Choosing the right ecommerce platform can be a daunting task, there are a wide range of platforms out there which vary hugely in terms of features, integration and cost of ownership. Too many retailers don’t put enough research into their platform selection, which can lead to costly and time consuming dead ends.
Image: Commerce Gurus
It’s vitally important to select the platform that fits your requirements and budget, after all you’re making a minimum of a 3-5 year investment in your ecommerce platform so you want to get it right. Taking the time to research and investigate your options will pay dividends later, I’ve outlined a process to help you get this right.
Do Your Homework
It pays to research
Firstly we need to answer 3 questions so that we have the information required to make an informed decision, these centre around the objectives, team and understanding the requirements. Once we’ve done this we can look at platform selection.
What are the objectives?
What are you aiming to achieve through the platform? What does success look like and how will you measure it? Outlining the objectives before we start helps keep everyone focused on what’s important through the project - they are very useful when making decisions by asking the question “Does this help us hit an objective?”.
Some objectives would normally revenue or profit based, either directly or indirectly, a good objective is easy to measure, some examples could be:
- Increase traffic by 20%
- Increase revenue by 50%
- Increase conversion rate by 30%
- Increase operational automation between the website and warehouse
- Improve the customer experience by offering click and collect and order in store
I’d recommend putting down three objectives to help keep everyone on the team focused on what we’re aiming to achieve. Reviewing your objectives once we’re live on the on the new platform and setting new ones every quarter is a good idea, a popular method for doing this was invented at Intel, called Objectives and Key Results (OKR’s) it’s a great way to keep focused on business results.
- Create an objectives documents outlining what the objectives are and how they will be measured
- Circulate with the team, both internal and external members
- Consider reviewing objectives every quarter once the new platform is in place
How experienced is the team?
It’s important to understand the skill set of our team and plan accordingly. For example do you have development experience in your team, if not are you prepared to pay for it? The same goes for other disciplines like Marketing and Operations. When considering a new platform the level of development experience plays a key part:
- Just starting out: you have little or no experience in online retail and you’re on a budget: you need a platform that can get you up and running with little or no technical experience: Shopify, Big Commerce, Volusion or Square Space
- You have some experience in online retail and aiming for a turnover in the millions: Shopify Plus, Magento (Community & Enterprise) and Demandware.
- You have an experienced team and a turnover to match: Hybris, Magento Enterprise, IBM Web Sphere, Demandware and ATG
Planning ahead - this is something to consider carefully, we want a platform that can support our plans for the next 5 years, any further than this and we risk putting too bigger a strain on cash flow. 5 years is a long time on the online world and the landscape could change drastically in that time.
- Work out the team’s skill set and document it
- Identify the platform that fits best with your current team
- Plan for the next 5 years but no more
What are the requirements?
Know what you need from your platform and stick to it. Its fairly typical in the software world for 20% of the available feature set to be used - less is definitely more when considering ecommerce platforms.
Make sure you put down on paper what your specific requirements are, along with an indication on priority. I favour the MoSCoW rating method but any will do, a spreadsheet is a great way to do this, I’ve created a sample one here.
In most businesses cash flow is king, so plan for the next 2-3 years and no further, don’t make investments based on what you might need in 4 or 5 years time - make them for what you need now. Sure this might mean changing platform in 3 years time, but your business will have the cash flow to support the investment at that time, if you get ahead of yourself it may not.
- Launch with the minimum feature set you need
- Document your requirements with examples
- Plan for the next 6 - 18 months
Select The Platform
Now that we have the 3 main questions answered we have the information we need to create a short list and select the platform. We’re going to do three tasks here:
Setting the budget
Our budget should be directly related to the objectives, now that we’ve outlined these we can calculate the budget by using a percentage of current turnover or as a percentage of target turnover (i.e. making a capital investment in your business in order to grow).
For an ecommerce platform we’d typically expect this to be in the range of 8 - 10 % of turnover in year one, dropping to 2 - 3% years two and beyond. A platform switch is not something we want to be undertaking very often as it requires a considerable amount of work
Bear in mind that things move quickly in the online world, keep things simple and invest little and often for best results - always inline with revenues.
- Work your what you budget is and let your potential suppliers know what it is, this will allow them to advise you effectively
- As a rough rule of thumb our initial investment should be 8 - 10% of year one revenues, with an ongoing investment of 2 -3 % of online revenues
Creating a short list
Now that we have outlined our objectives, analysed the team, completed the requirements and set the budget we are in a position to create a shortlist of the most suitable platforms.
This process involves researching the various solutions online to understand the features of each platform against our requirements, scoring each platform against the requirements spreadsheet will give us a score for each platform.
You can get a list to of popular ecommerce platforms from HiveMind - which publishes a list of the most popular ecommerce platforms in the Alexa top 1 million websites. You can also purchase a list of ecommerce sites and what platforms they are running from HiveMind - this will come in handy later.
We want a shortlist of 3 platforms, you could have more but given the investment in time required to evaluate each platform, even at a very basic level, 3 is a good number.
Choosing the platform
Once you have your short list it’s time to pick up the phone and get out and see the platforms in action:
Get in touch with the platform providers and arrange a demo of the platform, send over your requirements and, if you’re looking for an agency to do the implementation ask them for suggestions.
As well as contacting the platform providers we can use our HiveMind list of ecommerce sites to identify who is running the platforms on our short list. Find similar businesses that we not directly competitive, give them a call and ask if they would be willing to chat to you about their experiences - this is where LinkedIn can come into its own and help you get introductions to the right people.
If you’re considering using an agency get in touch with a few for each platform and have a chat with them, you’re looking for a good personality fit. Ask them for an initial investment range for your project so you can evaluate.
At this stage we’re looking to get our shortlist down to one platform, so use the requirements spreadsheet and add scoring for investment, personality fit and refine your initial scoring - this will give you an updated score.
We can now select the platform having done our due diligence, if you have an inhouse team conduct a final review with the team, if you’re using external agencies create a short list of 3.
In some cases you may still have 2 platforms on your list, in which case select 4 agencies and ask them to pitch (2 agencies from each platform).
We're experts in all things ecommerce here at GPMD and we will be only too happy to assist you on helping reach your online sales targets.