Winning ecommerce Sites Go Beyond the Shopping Cart How to Avoid the Common Platform Pitfalls that Derail ecommerce Success

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1 Where every interaction matters. Winning ecommerce Sites Go Beyond the Shopping Cart How to Avoid the Common Platform Pitfalls that Derail ecommerce Success White Paper October 2012 By: Shane Blandford, CEO of Orange Collar Media

2 Contents Introduction 3 Key considerations for ecommerce success 3 Supply chain/inventory management 3 Order fulfilment 4 Customer support experience 4 Driving traffic 5 Back-end integration 5 Common barriers to success 5 Comparing two real-world ecommerce site launches 6 Summary: Delivering an optimal shopping experience goes beyond 7 having a shopping cart About the author About the Author 7 2

3 White Paper Introduction Are you able to accomplish everything that you want with your ecommerce platform now or three years from now? If the answer is no, then you should be considering a platform switch sooner rather than later. You won t be alone by doing so, as retailers are searching for every competitive advantage online. Forrester Research conducted a survey asking companies when and if they plan to replace their ecommerce platform and a majority have plans in place: 9% plan to change it within 12 months 12% within 12 to 18 months 25% within 18 to 24 months 20% within 24 to 36 months But don t fall into the trap of choosing a platform with only the features you need today. A shortsighted approach will leave you undergoing another platform migration far too soon in order to satisfy your marketing requirements. Or it will force you to integrate additional solutions over time to address your changing needs and that means more work and more challenges deploying, administering and managing the technologies underpinning your business. The reasons for an ecommerce platform migration are myriad. You may need to enable advanced merchandising and sales, such as mobile applications. You might need to integrate with existing warehousing and inventory systems. Or you may require global scalability, performance, language and social commerce support, as well as the ability to deliver a site user experience that facilitates shopping and keeps customers returning. An ecommerce platform isn t a once-and-done ecommerce sites can quickly stagnate. And it s tough to regain momentum if you do not stay abreast of the latest best practices. In the past, many of these features were seen as nice-to-haves only available to the largest retailers. Now these capabilities are best practices and table stakes for any successful ecommerce site. In fact, without these capabilities, you risk losing significant revenue and market share. Read on for key considerations as you re preparing for your ecommerce platform launch. Key considerations for ecommerce success Building an ecommerce system is one piece of a much larger operation that can t be approached in a vacuum. You need to understand what you re doing well and where you need to improve to deliver an optimal customer experience the ultimate measure of ecommerce success and the one that affects all success metrics. That goes beyond the look and feel of your site. And it s about more than a one-time exercise. The following are the most critical considerations and the ones that often trip up retailers. Supply chain/inventory management Even if you only sell through your ecommerce channel, create a plan for handling back orders, out-ofstocks and low inventory levels. Being able to deliver for your customers means having product in stock and available, and that requires you to maintain an accurate accounting of your inventory. Inventory levels can change quickly, especially at certain times of the year. Consider that while most retailers turn their inventory three times a year, an online retailer can turn inventory in a single month. That s why it s critical to establish a plan for handling inventory. The key is to understand how your supply chain works across your entire business. Specifically, how do you get product into and out of your warehouse, and how do you know how many parts or products are on hand? This is vital for an accurate inventory count and ensuring you re not overselling and under-delivering to your customers. 3

