In 2023, global retail digital commerce sales reached an estimated $5.8 trillion. By 2027, that figure is projected to grow to $8 trillion.[1] With such a large increase on the horizon, enabling and maintaining digital commerce sites to address specific, relevant markets is still a worthy investment.
But how do you decide whether to move to a new technology, add new sites on new technology, or invest in what you already own? Getting an expert opinion and validating transition costs can help you build a business case that is strategically aligned with your company’s mission and that takes your portfolio of project initiatives into consideration.
Assessing Your Organization’s Needs
To better understand available technologies, prioritize investments, justify selections, and develop tactical transformation plans, consider making a careful assessment of your organization’s needs. This assessment—conducted with a partner or by parties inside your organization—should focus on the following:
- Commerce Site Re-platform – Evaluate business and technology needs to plan a roadmap for transitioning to a new commerce platform, including a review of existing systems, business and technology objectives, data migration requirements, DevOps requirements, business user retraining, testing process, etc.
Hosting and platform costs have changed substantially with the availability of cloud computing and SaaS commerce offerings. - Commerce Architecture Roadmap– Given the current state of your commerce ecosystem, review options for moving to the cloud and/or consolidating and upgrading systems to achieve a more efficient and reliable architecture—and typically cost savings.
- B2B/B2C Commerce Opportunities – If your company plans to add a new channel to serve either B2B or B2C customers, assess what capabilities should be enabled to support this new market. Outline the effort required to develop a commerce site focused on this new target audience. The revenue generated by capturing a new addressable market can provide substantial return on investment.
- Online Commerce Readiness– Outline what it will take to start an online business, including a review of existing systems, identification of gaps, approximate implementation timeline and cost, required business processes, required facilities and staff, and technology recommendations
. As more B2C and B2B shoppers buy online than ever before, having an online commerce presence is critical to winning and retaining customers. DTC models also allow businesses to capture sales directly and build a loyal audience. - Marketplace Features and Integration– Companies are expanding their site offerings by including products and services from third-party sellers. Define the types of marketplace or dropship features that could be implemented and determine whether needs can be met best with a COTS or custom solution. Then define the marketplace integration and enablement project.
Expanding the products and services offered through your site can increase traffic and sales and lead to more recurring revenue. - Commerce Implementation Remediation– Consider remediating problematic commerce implementations you have in place today. Assess your current implementation, outline existing issues, and identify prioritized changes to improve application performance and functionality
. Addressing this technical debt reduces costs for manual intervention, defect analysis, and customer support.
Justifying Commerce Investments
Although building new commerce sites or re-platforming technologies can be large, costly projects, these investments can pay off in big ways. While incremental improvements are also important, too often, companies focus IT efforts on efficiency gains instead of on boosting revenue and increasing market share. Bold steps can help your company stay ahead of the competition and open important new sales channels. Keep the following considerations in mind as you build your business case:
- Define business needs – Large commerce projects typically solve existing business and IT issues but should also be seen as investments that can scale around your future goals. Limitations of existing technology solutions often pose significant barriers and maintenance costs as companies try to do more. Identify the needs your business must address online over the next 5-10 years.
- Consider components – A full re-platform may not be necessary. Focusing on specific components, such as content management, search, or building a headless front-end, may provide quick hits that improve operations and customer experience without changing everything at once. A gradual transition to new technology also reduces program risk.
- Demonstrate a business-aligned strategy – Illustrate how a commerce project supports business objectives and provide forecast metrics to show the impact of investment.
- Outline the current cost model and potential savings – License fees, hosting costs, and development costs are obvious numbers to collect, but the total cost model is likely much more complex:
- What are the opportunity costs? The limitations of an existing platform may pose a high cost to make simple changes that are enabled more easily by new technologies.
- What work can be shifted from developers to business owners? If developers need to be involved to update site content, product descriptions, pricing, promotions, or search rules, newer solutions may save significant development time and cost and enable business owners to make changes more rapidly. This time can be repurposed to build new features that add value or address prioritized technical debt.
- What key roadmap enhancements are you planning? These capabilities may be available out of the box from a new platform versus developing customizations that require development and maintenance.
- What are sources of potential savings and efficiency gains? Newer platforms enable changes to be implemented more quickly. A modern commerce architecture provides a more flexible and agile integration framework, which reduces the time to integrate systems. Likewise, self-service capabilities reduce the workload on internal resources, especially in the context of B2B commerce.
- Identify revenue enhancement opportunities – Top-line and bottom-line growth can come from operational improvements, improved customer experience, and new revenue streams, among other expected improvements. Up-sell and cross-sell capabilities, better pricing strategies, a seamless shopping experience across all channels, and the ability to reach long-tail customers are areas where you may find incremental revenue opportunities.
- Gather KPIs and baseline data – Collect metrics that show your current state and how you forecast they will change following the investment. Compare actual results to the baseline data following your implementation.
DMI’s Commerce Expertise
DMI’s Digital Commerce practice includes industry veterans who have consulted with numerous clients as they make decisions about how to advance their business missions and add value. With over 25 years of exposure to the commerce domain and more implementations than we can count, our team has found solutions to complex problems and helped many clients improve the success of their online channels.
Connect with our team to discuss the unique business challenges you are facing and to begin outlining a roadmap for making a wise investment in commerce technology.
