Way back at the end of the 20th century, ecommerce was an optional extra. These days, it’s an essential part of any business plan. If you want to grow your enterprise, you need a great online store and a marketing strategy to match; the right ecommerce platform can help you achieve both.
“You only have to do a few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett
In this post, we’ll look at where ecommerce came from, what an ecommerce platform is, and the two types of platforms available today. We’ll also go through 15 of the biggest ecommerce providers to see which ones measure up, and which ones fall short.
The Rise of Ecommerce
Ecommerce is older than you might think. Primitive computer networks like Electronic Data Interchange (EDI) and ARPAnet emerged in the 1960s, and almost as soon as they did, businesses began buying items electronically. Some of the first transactions involved document exchange; later, companies bought ingredients or products in bulk at wholesale prices.
The real breakthrough for commercial ecommerce came in 1991 when the National Science Foundation lifted its ban on commercial internet usage. Suddenly, people all over America could dial into the net and visit websites via browsers like Mosaic (later Netscape). Launched in 1994, the Secure Socket Layer (SSL) protocol enabled online encryption and made secure online shopping possible.
Since then, online stores have absorbed a larger share of retail sales every year. By 2007, ecommerce had a market penetration of 5.1%; in 2019, 16.9% of all retail sales happened online.
Why is Ecommerce Essential?
For one, there’s the growth potential. People are busier than ever, and they need products delivered to them at home; effectively, we can see that reflected in ecommerce growth trends. Since 2015, the year-on-year quarterly growth rate for ecommerce sales in the USA has hovered between 10.5% and 17%. In the first quarter of 2020, U.S. ecommerce sales totaled more than $160 billion. Now tell me you don’t want a slice of that pie!
We can observe the effects of the society-wide crisis on ecommerce if we look at data from the second quarter of 2020. Consumers in America turned to the internet when the COVID-19 pandemic struck — and not just for groceries. Reviewing KPIs from July, we can see that value-driven customers on the hunt for clothing, entertainment, toiletries, and other items drove year-on-year ecommerce sales up by between 35% and 114%, on any given day.
These consumer trends are likely to stick around. According to researchers from University College London, new habits take an average of 66 days to form — after that, they’re hard to break. Keeping those facts in mind, we can safely conclude that people will choose online shopping, rather than the local mall, long after the end of this coronavirus emergency.
You can cash in on these changes in the ecommerce landscape with a scalable ecommerce platform. If you encourage consumer brand engagement, offer a seamless checkout process, and deliver products quickly, you’ll boost your bottom line.
What is an Ecommerce Platform?
In short, ecommerce platforms are software applications businesses use to create online stores. The best ecommerce platforms are intuitive and help companies manage their websites, marketing, SEO strategies, and operational schematics. They offer site-building tools and make ecommerce more accessible.
Does the phrase content management system (CMS) sound familiar? Well, cutting-edge ecommerce platforms include a CMS, which wraps backend content management applications (CMA) and front-facing content delivery applications (CDA) into one convenient package. You add content via the CMA interface and the CDA updates your site.
Really stellar ecommerce platforms include built-in omnichannel options. Omnichannel retail basically offers a seamless purchase experience across devices. Integrated omnichannel software optimizes all your data, product descriptions, web content, blog posts, etcetera — so it looks great on any gadget. Customers can begin shopping on their smartphones and check out using their laptops.
Types of Ecommerce Platforms
So you want to set up an online store? In that case, you’ll need an ecommerce solution. Most businesses choose one of two main kinds of ecommerce platforms: open source and Software-as-a-Service (SaaS). Let’s explore the advantages and drawbacks of each type.
1. Open source.
Open-source ecommerce programs let you see under the hood. Unlike proprietary software (think Microsoft Office or any program ever made by Adobe), they use a transparent development process to hone and develop codes. Usually, open-source programs are community endeavors — and they’re largely labors of love. Some of them involve software engineers from all over the world, almost none of whom are paid to work on the project.
End users get licenses to modify and make additions to open-source software. They can use the software as is, or they can change it to suit their purposes. Companies choose open-source ecommerce programs over SaaS when they want to maintain total control over their online stores.
