The pros and cons of working with third-party tech providers

31st May 2017 @ 08:15 | Aurora Commerce

Ecommerce has come a long way since its emergence in the mid-90s, and the relationship between retailers and the platforms through which they trade has gone through various iterations.

In the early days, most retailers developed their own in-house solutions. While this approach seemed to work for a time, offering control and transparency, it soon became clear that it was costly and inflexible. It took large teams to manage these operations, and ROI was rarely achieved.

Equally, such platforms proved slow to adapt to changing customer behaviour and hardware developments, and demanded ongoing investment and effort – distracting retailers’ attentions from their core business.

The third-party migration

Unless their demands were particularly specific, most ecommerce retailers have migrated to third-party platforms over the last 10-15 years. This has allowed them to renew their focus on the customer, leaving the technology to the experts.

It’s difficult to argue with the quality of product offered by specialist providers; they are able to deliver well-defined, single-purpose solutions that are often best-in-class products.

However, as customer demand has grown, so too has the number of third-party solutions, and these have generally been bolted on to systems as and when the need has arisen. From merchandising to payments, today’s typical ecommerce platform is probably supplemented by around 20-30 standalone solutions.

For example, numerous ad hoc marketing solutions have recently emerged which deal with specific parts of the customer journey – from managed email campaigns to Facebook advertising applications. These tools tend to occupy their own silo within the wider ecommerce platform, along with the data sets associated with them.

The cost of ongoing augmentation

As well as creating dependency on an increasing number of third-party providers, this ongoing process of integration has a functional cost.

Today’s online consumer demands a fast, responsive experience, and expects a website to perform as well as the best in its class. But, rather than improving their experience, third-party bolt-ons can hinder this performance.

As well as frustrating shoppers, performance problems mean lost conversions for retailers. For example, according to Amazon, for every second of delay in page load speed, conversion rates drop by 7%.

However, some retailers are plugging in extra functionality without assessing its impact. It may initially appear cheaper to add functionality to a legacy system, but the long-term costs of inflexibility and complexity soon add up.

Surely, therefore, it makes more sense to employ technology that enhances performance without impacting efficiency?

The holistic third-party solution

To innovate effectively around online shopper expectations, many retailers are turning to third-party providers who can offer a more comprehensive platform, incorporating critical functions such as merchandising and warehouse management systems (WMS).

Such cloud-based platforms are scalable and flexible, and can integrate new functions as they emerge. Communications between departments and operational functions are streamlined, enhancing the ability to respond to demand in real-time. And rather than being disparate and cumbersome, they provide a single view of a retailer’s activities, and compound any benefits that emerge.

The Aurora Commerce platform, for example, proves that specialism and performance can co-exist. Flexible enough to meet a range of retail requirements, with scope to scale for those taking a long-term view, Aurora Commerce is a robust and powerful third-party solution to the challenges facing modern ecommerce retailers. Perhaps the time is nigh for the next migration?

Learn how Aurora Commerce can deliver the functionality and performance you need by downloading our quick guide to peak ecommerce performance, or by visiting our features page to see how we can enhance your capabilities.

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