4 As a first step, determine how many channels you re selling products through (for example, your ecommerce site, ebay and Amazon). Then pinpoint how inventory is recognized and reconciled across these channels. For example, do you know how inventory levels are displayed on the platforms that support these channels? Order fulfilment You can present the most dazzling, intuitive easy-to-use ecommerce site featuring popular products that consumers love. But if you don t smoothly fulfil orders, customers will likely be upset and very possibly choose not to purchase from you again. To avoid this pitfall, document your order fulfilment process. Determine how you retrieve the order and start the fulfilment process once an order is placed. For example, do you need to manually submit an order or does your ecommerce system handle this? What is the process for picking, packing and creating a shipping label? How do you ensure the order gets picked up by a shipper? Make sure your production server s DNS settings are configured to allow outbound . Feedback to customers is critical but often overlooked. Consider whether you communicate order and shipment details to customers in real time or if you send out batch communications at the end of each day. If the latter, are you prepared to handle associated customer support issues? For instance, if someone places an order for next-day delivery and doesn t receive a timely confirmation that the order is on its way, the customer is likely to call your company for an explanation. Customer support experience Unless you re selling your own products, you re competing against other retailers selling the same products. That means price and customer service set you apart. Here you need to understand how your customers receive support and the ramifications for your business. Start by mapping customer touch points so you can ensure meaningful, streamlined interactions. While this is crucial to customer satisfaction, it s also critical to your bottom line. After all, customer service is a cost centre for any business, and the ability to minimise direct interaction with customers has a tremendous impact on your expenses. Next, document your support model and processes. For example, will you handle customer service via live chat, phone or through an online form? When you issue an RMA for a returned item, is the process smooth from the customer s perspective? The reality is that you ll need to deal with unhappy customers. Think through your process for handling them, and understand how your ecommerce system needs to support those interactions. For example, if a customer calls upset because he hasn t received confirmation of an order, your customer service representatives need access to all the order and shipping details in real time. Or can you empower customers to check on their order and shipment status by logging into your site? Use a CRM system that will allow you to track responses, response times and create metrics to monitor the performance of your customer service team. Ultimately you need to understand how all your processes impact customer service, such as whether you can expect the volume of phone calls to go up or down. Just as important, you need to monitor and analyse where you spend time interacting with customers before and after platform implementation, making adjustments as necessary to keep customers happy and costs in check. 4

5 Driving traffic Traffic won t appear just because you have an ecommerce site. Considering that repeat customers are your most valuable ones, you have to give them reasons to keep returning to your site. The ecommerce platform you choose can make this easier not harder. Be sure it supports you in the following ways: Validate that the ecommerce platform supports your full range of marketing needs including integration with marketing software so you can access and manage everything from a single Landing pages. Ensure the platform allows you to create landing pages and track conversion rates so you can understand your return on investments (ROI) in Google AdWords and other online marketing tactics. marketing. Verify that the platform supports integration with services. This is essential. For example, when you want to follow up with a site visitor who abandoned the shopping cart, you may be able to salvage a lost sale by sending the shopper a coupon via . Analytics. Make sure you can analyze your site s performance and pinpoint issues so you can respond to them quickly and avoid revenue loss. Back-end integration Avoid inelegant bolt-ons and, instead, look for the ability to seamlessly integrate with backend systems. Because your ecommerce site is tied closely to your overall operations and processes, you want to make sure you can easily integrate with relevant back-end systems. With that in mind, identify all the systems that need to communicate with your ecommerce platform. For instance, you likely need to connect with your ERP system for multi-channel fulfilment. Determine how you are doing that today, or how you will need to do that going forward. Just as important, decide which system is the single source of truth for customer and product details and what it will take to integrate with it. Don t overlook what s required to create a unique shopper experience. These days that requires the ability to interact with customers and trigger activities such as product recommendations based on site activity, such as past purchases or purchases made by similar shoppers. Find out if the ecommerce platform supports event-driven integration, for example, by automatically updating the warehouse and customer support in real time about a purchase. Common barriers to success In general, retailers come up against three issues that make it challenging to achieve ecommerce success: Failing to grasp the limitations of their data set Operating in silos Being in firefighting mode Failing to grasp the limitations of their data set While many factors play into ecommerce success, the ultimate determinant is data cleanliness and availability. After all, data underpins the entire ecommerce process. Understand your product set and make sure all relevant products are associated with each other. In many cases, retailers believe their data is clean and that they have an abundance of it. Unfortunately, the existing data set often doesn t support the retailer s needs. For example, an apparel company may want to display clothing options by size, color, material, gender and category (such as workout or casual wear ). To show these options on the site, your database of product descriptions must precisely cover all possible permutations. At the same time, you need to think about how products are associated with one another for cross-selling purposes. For example, which trousers should you suggest to go with the dress shirt your shopper is about to purchase? Operating in silos Because ecommerce is integral to your overall business, all your business units and departments need to communicate with the ecommerce group. 5

