

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