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October 27, 2011 9:49:22 PM PDT
The recently released Forrester Research Online Retailing in Australia 2011: Technology Investment report highlights that e-commerce platforms are a top priority for Australian retailers, with many small to medium-sized retailers flocking to the Magento open source platform for increased control over their e-commerce solutions.
E-Commerce Platform Capability
With 50% of respondents planning to or already re-platforming, the report indicates that this urgency stems from a realisation that entry-level e-commerce platforms deployed in the early stages of business are now not up to task in providing desirable initiatives (such as reviews and ratings and efficient publishing of product content).
Respondents indicated that limitations with e-commerce technology in terms of publishing consistent product data and content, displaying inventory and managing customer data and orders across channels, all represent challenges.
Retailers are also reluctant to surrender the ‘power’ of their core technologies and value control over these systems by managing them in-house, preferring to do this by implementing open source software.
In line with this desire for control, Forrester identified a trend that smaller retailers are flocking to the Magento platform, noting Paddy Pallin, Ohki and Everten as examples of migratory retailers.
This bodes well for eBay, who only this week launched it’s X.Commerce solution, which connects to Magento.
“eBay is assembling a range of e-commerce platforms and other tools that, between them, are designed for everyone from the part-time trader to the national retail giant,’ says Steven Noble, Senior Analyst from Forrester Research. ”This means that some Australian retailers will find they can change e-commerce platforms without changing providers as they grow and mature.”
However the migration to open source comes with its own set of complexities and resource requirements, as well as possible limitations in terms of growing business needs – factors which the report notes will contribute to the plateau in growth of these solutions. Forrester predicts as Australian retailers becomes increasingly sophisticated they will opt for enterprise solutions.
Beyond the Platform
The report revealed that other technology investment priorities include mobile commerce, back-office integration, and technology to support multichannel retail. Another important factor which Forrester points out will eventually affect the technology investment of online retailers, is that of product and content management.
“Providing fantastic product content is one of the keys to online conversion, which is one of the core elements of retail success. Managing this content for tens of thousands of stock-keeping units is potentially an exhausting and expensive exercise, but the right software and process can take away some of this pain,” advises Noble.
Product and content management not only correlates strongly with best practice multichannel retailing (in providing consistent experiences across all touchpoints), but offers a key point of difference from an online search perspective. The report notes that this will be a key consideration for future online retail technology investment, as businesses try to differentiate themselves within the online marketplace.
Food for Thought
When looking for a new e-commerce platform Noble advises retailers to start by defining high-level business, customer experience, and technical requirements, with a focus on how they want to own and operate the technology. ”You will save valuable time by focusing the selection process on solutions that meet your ownership model, support model, and budget needs upfront.”
“Then write use-case scenarios focusing on the evaluation process on your core needs and tasks as a business,” he continues. “Finally, require vendors to demonstrate their products’ abilities to excel in these use-case scenarios in a controlled, consistent manner. This eliminates opportunities to hide the reality of working with their products and ensures you are selecting a vendor with capabilities that support your specific business objectives.”