7 Critical Questions To Ask Before Implementing an ecommerce System (and One Good Answer to Each) BridgelineDigital.com Blog.BridgelineDigital.

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1 7 Critical Questions To Ask Before Implementing an ecommerce System (and One Good Answer to Each) BridgelineDigital.com Blog.BridgelineDigital.com

2 7 Critical Questions To Ask Before Implementing an ecommerce System Page 2 Introduction ecommerce is booming, with retail ecommerce sales growing from $335 billion in 2006 to $711 billion by 2010 (see Fig. 1). Online sales are increasing faster than offline; sales of the top 500 online retailers grew 11.7% in 2008 vs. only 1.4% growth for the total retail sales market. According to IDC Research, more than one billion consumers worldwide will spend $1.2 trillion shopping online in Business to business (B2B) ecommerce will be ten times larger, totaling $12.4 trillion worldwide in Implementing an ecommerce website is an ambitious undertaking even with the right software -- and virtually impossible without it. An increasing number of software vendors are offering a wide array of different ecommerce solutions that marketers can use to add online shopping capabilities to their web sites. In Gartner s most recent Hype Cycle for Commerce, 2009, they report that Organizations no longer view ecommerce as a risky investment; instead, it is considered a strategic customer growth-and-retention competence and a competitive advantage in a tough economy. In a recent survey from Internet Retailer, one out of three online retailers said that choosing a new ecommerce platform was their top application priority for this year. But which ecommerce solution is right for your business? Here are 7 critical questions you must ask before implementing an ecommerce package -- and the answer to each Billions Years Years Billions Fig. 1. Growth in ecommerce sales volume

3 7 Critical Questions To Ask Before Implementing an ecommerce System Page 3 1. Does the ecommerce solution offer facet-based product catalog management that makes it easy for shoppers to find what they want? A product is something you purchase. A product has many facets, or attributes, that describe its properties. A television can be a Samsung, Panasonic, Sony, Sharp, Toshiba, or other brand. It can cost under $500 or over $2,500. It can be an LCD, plasma, LED- LCD, or rear-projection TV. Size can be portable, standard, or wide-screen, with screens ranging from an inch to five feet and larger. The TV can display a single channel or multiple channels with picture-in-picture display. It can have a built-in DVD or not. Each of these facets needs to be its own captured data point. Each make and model of television set, each combination of features, has its own SKU. In its simplest form, a product is defined by its SKU (stock keeping unit) -- a unique identifier that relates the purchase to an actual physical object. A product will inherit all SKU properties and have many properties of its own including: Unique ID Product type or category Type (single SKU, multiple SKU, bundle, etc.) SKU Description Specification Images Documents SEO-Friendly product string The SKU is useful to the merchant, but consumers don t know or use SKUs when ordering. Therefore, when they visit a website, they must be able to search or navigate to the exact product they want to buy. On large ecommerce sites with hundreds of products and variations, this must be made as simple as possible. A facet-based product management catalog makes it easier for consumers to find exactly what they want to buy based on its facets. The visitor specifies the facets; e.g., a black Samsung plasma TV costing under $1,200 with a 20-inch or larger screen. The ecommerce system searches the product catalog and brings the visitor to a page showing models that fit the criteria.

4 7 Critical Questions To Ask Before Implementing an ecommerce System Page 4 In addition, the product catalog management tool should allow you to publish multiple product images and rich media files to more appealingly present products to your online customers. The commerce solution should also allow users to add product reviews and ratings to your website, all captured as faceted data. 2. Is there a dashboard for tracking your site s ecommerce performance? The ecommerce solution should feature a dashboard that provides you with a comprehensive, real-time overview of your store s performance at a glance. From reports on sales trends, buyer demographics, and profit margins to alerts on low inventory, fulfillment deficiencies, and production issues, the dashboard enables users to view information that is critical to your store's success, all on one screen. Dashboards give you an overview of your online business performance in realtime. Ideally, the dashboard should be the first thing you see when you log onto the ecommerce application. With this direct window into performance metrics, you can quickly and easily view sales trends, demographics, profit margins, inventory levels, inventory alerts, average checkout times, potential production issues, and delivery times. Realtime information makes for better business decisions, allowing you to manage your online operations with confidence and ease. The dashboard should also provide administrators with a link to manage live customer support chats. When a customer chat request comes in, the dashboard alerts an administrative user, who then initiates the chat. The dashboard should display a list of queued chat requests and active chats. Ideally, this list can be filtered to show historical chats so the administrative user can view the content of past chat conversations.

