E-commerce software: key resource for online success

E-commerce software: key resource for online success

In addition to unique selling propositions in assortment and fulfilment as well as the brand, the e-commerce software is decisive for e-commerce success. This article presents the essential components of e-commerce software and discusses requirements.

What is e-commerce software

The term e-commerce software is used here to refer to a number of software solutions that help to carry out operational or administrative processes in a more or less integrated manner. In electronic commerce in particular, it is not just the individual system that is important, but rather the interaction of the individual, specialized components. From an operational perspective, software is about supporting or executing the value chain through production, service and communication. In e-commerce, the value-added stages are

  • Purchasing,
  • warehousing,
  • online marketing,
  • sales,
  • fulfilment,
  • shipping,
  • customer service and
  • returns management.

These tasks can be significantly simplified by IT systems.

E-commerce software – the components

The order or hierarchy of the individual systems depends on the focus of the business model. For a pure player in e-commerce, the focus is clearly on the online store system. If you compare e-commerce software with a planetary system, the store system is the central star that supplies the overall system with energy. But of course, depending on the business model, an alternative system component can also be central.

The store system

The store system organizes the central success factor in online retailing – conversion. Customers are offered a web frontend where they can not only view the products but also purchase them via a shopping cart and checkout process. While the web frontend acts as a bracket, the backend is the summary of all administrative components. At the center of the store system is the product database, a solution for the shopping cart and for the checkout including payment options. In addition to the product database, the order and customer databases are central assets that the e-commerce company manages in the backend of the online store. In addition, shipping options and a variety of interfaces to the other components of the e-commerce software are integrated. The content management system, which combines administrative, product or company-related content, is also controlled via the backend of the store system. Individual support functions such as a shop-internal search engine or a recommendation engine for cross-selling and upselling are also part of the store system.

So the main elements of the store system are:

  • Frontend
  • Product pages
  • Category pages, which summarize products
  • Home page of the store
  • Shopping cart page
  • Checkout with its highly interactive individual pages
  • Thank-you page as the last page of the checkout process
  • Administrative pages such as imprint, data protection, general terms and conditions and cancellation policy
  • Store internal search
  • Backend
  • Order database
  • Product database
  • Customer database
  • Shipping solution management
  • Payment
  • Content management system
  • Vouchers
  • Recommendation Engine etc.

The complexity of the software solution for the online store is determined by the number of items and the orders that depend on them. While small and medium-sized stores use standard solutions available on the market, large, market-leading solutions usually have their own programmed frameworks and applications.

Merchandise Management

In addition to the online store, merchandise management – or more precisely: the inventory management system – is a central component of the e-commerce software and system landscape. The task of merchandise management is to support the procurement, storage and provision of products offered in the online store. The enterprise resource planning system is used to manage suppliers, inventories and logistics. The extent to which other functions are performed depends on the division of labor within the e-commerce system landscape.

Interfaces to marketplaces

In e-commerce competition, it is essential that a supplier not only offers goods in its own online store. Rather, wherever the target group segments can be reached, the store or provider brand should also be present. This leads to the typical situation where online retailers are also present on third-party platforms and marketplaces such as

  • Amazon Marktetplace
  • ebay
  • Rakuten
  • Allyouneed
  • Yatego etc.

are represented. In this cooperation, the e-commerce company usually pays a basic fee and a commission to the marketplace when an item is sold. In order to be able to operate “branches” on external marketplaces efficiently, it is necessary to integrate the marketplaces with the help of interfaces (Application Programming Interface). The multitude of possible combinations between online store, merchandise management and marketplaces makes interface management a complex and challenging task. In particular, changes to one of the subsystems can require complex programming.

Shipping module or interface

While the transfer to the external marketplaces is mainly about data, it is the task of the shipping interface to ensure the transfer of finished packages to the shipping service provider (carrier). The shipping interface organizes a two-way exchange of data: the carrier is sent the package data and a shipping item is created in this way. The carrier sends data back to the online store, which is needed to create the shipping label and to track the shipment. If several carriers are used – as is usual with large online stores – several shipping modules must also be integrated. However, large companies can also use standardized interfaces that allow multiple carriers to be used.

Payment interface

Before sending a parcel, you should make sure that the customers will pay for the goods. Since payment in the online store is at least as complex as the data transfer to the shipping department, separate interfaces are also used for payment. Due to the diversity of payment solutions such as Paypal, credit card, direct debit, purchase on account or instant transfer, a number of individual solutions are conceivable for payment. However, payment service providers that offer a wide range of payment methods with one interface have become established. These service providers are also more likely to be able to comply with regulatory requirements, such as data protection.

The process of payment is similar to the transfer of parcel data to the shipping service provider. After the customer has selected a payment method, the transaction data is transferred to the payment service provider. The latter organizes the payment on the appropriate platform, which returns the information on the success of the payment to the store. The transaction can then be completed and the package shipped.

Interface to accounting or ERP

It is not far from the payment to the accounting system. This must post outgoing or customer invoices for all transactions. The interface to the accounting system enables the transfer of address, order, article, tax and payment data to the individual transaction. If the accounting system is integrated into an ERP system, an interface between the ERP system and the online store is required. Alternatively, there are ERP systems that have integrated online store and merchandise management.

Customer Relationship Management (CRM)

In a market situation where long-term customer relationships are essential for profitability in e-commerce, effective CRM is essential. This involves adding transaction data to other customer data, provided customers have given their consent for the data to be used. The simplest form of CRM is the customer database in the online shop system. When customers register a customer account and place an order as part of the registration process, data on individual transactions is recorded. This data can also be used to determine the central control parameter of customer lifetime value.

Product Information Management (PIM)

Comprehensive and high-quality product information is a key success factor in e-commerce software. This is created and administered within the framework of the PIM. Especially when product information is needed for many platforms, a PIM that is smoothly integrated into the e-commerce system landscape is a central asset of the online store.

Content Management System (CMS)

In addition to data on individual products, all professionally operated online stores offer a wealth of other information, including not only text but also photos and video material. This data is created, managed and, above all, optimized within the framework of a CMS.

Online marketing

In online marketing, store pages are addressed as landing pages to motivate users to visit specific pages. However, marketing measures in the store such as banners, coupons or discounts must also be administered. In smaller online stores these functions are integrated in the store system, in larger stores there may well be independent modules for online marketing.

Analytics and Business Intelligence (BI)

A key advantage of e-commerce is the ability to immediately and continuously measure the success and failure of operational measures. This task is performed by analytics tools. The preparation and presentation of the results of the analyses is carried out in business intelligence solutions, which provide holistic and always up-to-date reports, dashboards or even interactive maps. The connection of the online store with an analytics solution is essentially done via tracking codes, which can be used to measure the call-up of individual pages by the analytics tool. An interface between the analytics tool and the BI tool then provides up-to-date data for managing the store, but also for making strategic decisions.

Text and graphics: Dominik Große Holtforth

 

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