Businesses who select open-source programs avoid many of the ongoing fees associated with SaaS platforms. There’s a catch, though: companies have to find their own hosting, and they won’t have access to a dedicated tech support team. Often, users find solutions to issues with open-source software via dedicated forums, but they don’t benefit from quick answers via email or telephone.
Unlike SaaS solutions, open-source ecommerce options depend on plugins to perform vital store actions. Components attach to each other like Lego bricks: there are plugins for post-sale emails, plugins for social media integration, and plugins for parcel tracking. Third-party integrations form a big part of open source ecommerce strategy.
Open source ecommerce options include Magento, PrestaShop, WooCommerce for WordPress, and OpenCart.
Open source advantages:
- You have complete control over your store.
- Free and premium open-source software is available.
- You can customize your store using plugins and other third-party integrations.
- Community forums offer support and develop solutions.
- No ongoing fees to a SaaS provider.
Open source drawbacks:
- You need technical and coding knowledge to achieve a good result.
- The modular approach is more complicated than SaaS.
- Bugs and security patches become your responsibility.
- No on-demand tech support.
- Higher setup costs if you need to contract with a web designer.
- Heftier ongoing costs if you need to hire a website maintenance team.
- You have to find a good web host for your store.
Software-as-a-Service providers offer package solutions for ecommerce. When businesses like Di Bruno Bros choose SaaS platforms, they gain access to everything they need to set up, promote, and maintain their online stores. SaaS software is cloud-based, so it’s accessible from any location, anywhere in the world. Because SaaS platforms provide hosting, businesses don’t need to find reliable web hosts or buy and maintain their own server systems.
People who enjoy modular construction projects get a kick out of open source; individuals who prefer things to “just work,” go for SaaS solutions. There’s something to be said for easy-to-use software, even if it comes with a monthly or a yearly fee. Many business owners choose SaaS over open source because they’re busy — basically, it’s just one less thing to think about.
Dedicated programmers give SaaS ecommerce platforms continual attention, fixing bugs and patching security vulnerabilities quickly and efficiently. Updates roll out to users automatically, who benefit from system improvements immediately. In contrast, businesses that select open-source software usually have to perform manual updates.
Unlike open-source programs, SaaS platforms do charge subscription fees. These depend on the level of service, the number of users, and the size of the ecommerce site in question. On the face of it, these fees seem like a drawback. In reality, companies who have to hire their own web designers and maintenance teams to take care of open-source programs and related plugins often pay more in the long term.
SaaS ecommerce solutions include BigCommerce, Volusion, Shopify, Big Cartel, and 3DCart.
- It’s an out-of-the-box ecommerce solution.
- No coding knowledge required.
- SaaS is scalable, so as your company grows, it grows with you.
- PCI compliance makes your website eligible for payment provider gateways.
- You don’t need your own tech team.
- You won’t need to find an external web host.
- Easy integration and omnichannel retail options.
- You can’t see or customize the source code.
- Limited number of applications available.
- Access to your ecommerce platform depends on an internet connection.
- You don’t have complete control over your website design.
- Annual or monthly fees to pay.
Your Ecommerce Platform Is the Foundation of Your Online Store
Historically, many companies chose familiar open-source options like WordPress to expand from the high street into ecommerce. Business owners poured time and effort into their sites, selecting themes, connecting plugins, adjusting code, and adding products. As their online businesses grew, their databases grew, and their backends got more complex.
Modular open-source platforms are not impossible to use as enterprise-level CMSs, but they do get bulkier and slower as they increase in size. Plugins add functionality, but the more plugins you have, the more security risks you have to deal with. If hackers attack your backend, you’re on your own.
Open source doesn’t always travel well, either. Moving an open-source website to a SaaS solution is a complex process — particularly if you have a huge product database, a long-standing sales history, and a lot of plugins. Again, it’s not impossible (actually, many businesses migrate to SaaS every year), but it is a pain.
As you consider your options for a website, ask yourself three questions:
- How much time do you want to spend dealing with your site?
- How much time do you have to learn about your ecommerce platform?
- Are you better off spending your limited time on other aspects of your business?
Ecommerce may be digital, but in many ways, running a successful website is the same as running a physical warehouse or a production facility. Companies like Larq, for example, think strategically and plan ahead to build on their own successes — and you can emulate that approach. The right ecommerce platform will help you keep costs down, engage with your customers, and grow your business.