5 7 Critical Questions To Ask Before Implementing an ecommerce System Page 5 3. Does the system enable you to implement promotions and specials such as price sets, coupons, discounts, product reviews, and free shipping & handling? Merchandising is a key component of online marketplace success. A feature-rich ecommerce solution has built-in merchandising tools to make this an effortless part of your strategy. Through the use of coupons, featured product placement, pricing books, product reviews and ratings, as well as free shipping options, your customers can be optimally engaged throughout their shopping experience. The use of complementary product placement opens the door to up-sell without pressure, and the ecommerce solution should enable you to run specials and promotions around complementary items. Merchandising capabilities to look for in your ecommerce software package include: Price sets different pricing can be applied to different customers based on their user profiles. For example, visitors who are frequent shoppers may dynamically be shown lower prices for some or all products. Different buying groups (e.g., levels of site membership) can also be given special pricing. Promotions promotions are time-based discounts that are applied to the shopping cart at check-out time. They can be a percentage or dollar discount off individual products or the entire order, and store-wide or limited to a specific group of products. Coupons coupons are cash equivalents applied to the shopping cart at checkout time. The software should be flexible so that the marketer can set the start and end time of the coupons, and determine whether they are transferable and can be used in tandem with other promotions or special pricing. Coupons need to be proactively produced and distributed, so the ecommerce solution should have an interface for creating coupon keys. The system should display a page listing of all coupons the customer has redeemed and registered at the site that can be used during checkout. Recommendations similar to up-selling and cross-selling, recommendations are suggestions: when the customer buys product A, the ecommerce solution can recommend that the customer may also want to take a look at products B, C, and D.

6 7 Critical Questions To Ask Before Implementing an ecommerce System Page 6 Features this capability allows marketers to manually or dynamically group certain products in special categories. These include manager s specials, top sellers, bargain basements, and hot new products. Wish Lists customers can easily save their favorite purchased and browsed products for future reference or to share with others. Customers can have multiple wish lists, each with its own name (e.g., sports equipment, exercise equipment, Christmas gifts). At any time, the customer can move individual items or an entire wish list to the shopping cart. Free and discounted shipping a special shipping code when redeemed allows a customer to have free or discounted shipping (based on a service level of your choosing; e.g., same day, next day, standard air, ground) on their order. The code may be limited to one per customer and the first order only, if desired. The marketer can select which products are applicable for this promotion. 4. Does the ecommerce solution enhance search engine optimization? Google likes URLs with key words incorporated into them. Your ecommerce solution should create key words based on product attributes including product name, model number, and unique SKU ID number. When product names (e.g., Panasonic drill) appear in the URLs, the pages are ranked higher by Google. The site is bookmarked so that an SEO-friendly URL is displayed whether the visitor clicks on category, subcategory, or product name. For instance, would display as the URL if a user clicked on the power drills menu button from the home page. Also, the URL for a product detail page should always be the same regardless of the category or path the user navigated to get to the page. Search engines don t like repeat pages (i.e., URLs) with the same content.

7 7 Critical Questions To Ask Before Implementing an ecommerce System Page 7 5. Are you able to edit product and commerce information on your site inline and in response to real-time analytics? Native integration of the ecommerce solution with analytics can significantly shrink the action chasm the lag between when the metrics are measured and when the analytics reports are read and acted upon to compress cycle time for website improvements. As you are reviewing the web page, you can use drag-and-drop GUI controls and right-click menus to see how suggested improvements to sales pages would actually look on the screen before you post them live to the site. In addition, once you go live with an updated page, you can track the performance of the revision, compare it with how the original page performed, and determine whether your improvements produced positive changes. You can simultaneously view an analytics report and the web page being analyzed in the same system, giving you a clearer view of how content and design impact sales performance and enabling you to accurately measure readership and revenues to every commerce-related area of your website on the fly. Tight integration of ecommerce and analytics enables you to optimize orders from every sales page based on what s working and what s not, significantly improving revenues and maximizing website ROI. The analytics chart can be time-stamped with the time and date the changes to the page were implemented, allowing you to compare orders, abandons, and revenues before and after that date. That way you can see on the report whether the improvements to the sales page in fact boosted orders and revenues. 6. Is the ecommerce solution s infrastructure robust enough to ensure peak performance and availability during busy high-volume seasons? The ecommerce package must work with existing hardware and software while conserving IT resources. Content objects should be placed in RAM or on the local drive to cache data, ensuring that dynamic pages assemble and serve rapidly.

