Clicks are overtaking bricks as the e-commerce sector is seeing major leaps in growth year-over-year. In 2020, over 2 billion people
will shop online and generate over $4.13 trillion in sales revenue for retailers worldwide. And with the COVID-19 outbreak, these figures will even grow. Are you ready to join the cohort on online retailers?
In this post, we’ll show you how to choose the best e-commerce platform for your needs by benchmarking the three most popular options – open sources e-commerce platforms vs. SaaS vs. PaaS vs. e-commerce solutions and full custom e-commerce builds. Let’s dig in!
Open-Sources vs SaaS E-commerce Platforms Comparison Table
Full ownership. Your e-commerce business will be bound by few technical/product constraints. However, full ownership also means that you are responsible for developing, designing, and later maintaining your e-commerce solutions, sitting atop the open-source platform.
A separate tech team will be required to support and maintain the day-to-day side of your operations.
Shared ownership. SaaS e-commerce platforms provide you with all the basic tools to launch a web store – hosting, design templates, integrated checkout andpayment gateways, CMS/CRM systems, etc. Most of them arelow to no-code, meaning that you don’t need an IT team to set up a store.
The provider takes care of infrastructure optimization and your service fee also covers different levels of support from their end.
Virtually unlimited. Most open source e-commerce platforms have few constraints in terms of UX/UI design and user-flows. You can code a fully custom check-out experience or add a customERP moduleto support your operations. Same goes foradvanced real-time customer analytics solutions or ML-powered recommendation engines.
Constrained. Even the best e-commerce platforms in this category offer limited customization options beyond the store design. You do not have direct access to the platform’s source code. Thus, you cannot implement fully out-of-the-box changes such as custom navigation or on-site search experience.
High. You can select between pre-made open-source extensions/integrations and custom ones, created through external APIs.
Bounded. While SaaS-based e-commerce platforms do offer an array of plugins, extensions, and integrations with the most popular business services via branded marketplaces, in most cases, you cannot develop any custom integrations.
Customer Data Collection & Ownership
Complete. Collect, store and operationalize an endless volume of transactional and on-site customer data. For instance, you can deployadvanced big data analytics solutionsto predict product demand, suggest personalized cross-sells/up-sells, customize discounts and mine other insights to improve your store’s conversions and profitability.
Note: you will also be responsible for informing the customers about your data collection processes and securely storing sensitive data in your systems (in line with the local industry regulations).
Partial. Most solutions come with pre-furnished customer, sales, marketing, and financial analytics suits. Integrations are possible with more advanced tools. But again, these are limited. Plus, the majority of customer data resides in the company’s servers. Thus, deploying any advanced analytics solutions can be problematic since you won’t have access to complete records.
Not included. You are responsible for finding the optimal hosting provider, developing a supporting infrastructure and performing housekeeping tasks to maintain high service levels. Most likely, you’ll need a separate tech support team to handle monitoring, storage and cloud resources, cost-optimization, etc.
Check our previous post for a quick comparison between AWS, Azure and Google Cloud as cloud hosting providers.
Includedin your monthly bill. Typically, you get charged a different rate depending on your monthly visitors’ count, and number of listed products or sales.
Such e-commerce platforms also take care of ensuring stable website performance, high page loading time and low speed. However, since you’ll be sharing space with a bunch of other stores, issues may arise whenever you are experiencing a major traffic spike.
Case in point: Shopify could not sustain a major load during a recent, viral, product launch orchestrated by Jeffree Star Cosmetics, resulting in poor customer experience.
Your Responsibility. As mentioned above, you will be fully responsible for ensuring stable performance of your online storefront and performing updates/upgrades.
Shared Responsibility. The SaaS company releases regular patches and updates to the platform. However, it’s your responsibility to install them and make other necessary adjustments to your store as per their recommendations.
Also Your Responsibility. You will need to conduct comprehensive audits to ensure that all ends are protected.
Fully Managed. SaaS providers assume all the responsibility for cybersecurity and PCI compliance.
Payments Costs and Experience
Owned. All of the best open-source e-commerce platforms let you select among several premade payment integrations and add new payment gateways. This lets you offer a variety of local payment options to your customers and avoid costly lock-ins with a single provider.