6 Yet too many organizations operate in silos and this impacts online shoppers, who must contend with slow-loading pages, back orders, and with customer service reps who struggle to provide updates on inventory availability or shipping dates, for example. Map out and consider how activities and changes in your business impact your ecommerce platform. For example, what happens if you engage a new shipping provider or open a new distribution center? At the same time, marketing and IT need to be on the same page. In essence, they both own the site and need to be unified to ensure marketing campaigns launch without a hitch and that the site can handle the resulting traffic surges. This means they have to make decisions jointly and work together consistently to understand expectations and limitations on both sides. Being in firefighting mode Many retailers find themselves scrambling to address seasonal requirements with the latest and greatest technologies. Rather than making drastic modifications to the ecommerce platform every year, focus on continuously improving your processes and site. This ensures you keep pace with shopper expectations and helps you avoid the last-minute holiday site planning that leaves everyone stressed. Comparing real-world ecommerce site launches The following two real-world examples help illustrate the importance of setting realistic expectations, embracing best practices and avoiding the pitfalls presented. Launching an ecommerce site In the fall of 2010, Orange Collar Media, a web development company, and Peer 1 Hosting began working with a retailer selling home décor through seven brick-and-mortar outlets. The retailer had a single web page and wanted to develop a full online retail presence. It also wanted to go live in 90 days. However, the retailer soon learned this was unrealistic for a site representing thousands of products. Orange Collar Media normally pulls product data from a client s existing site in two weeks or fewer. But because it was essentially building the site from scratch, the web development firm had to work closely with the client for four months to define all product descriptions, pricing rules and gather all necessary product images. Next, Orange Collar Media and the client scripted the purchase process. This addressed everything from how the company would drive site traffic and who processes the order on the back end, manages stock and picks and packs an order to which shippers would be used and how returns would be handled. When it came to back-end integration, Orange Collar Media had to connect the new platform with the client s existing POS system, which presented data from cash registers in the client s seven retail outlets. The firm had to transfer CSV files at timed intervals between the client s POS system the source of truth about inventory and stock status and the new ecommerce platform. From start to finish, the new platform launch took 13 months. Re-launching a platform For another project, Orange Collar Media worked with a client changing ecommerce platforms. Because the retailer already had an ecommerce presence, the web firm was able to automatically pull product data, descriptions and photos for the 6,000 SKUs into the new platform. 6

7 At the same time, the client already had established processes for fulfilment, handling customer service and RMAs. As a result, Orange Collar Media and the retailer could focus on getting the most out of a new platform and addressing unique needs such as associating products at scale. The re-launch was completed in four months. Summary: Delivering an optimal shopping experience goes beyond having a shopping cart Consumer expectations about online shopping are continually changing, along with the ecommerce platforms that enable that experience. Those retailers that approach an ecommerce platform project from a strategic standpoint are able to satisfy those expectations while extracting maximum value from their investment. The first step down a strategic path is to honestly assess your existing capabilities and weaknesses when it comes to ecommerce. This includes actively developing related processes and reviewing the product and pricing data that will underpin your site. Taking this step will empower you to engage in an honest conversation with your web development firm, leading to lower costs and faster time to market. Remember, your goal is to launch a platform that will enable you to deliver an optimal customer experience both today, and in six months, 12 months and so on. If you plan your platform to only address current needs, you ll find yourself re-launching in another year or two. However, by choosing a platform that satisfies a future-looking roadmap of ecommerce needs, you should be able to get up to four years of value from your platform. At the same time, you want to continually adapt your platform throughout the year to keep pace with changing shopper demands. This also helps stave off the need for a complete re-launch or migration, while also eliminating seasonal stress for your IT team. About the Author Shane Blandford, CEO of Orange Collar Media Orange Collar Media is a Magento-focused agency located in Denver, Colorado. As a Peer 1 Hosting Partner, OCM is recognized for creating some of the top-performing Magento sites. As the CEO and founder of Orange Collar Media, Shane brings over 15 years of combined software development and business experience to the table. Having a very strong technical background has allowed Shane to lead his team to consistently produce technically complex Magento Enterprise sites. Call us to get started now / peer1.com 7

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