8 7 Critical Questions To Ask Before Implementing an ecommerce System Page 8 Keeping the content separate from the presentation templates allows content to be stored in databases for fast and easy dynamic access. Caching enables clustering of database servers, creating load-balance environments with site scalability and server failover for greater website availability. A scalable ecommerce package can be load balanced in a web farm, use external storage devices, and handle database clustering. With database clustering, you have multiple servers that act as a single server; if one fails, the system keeps running. Is the ecommerce solution a module that is part of an integrated suite of web applications built on a common platform? These packages can have a high degree of stability and robustness. The more systems implemented and supported by the vendor, the more bug-free the software is likely to be. 7. Does the software allow you to customize special applications for your store or integrate with third-party applications? Many ecommerce vendors build their solutions as closed proprietary platforms. As a result, they cannot be modified by the user. If you want to extend the administrative functionality of your ecommerce system, you often cannot do so. Look for an ecommerce solution built using.net and other industry standard platforms, popular databases, and open architectures, so you can modify the ecommerce functionality in-house to meet current or future needs. Flexible.NET-based software also allows seamless integration with third-party components. The ecommerce solution should allow online purchases to be made with all major credit cards. It should also give you the flexibility to accommodate any other payment systems your customers want to use. Systems built on mature technology platforms are highly robust and resilient, minimizing down-time. In addition, the ecommerce solution should be able to use standard authentication protocols available in the platforms upon which it is built, enhancing control and security. Use of standard protocols also makes it easier to integrate the commerce platform with external applications or data.

9 7 Critical Questions To Ask Before Implementing an ecommerce System Page 9 Ask ecommerce vendors how easily their solution can be integrated with new and existing applications. By buying only solutions built with open architectures, you gain the ability to modify those systems in-house. The ecommerce architecture should be based on open standards such as XML and Web Services, with the internal programming based on.net, Java or other industry standard platforms. Integration with your other web applications can be achieved with pre-built connectors, custom wrappers or connectors, proprietary APIs, Web Services, or an open or standard development language. An open-source ecommerce solution can be easily customized to fit your business. Note however, that if you modify an open-source system, you run the risk of breaking all future integration and functionality. And it may be difficult to get technical support for your modified version. A closed-source system can still provide APIs to allow integration with other systems; however, the level of control is less than with an open-source system. Another option is to implement an ecommerce solution that is part of an integrated suite of web applications. These applications can address key interactive business requirements such as web analytics, ecommerce, and e- marketing. A software suite in which web applications are natively integrated eliminates the time and cost of writing your own connectors.

10 7 Critical Questions To Ask Before Implementing an ecommerce System Page 10 Integrating ecommerce with other web applications Native integration allows data-sharing between ecommerce, analytics, and other applications in real-time. This in turn greatly compresses the time frame in which consumer behavior is measured and analyzed, and the information used to guide site improvements that improve revenues and other key performance metrics. When ecommerce is natively integrated with analytics, you can measure metrics related not just to page views, clicks, and downloads, but to actual purchase activity. For every customer, you know what they bought, how much money they spent, the pages they looked at before landing on your shopping cart, the section of the page they clicked on to reach the cart, how they were driven to your site, where they entered the website, and where they exited. User profiles should be automatically assigned to visitors based on actions taken including pages viewed and purchases. For instance, a visitor who has made two or more purchases may be assigned to a Frequent Shopper user profile group. Based on their frequency purchases, these frequent shoppers may be offered lower pricing than other site visitors. Content Management Marketing ecommerce CRM Personalized Content Measure Effectiveness Manage Operations Audience Segments User Behavior Click Streams Usage Scenarios Analytics Open/Clicks A/B Testing Reports (polls/surveys) Product Correlations Operational Reporting Inventory Controls Fig.2. Integrating ecommerce with analytics allows tracking of metrics based on actual dollar sales.