Costs of Building and Running an Ecommerce Site
Great websites aren’t free. Some associated costs are inevitable — but that doesn’t mean you need to take out a second mortgage to create an ecommerce store. If you’re savvy, you can stay on budget and still develop a stellar online presence. Here are three of the most significant expenses associated with building and running an ecommerce site.
1. Maintenance costs.
Site maintenance costs vary a lot and depend on the size of the site and whether it’s based on open-source software or SaaS. Ecommerce stores hosted by SaaS providers generally don’t have any extra monthly maintenance fees to pay, because they’re included with the SaaS subscription fee. On the other hand, sizeable ecommerce sites built with open-source software can cost their owners as much as $400 a month. Customized sites and custom apps sometimes cost more than $1,500 a month to maintain.
If you don’t maintain your site and parts of it begin to break, you risk losing customers. If you don’t fix security vulnerabilities, you risk a data breach. Without a doubt, site maintenance is essential, whether you go for an open source or a SaaS ecommerce solution.
Open-source software upgrades are generally free — but only if you install them yourself. If you have the skills and time (and remember) to upload the latest version of WordPress or Magento software, you won’t see any associated upgrade costs at all. If, however, you’re a busy CEO and you have to hire an expert to perform the upgrades for you, you’re at the mercy of their hourly fee. If you don’t upgrade, you’ll leave your site vulnerable to security threats.
In contrast, SaaS platforms push upgrades to all sites automatically and include all associated costs in their monthly fees. Many business owners appreciate having upgrades taken care of; it’s one less thing to think about.
3. Adding new integrations.
Ecommerce changes all the time. Consumer habits, trends, and technologies develop constantly, and businesses have to innovate to keep up. User engagement drives conversion, so your job is to keep people interested in your site for as long as possible. You can do this with social media galleries, videos, share buttons, and other website integrations.
There are additional ongoing costs associated with ecommerce: content (product descriptions, blog posts, web content), graphic design, and marketing, for example. To run a successful online business, you need to think about what you can afford and what you want to achieve with your monthly budget.
Factors That Determine Which Ecommerce Platform You Select
To choose the right ecommerce platform, you need to look at factors beyond development and operational convenience. To make a profit online, your site has to be responsive, secure, and easy to scale. Let’s look at five of the most important factors for ecommerce success.
1. SEO friendliness.
You won’t make any sales if customers can’t find you. Search engine optimization (SEO) techniques help you show up on Google, Bing, and other major search engines. The very best ecommerce platforms include tools to make SEO easier, whether you’re writing product descriptions, web content, or blog posts.
First, the SEO must-have is a custom domain name. If you don’t have a memorable domain name, you won’t get very far. You also need to be able to add meta tags and meta descriptions to pages, posts, and product descriptions. Other essential default features include:
- The ability to add captions and descriptions to images.
- Pagination in product search results.
- Ability to create an SEO-friendly URL structure.
You’ll also need API integration for Google Analytics. If you can gain access to (or create) behind-the-scenes elements, like the robots.txt file, in your website’s root directory, you can draw attention to specific pages on your site.
2. Mobile responsiveness.
Smartphones are probably the most dominant gadget on the market today. About 79% of respondents to a recent poll said that they’d made purchases on their phones in the previous six months. Researchers predict that by 2021, roughly 54% of all ecommerce transactions will happen on smartphones. The verdict is in: mobile optimization is essential.
To stay ahead of the smartphone shopping curve, your ecommerce platform has to offer responsive templates and themes. A responsive theme recognizes each visitor’s device and adjusts your site’s format accordingly: images, text, menus, and other site elements stay accessible and visible. Pages load quickly, visitors stick around, and conversions follow.
3. Customer support.
You know your ecommerce interface back to front, you’ve spent evenings reading about SEO, and your product photos are perfect. You think you’re ready to rock — but then your images won’t upload. Disaster! You need help from a dedicated customer support team, and fast.
If you use open-source software, forums are your go-to solution when things go wrong. Often, you’ll find the fix you need in a jiffy. Sometimes, however, users give conflicting advice — and that can make it hard to solve problems promptly. Employing an in-house expert for your open-source software is a viable solution, but it’ll cost you.
World-class SaaS platforms generally offer support 24/7 via email, phone, and live chat. Tech experts talk you through less serious issues and access your backend to fix complex problems. You spend less time looking for solutions and more time working on other aspects of your business.
