Partner Article

Building eCommerce platforms for growth

Starting an eCommerce company these days doesn’t require huge investment, and with skill, hard work and good luck you can create a substantial retail business. But as turnover hits a few million pounds, systems and technology can become a real challenge.

Mid-sized ecommerce businesses are likely to have multiple routes to market, which all need to be maintained and kept up to date with consistent product lists, stock availability and images. Similarly, back-end functions grow ever more complex, and day-to-day issues that were once small become time-consuming and laborious to deal with. As a result, everything IT starts to creak.

On top of that, social media marketing, promotions, vouchers and gift tokens, newsletters and recommendation engines all become too large to be handled manually.

An extra 30 seconds per order is nothing when you only have 10 orders a day to process, but when you get 1,000 it quickly adds up to an extra pair of hands. Then there are the inevitable manual errors: an error rate of just two per cent translates into 100 botched orders a week. That’s expensive!

E-tailers need a vision for their business, how it should work and what IT needs to be used to make that happen. Systems and processes must be designed to support the current situation the business is in as well as supporting growth plans for the coming years, based on how the market is likely to evolve:

1. First, the order management system is the lifeblood of any business. Up to now you may have been able to use a bespoke package or a store front on eBay or Amazon for this purpose. A good order management platform will enable you to plug into the wider e-commerce ecosystem too, for instance to manage mailshots, analyse your sales and access multiple channels.

At the same time it should enable you to efficiently manage your products and customers from one place. A good e-commerce platform easily handles different countries and channels, both mobile and traditional. Selecting the right solution is partly about its capabilities, but it is also about the size and momentum of the surrounding systems. The best order management systems will have both excellent features in their own right and an extensive set of plug-ins to link to other services and platforms.

2. If you are selling products, warehousing will become increasingly important as the business grows. Outsourced solutions do work for some businesses, but a growing e-tailer will eventually want to take control of its own warehousing as it’s more flexible and reduces costs per order. Process efficiency in the warehouse is critical to keeping costs under control as order volumes increase. Choose a solution that integrates with your order management system and provides barcoding, optimized pick routes, integration with carriers and logistics, stock replenishment, optimized stock positioning (most popular items close to dispatch), bulk replenishment and reporting.

3. Like it or not, increasing numbers of customers mean an increasing need to interact with them. If you don’t want to be up until 2am every morning answering emails, invest in a good customer service solution. The latter will enable you to track customer contacts and integrate with a variety of communication channels including phone, email and social media.

4. Using a feedback and review service is a great way to obtain customer ratings. On the face of it, this gives you an opportunity to engage with your customers and build loyalty. What is more, though, is that increasingly customers will not buy from an e-tailer unless then can see a strong positive review trail and ratings.

5. It almost goes without saying, but as an e-tailer your market engagement must have social media activity at its heart, almost by default. Therefore, having social media buttons on your site to generate interest in the wider online community is a ‘no-brainer.’

6. Nearly a quarter of online sales are now made from mobile devices, so ensuring that your site is optimised for smartphones and tablets is a must. Ultimately, creating platform-specific apps will help deliver the best user experience, which is vital as customers become more discerning and demanding.

7. As you grow you’ll need more internal IT infrastructure for email, telephony and document storage. These days, there is no real need to invest in your own software, servers or in-house IT support. Most services can be purchased as hosted services, from the ‘cloud.’

8. As you scale up your business, it is tempting to think you’ve become an expert in targeting and selling your product. However, it is vital to keep abreast of new developments in online marketing and not rely solely on tried-and-trusted approaches. Use your customer information to entice them to buy more and find out what attracts new customers. Use analytics and sales cycle tools to boost your effectiveness.

9. Integrate your accounting system with your eCommerce platform and warehouse solution to minimise manual effort. That said, for this integration to work, sound accounting and management processes need to be in place (such as purchase ordering, bank reconciliation and auditing).

10. Proper integration will also enable you to extract business intelligence from your accounting system – spotting trends, predicting peaks and troughs in your sales cycles, calculating profitability – not to mention fulfilling the business’s statutory responsibilities.

This can’t all be achieved at once, so you need to develop a roadmap and work out how to deliver it at a rate that makes commercial sense for the scale of the ambition, the funding and the appetite for risk.

You need to define and deliver the following at every stage:

• clear processes, roles and organisation
• systems and technology
• training and data standards to ensure systems are managed and used correctly
• mechanisms to monitor shopper activity, performance of internal activities, product profitability, as well as ordinary financial reporting.

Getting this right will ensure that costs and errors are kept down, and provide a secure foundation that positions your business for growth.

- Graeme Freeman, co-founder and director, Freeman Clarke

This was posted in Bdaily's Members' News section by Freeman Clarke .