Plus, you can customize the payment experience to optimize conversions and support innovative payment solutions such as pay-later services/instant financing (e.g., Klarna), support mobile wallet payments (Apple Pay, Google Pay, WeChat Pay/AliPay) or payments in cryptocurrency.
Pre-made. A SaaS provider will let you choose among several payment integrations and will charge a fixed fee per each transaction. In most cases, you won’t be able to negotiate a high payment volume discount directly with the payment services provider.
Also, you will have to settle for the payment flow and checkout experience designed by the SaaS provider since customizations are rarely possible.
Moderate. To get your store up off the ground, you’ll need to invest in e-commerce development services as open-source platforms require a lot of upfront design and development work. Every custom feature and integration will require more development time.
A reasonable launch period for a small e-store is between 4-8 weeks.
Fast. SaaS e-commerce platforms for small businesses let you set up a simple shop in a day or two. You can use pre-made templates and UI elements to drag & drop the key store pages, integrate payments in a few clicks and use different extensions and plugins to add extra features.
A reasonable launch period for a small e-store is between 1-5 days.
The Third Option – PaaS E-commerce Solution
PaaS solutions combine the better of the two worlds – a great degree of flexibility, customization and integration opportunities paired with stable, managed hosting and infrastructure.
Similar to open-source platforms, they allow you to retain more control over your website front-end and back-end. Unlike open-source, where you are starting from ground zero, PaaS platforms include an array of handy e-commerce features (much like SaaS), and let you build custom integrations as well, for instance, with an ERP or CRM system of your choice. The provider also takes care of your platform’s security and infrastructure performance.
Overall, PaaS e-commerce is an excellent choice for enterprises that prefer to focus on platform development and business growth, rather than infrastructure maintenance.
The Best E-Commerce Platforms in Each Category
Some of the best open-source enterprise e-commerce platforms are:
The best in class PaaS e-commerce platforms are as follows:
The popular SaaS e-commerce platforms include:
Another Route – Custom E-Commerce Solutions Development
Open-source e-commerce platforms offer a significant level of flexibility and often include a vast array of pre-built features you can expand on and customize. However, just like with SaaS, larger e-tailers may hit a ceiling. As Philipp Erler, senior vice president of Zalando Technology pointed out:
The problem with open source technologies is that they are built to fulfill many needs from a broad range of users while Zalando could only use a small part of the functionalities for its purposes. At the same time, especially in times of rapid growth and high innovative power, requested features in open source solutions are either missing or they could only be added with great effort.
That’s why the European e-commerce giant decided to build a custom e-commerce platform early in their journey.
Is this the route you should choose as well? Let’s take a look at the main pros and cons.
Advantages of Custom E-Commerce Platform Development
- Higher scalability without any imposed technical constraints.
- Fully custom platform features and operation flows to match your customer experience.
- Higher level of control over platform features, functionality, integrations and overall product development.
- Lack of vendor lock-in and reduced operational risks that accompany that.
Disadvantages of Custom E-Commerce Platform Development
- Longer time-to-market for a new solution and higher upfront investment.
- Higher chances of failure if the project lacks a strong product vision, high stakeholder engagement and a large list of requirements.
- Finding the right e-commerce development solutions provider can prove to be challenging without a solid vendor selection process.
- In addition, the lack of internal IT resources to oversee and support external development can jeopardize the project’s success.
Your decision on how to choose an e-commerce platform should be driven by your current needs and future vector of product development.
SaaS e-commerce apps are a great launchpad for e-commerce pilots and omnichannel commerce projects. However, they are proving to pose certain challenges when it comes to scaling and customization.
Open-source e-commerce platforms are a solid choice for mid-market and enterprise clients, who want to exercise more control over their store features and on-site experience. Such solutions offer a fine mix of flexibility, pre-made functionality and overall scope of possible integrations.
A PaaS platform is a middle-ground solution that can provide a good balance of TCO and ROI. As an Optimizely partner, we’d recommend this option to enterprises aiming at speed and agility that does not come at the expense of bounded functionality and customizations.
Fully custom e-commerce solutions are the optimal route for enterprises whose aim is to make online sales their primary sales channel and provide a superior shopping experience to their customers.
Infopulse team provides e-commerce platform selection and re-platforming consultancy services and would be delighted to further advise your company on the right solution. Contact us to learn more!