June 1st, 2016

What Is the Cost of Launching a mCommerce Service?

Planning on selling products and services online? With more than 50% of web traffic now coming from mobile devices, this means launching a mobile first commerce service if you want to succeed. eCommerce in general has be‎en in the cloud for a long time now with Shopify, WooCommerce and Jimdo as some of the leading providers. This means that the starting cost for an advanced commerce site is almost nothing. And all of the platforms are now mobile optimized for a mobile-first approach.

For big commerce sites it’s been a different world. Marks & Spencer spent $150M on their two-year project (which to be fair, included a lot of back-end work as they moved off Amazon). However, typically the planning, UX, setup, integration, development and quality assurance based on platforms such as Oracle Commerce and SAP Hybris has ranged from $2m to $10m.

Recently this has started changing with new cloud-based solutions such as CommerceTools and Demandware that give speed and low costs to get started, combined with full flexibility and customization to integrate existing systems and differentiate the user experience. The cost for these could be as little as $50-100K by using a standard template and basic integration or $1-2M with full customization and integration.

More specifically on mCommerce, there are also multiple alternatives to provide great customer experience:

  1. Using the default templates of one of the cloud platforms such as Shopify or WooCommerce; requires minimum work and is included as part of the price of these platforms.
  2. Using a mobile-specialized platform like Poq or Mobify to create a good user experience‎; usually an annual license starting at $50K per year.
  3. Creating a custom user interface for mobile devices based on adaptive/user experience design or app development; anywhere from $50k to $1M depending on your ambitions.

Generally, online retailers upgrade platforms every 5-7 years due to the complexity and cost, but it might be worth re-evaluating this thanks to the latest shift to the cloud and micro services that vastly reduce cost and improve user experience. Many upgrades have a return of investment in as little as three to six months. The reason is simply that the revenue contribution, cost savings and productivity increases are huge.

These insights and more come from our contribution to a recent report on this topic by ClickZ. To learn more, read DNA of a Great M-Commerce Site Part 1: Planning or contact us.

Magnus Jern, President DMI International

Tags: mcommerce retail

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