11 7 Critical Questions To Ask Before Implementing an ecommerce System Page 11 With data level integration, all applications and modules share a common data set. Sharing of information between applications enhances decision-making and simplifies site maintenance and updating. At the deepest level, communication automatically takes place between analytics and other applications such as ecommerce and content management. Dynamic visitor segments and user profiling drive persuasive, sales-boosting content to the right users at the right time. Result: enhanced user experiences resulting in higher conversion rates, reduced shopping cart abandons, and increased orders and gross revenues. With true commerce-delivery integration, the analytics package can automatically assign user profiles to visitors based on their web site usage and purchase activity. Integration of analytics with ecommerce and content management improves website performance with continual data-driven refinements. Some vendors go a step further and integrate their ecommerce software with back-office fulfillment operations, enabling marketers to completely automate order-taking and fulfillment. In-house or third-party fulfillment centers can be given access to the ecommerce solution s shopping cart so they can pull, pick, pack, and ship orders as they come in. Flexible licensing options The ecommerce vendor should offer users their choice of either a Software as a Service (SaaS) licensing model or a traditional perpetual license option. The SaaS arrangement allows users to spread their licensing costs over several years. It also eliminates the responsibilities of supporting the required back-end infrastructure. By 2013, 40% of ecommerce deployments will use a complete SaaS solution, and 90% of ecommerce sites will subscribe to at least one SaaS service; e.g., product reviews, recommendations, social sales capabilities. A traditional perpetual license permits customers to bring the ecommerce application in-house if desired. The maintenance agreement should entitle the license holder to all upgrades and enhancements at no extra cost.

12 7 Critical Questions To Ask Before Implementing an ecommerce System Page 12 Conclusion and recommendation When evaluating ecommerce systems for implementation, ask these 7 key questions: Does the software offer a facet-based product catalog? Is there a dashboard for tracking key ecommerce metrics at a glance? Is it easy to implement promotions and specials (e.g., coupons, discounts)? Does the ecommerce software optimize the site for search engines? Can you edit product information inline on your site in real time? Can the infrastructure ensure availability and performance during highvolume seasons? Can the ecommerce package be easily customized or integrated with third-party applications? Finally, look for an ecommerce package that can be natively integrated with analytics, content management systems (CMS), and other web applications. Automated data-sharing between modules in real-time can greatly enhance the performance and ROI of your website. Native integration allows data-sharing between ecommerce, analytics, and other applications in real-time. This in turn greatly compresses the time frame in which consumer behavior is measured and analyzed, and the information used to guide site improvements that improve revenues and other key performance metrics. When ecommerce is natively integrated with analytics, you can measure metrics related not just to page views, clicks, and downloads, but to actual purchase activity.

13 7 Critical Questions To Ask Before Implementing an ecommerce System Page 13 About the Author Brett Zucker is Bridgeline Digital's Executive Vice President and Chief Technical Officer. Mr. Zucker has been with Bridgeline since From 2004 to 2006, he was Bridgeline s Executive Vice President and General Manager of its New York business unit. From 2002 to 2004, Mr. Zucker was the Vice President of Delivery for Bridgeline s New York office. Prior to joining Bridgeline, Mr. Zucker was the Director of Development and Delivery for Lead Dog Digital, Inc., a custom Web application development company Bridgeline acquired in Prior to joining Lead Dog Digital in 2000, Mr. Zucker served in management positions with AppNet and Agency.com. Mr. Zucker holds a BS degree in Electrical Engineering from Cornell University and a Masters in Business Administration from Harvard Business School.

14 7 Critical Questions To Ask Before Implementing an ecommerce System Page 14 About Bridgeline Bridgeline is a developer of web application management software and awardwinning interactive business technology solutions that help organizations optimize business processes. The iapps Product Suite is an innovative SaaS solution that unifies Content Management, Analytics, ecommerce, and emarketing capabilities enabling business users to swiftly enhance and optimize the value of their web properties. Combined with award-winning interactive technology services by Microsoft Gold Certified development teams, Bridgeline helps customers to cost-effectively maximize the value of their rapidly changing web applications. Bridgeline's teams of developers specialize in web application development, usability engineering, SharePoint development, rich media development, and search engine optimization. Bridgeline is headquartered near Boston with additional locations in Atlanta, Chicago, Cleveland, Denver, New York, Washington, D.C., and Bangalore, India. Bridgeline currently has over 600 customers ranging from middle market organizations to divisions within Fortune 1,000 companies that include: Healthcore, The Bank of New York Mellon, Marriott International, Berkshire Life Insurance, PODS, Honeywell, Budget Rental Car, Washington Redskins, AARP, National Financial Partners, The Packard Foundation, DTCC, Cadaret, Grant & Co., National Insurance Crime Bureau, American Academy of Pediatrics, and Shaw Industries (a Berkshire Hathaway Company).