4. Site security.
Back in 2014, Google began to push website owners away from Hypertext Transfer Protocol (HTTP) and toward Hypertext Transfer Protocol Secure (HTTPS). Google upped its game in 2017. Beginning in October, specific pages on sites using HTTP rather than HTTPS would prompt pop-up warnings on Chrome. If that sounds like needless bullying, read on.
HTTPS is much more secure than HTTP. Websites using HTTPS encrypt all requests using Transport Layer Security (TLS), while websites using HTTP do not. When customers submit forms, add addresses during checkout, or use chat support, TLS scrambles the data they input, making man-in-the-middle attacks (MITM) much harder to execute.
Payment Card Industry Data Security Standard (PCI DSS) compliance is another essential site security feature. Sites that are PCI DSS compliant have to fulfill several security criteria, after which they’re permitted to partner with payment gateways, like Stripe, Authorize.net, Paypal, and Worldpay.
To recap, your ecommerce platform must:
- Support HTTPS.
- Be PCI DSS compliant.
- Combat spam with Google reCAPTCHA.
You want to grow your business, but will your ecommerce platform grow along with you? Your ecommerce platform has to be scalable, and it has to be able to handle the extra traffic as you build your customer base. You need a nimble backend to manage your burgeoning product database. You won’t have time for plugins that slow down your site, and neither will your customers.
Before you choose your ecommerce platform, consider what you want your company to look like in a year, two years, or five years. Maybe you’re the only person on staff at the moment — but 18 months down the line, you might hire an inventory manager and a marketing team. You need to be able to manage access and grant permissions quickly and easily.
At some stage, you might begin selling products internationally. If so, you may need to create additional regional sites or make sales in multiple currencies on your main site. When your mom-and-pop company morphs into an enterprise-level corporation and you set up a large-scale supply chain, you’ll need an ecommerce platform capable of integrating with each distributor’s application programming interface (API).
If you think big and plan for your ecommerce dreams in advance, they’re more likely to come true. Pick your ecommerce platform accordingly.
Features Needed For a Great Ecommerce User Experience
In ecommerce, user experience is everything. Visitors are a fickle bunch — they leave quickly if they don’t like what they see. In 2020, the average U.S. site had a conversion rate of only 2.63%. So if you’re based in America, less than 3% of the people who visit your site actually make a purchase: the rest bail out, often abandoning their shopping carts in the process.
Thankfully, there are ways to turn your conversion rate from mediocre to magnificent. You can begin by tapping into the following six platform features to optimize your site user experience.
1. Ecommerce analytics.
They say winners keep score, and in the ecommerce world, analytics tracking is the key to success. Most SaaS ecommerce platforms have built-in analytics, which you can use to peruse key performance indicators (KPIs) and other vital metrics. Consider tracking the following KPIs:
- Impressions — to make sure your SEO and marketing strategies are working.
- Click-through rate — to see if people find your ads intriguing.
- Subscription rate — to see if you need to add or remove pop-ups or modify your subscription process.
- Email open and click-through rates — to gauge whether your newsletters and offers are as compelling as you think they are.
- Unsubscribe rate — to see how many people find your emails annoying.
- Spam complaint rate — to see how many people find your emails really annoying.
2. Website personalization.
Everyone loves a personalized experience when it’s done right. In the brick-and-mortar world, this means knowing each of your customer’s names and preferences all by heart. In the ecommerce world, you can offer customers personalized experiences by tracking where they go, what they buy, and what they’re interested in via cookies, and then offering them more of the same. You’ll find this type of thing in action on big sites like Amazon — there’s no reason why you can’t do the same kind of thing.
3. Robust catalog.
Your product catalog has to be up to date, relevant to your sector, and easy to navigate. If you sell clothes, organize them by style and size, and create radio buttons for color, fit, and other essential factors. Look at the menu on Cutter & Buck’s site if you need inspiration — see how simple it is, and how efficiently well-planned mega menus connect visitors with products? You’ll also notice that Cutter & Buck doesn’t hide its sale section from visitors; those good folks know how to bag bargain hunters before they split. Very clever.
An additional word about navigation here. According to recent research, visitors bounce when they encounter poorly designed or complex site navigation; stick to predictable, simple menus and top-level pages, and you’ll see a better conversion rate.
4. Multiple payment gateways.
Not everyone has a credit card. In fact, a sizable portion of people depend on platforms like PayPal to complete transactions online. Ecommerce companies with multiple payment gateways have far higher conversion rates than those who rely on only one payment provider. When you expand internationally, check out local payment gateways to gain the trust of new site visitors.
5. Headless commerce.
Many people don’t understand what headless commerce is — possibly because it sounds both macabre and completely abstract. In a nutshell, headless commerce is your backend without the front-facing content delivery application (CDA). Remember CMS? This is the content management application (CMA) bit of the equation decoupled from the CDA.
You can use open-source software as a headless commerce solution and then add APIs to stream blog posts, product descriptions, product detail pages, and content to any type of device. Meanwhile, front-end developers use the same data to create a smart website.
If that sounds complicated, well, that’s because it is. Luckily, SaaS ecommerce platforms deal with RESTful APIs and other mind-bending acronymic stuff automatically. Consequently, their savvy customers get to create omnichannel consumer experiences without losing their heads — pardon the pun.
6. Flexible shipping solutions.
Thirty years ago, people ordered items from catalogs and waited four weeks for delivery. Times have changed. Today, nearly all companies battle with the ecommerce behemoth — yes, that’s Amazon again — when it comes to shipping. We can’t all shoot packages out of giant cannons or drop parachute-equipped parcels via drones (wait — can Amazon do that yet?), but we can stay competitive with a range of reliable shipping options.
Nearly all customers will wait two to three days for the products they really want. You’ll start to lose people if your shipping times extend to a week or more, though. Conversely, you’ll gain customers if you offer at least one overnight express shipping option. If you’re based in a major city and have access to a bicycle courier service, you might consider making use of that for same-day delivery to local destinations.
The Top 15 Best Ecommerce Platforms
Right — we’ve gone over nearly every aspect of what a great ecommerce platform looks like. Now let’s examine some real-world examples to see what they have to offer. Hopefully, by the end of this section, you’ll have made a shortlist of your favorites. Here goes:
BigCommerce is one of the most flexible and reliable SaaS platforms out there. It’s the number one choice for all types of ecommerce businesses — from small startups to large corporations.
- Flexible APIs — BigCommerce easily integrates with third-party programs, including smartphone apps and vendor software.
- Headless capabilities — You can go headless if you already have a CMS for your frontend and let BigCommerce power the backend.
- Several pricing plans — Businesses can choose from several different plans, all of which are loaded with features, including SEO and URL control across the board.
BigCommerce does have somewhat of a learning curve because it’s so customizable, but the platform has a robust set of tutorials and a good tech support team to help companies get set up. Considering what you get, BigCommerce is also surprisingly affordable.
Originally released in 2008, Magento (now Magento 1) is an open-source PHP-based ecommerce software. Companies with existing web design and development teams create self-hosted ecommerce sites with the program. In 2015, Magento 2 (also known as Magento Commerce) was released; Magento 2 is a cloud-based platform-as-a-service ecommerce solution. Nowadays, Magento 1 and Magento 2 exist simultaneously.
Businesses with large IT departments use Magento because it gives them total control over their websites. Companies who choose Magento do have to deploy patches and perform updates manually, though.
One of the well-known names in ecommerce, Shopify is a well funded public SaaS provider. Website setup on Shopify is simple, making it a solid choice for startups and small companies with moderate product catalogs. Enterprise companies go with Shopify Plus, which delivers more, but also comes with a heftier monthly subscription fee.
Unfortunately, Shopify URLs aren’t fully customizable, which is a drawback for companies who want real control over SEO. Shopify also has a restricted API call structure, making it less ideal for businesses with extensive supplier networks and omnichannel needs. Finally, clients are penalized with additional transaction fees for not using Shopify Payments.
Small startups and bloggers who want to expand into ecommerce use WooCommerce to add shopping cart functionality and brand content to their WordPress sites. As a plugin, WooCommerce is relatively simple to use — particularly for individuals who are familiar with WordPress. For the same reason, it also tends to slow down in response to more extensive product catalogs. Medium-sized and enterprise-level companies usually choose faster open-source or SaaS platforms over WooCommerce.
Once a favorite of entrepreneurs and small businesses, Volusion now caters mainly to hobbyists. For a while, its founders tried to break into the enterprise market with a platform called Mozu, but it didn’t gain traction; eventually, Mozu became part of Kibo Commerce. Businesses who choose Volusion pay extra each time they experience traffic spikes or increase the number of products in their catalogs, making the platform an unreliable choice for those with limited budgets.
6. Salesforce Commerce Cloud.
Formerly known as Demandware, Salesforce Commerce Cloud is a cloud-based open SaaS platform, like BigCommerce and Shopify. Popular with fashion retailers, it offers AI, marketing, merchandising, and customer service features. Salesforce Commerce Cloud is a solid platform, but it costs a tremendous amount to use, and once sites are set up, companies need developers on staff to keep them going.
Founded in 1997, 3dcart has been around for almost as long as modern ecommerce. Less flashy than Salesforce Commerce Cloud, this SaaS option has maintained a following for years — and it carries a formidable rack of built-in tools. Multilingual support and advanced shipping solutions come standard, which is useful for smaller retailers who want to sell their wares overseas.
Built for omnichannel commerce, Kibo is an advanced ecommerce player — but only on paper. It has a robust menu, offering its customers personalization strategies, order management options, and mobile point-of-commerce (mPOC) solutions. It acquired Volusion’s custom-built Mozu platform back in 2016; since then, Kibo has mainly catered to the enterprise CMS market.
Popular with vendors in non-English-speaking countries, PrestaShop is an open-source platform available in 60 different languages. It operates on a freemium model, where the base level of service is free, but companies pay for things like PrestaShop AddOns, including store themes and custom modules. From 2015 to 2017, PrestaShop offered a self-hosted version of its software called PrestaShop Cloud.
Created as an answer for creatives looking to expand into ecommerce, Squarespace is a cloud-based SaaS platform with a lightweight shopping cart. Primarily the domain of artisans and innovators, Squarespace is modern, elegant, and easy to use. Limited discounting, shipping, and payment gateway options make SquareSpace a better choice for startups than larger companies.
11. Big Cartel.
Ironically, Big Cartel is best for small businesses that don’t need complicated platforms. Musicians, boutiques, designers, and craftspeople with limited catalogs choose Big Cartel because of its simple learning curve and quick website setup. Vendors can connect third-party applications, like MailChimp, ShipStation, and Printful, and they can access the SaaS platform with a traditional browser or via a smartphone app. Although it’s easy to use, Big Cartel doesn’t have an extensive number of features, making it less suitable for big companies.
People without coding experience enjoy using Wix because of its drag-and-drop creative interface. Sites go up very quickly, and Wix’s pricing structure makes it an attractive choice for small businesses on a budget. Suitable for both beginners and experts, Wix is a fun way to start an online venture.
Designed to make store setup easy for small businesses, Ecwid is an ecommerce widget that works with existing websites. Companies can bolt Ecwid onto Facebook or Instagram pages, or they can use the module with WordPress. Single-product companies can use Ecwid for free; businesses with more than 10 products in their catalogs have to pay subscription fees. While convenient, Ecwid is not a solution for large-scale ecommerce.
As a headless commerce solution, Episerver is a good option for omnichannel ecommerce. With a focus on personalization, this platform provides its subscribers with a range of clever digital marketing and content management solutions. Popular with mid-market and enterprise-level companies, Episerver complements the company’s other products, which include Episerver Campaign and Episerver Finds. On the flip side, Episerver’s integrated search engine is somewhat limited, and custom development can be challenging.
On the face of it, Opencart is hard to beat: it’s open source, it’s free, and updates and downloads cost nothing. Merchants can set up multiple stores, sell their wares all over the world, and add an unlimited number of products to their catalogs. Reports and metrics are easy to find, and people can use Opencart’s dedicated community forum to find answers to tech questions. Opencart drawbacks include plugins that don’t always work, a slow checkout, and limited scalability.
“If you really look closely, most overnight successes took a long time.” – Steve Jobs
Moving from brick-and-mortar into ecommerce doesn’t have to be daunting or confusing. Instead, it can be an exciting journey into the digital world. With a powerful ecommerce platform behind you and a good understanding of things like SEO, omnichannel, call softwares, and shipping, you can turn your business into a true online success.