Why reducing the total cost of ownership is an e-commerce game-changer

More than ever, e-commerce businesses operating today face a predicament. On the one hand, they need to invest in their platforms so as to maintain their competitive edge – after all, the e-commerce market in Europe is growing at over 9 per cent each year, and new players are regularly displacing old ones. But on the other hand, the global economy is in a volatile period, and they need to spend cautiously to safely weather the storms.

 

Finding a way to reduce spend on assets and operations is therefore vital. But e-commerce businesses can only do this successfully if they know where the biggest outlays are – not just on things such as upgrades and acquisitions, but also, for instance, the amount of time employees spend on operations.

 

Calculating – and cutting – costs

 

In other words, the most effective way for companies to make the adjustments needed to stay competitive in turbulent times is to know what their total cost of ownership (TCO) is.

 

Yet TCO is complicated. A company’s spend on, for instance, upgrades can be balanced by the incremental growth generated by its tech, making the maths difficult to do.

 

Similarly complicated is understanding the full range of cost points: implementation, training, compliance and more – the list goes on. A detailed picture can only come with a detailed analysis of TCO.

 

But what can be narrowed down quickly is the set of revenue-boosting features that all e-commerce platforms need to prioritise.

 

Five golden features

 

Arguably the most important is software as a service, or SaaS. If a software provider can take care of issues such as maintenance, bug fixes and security patches then a significant outgoing is reduced – and this includes the time employees spend fixing errors.

 

Successful platforms can’t afford to spend time and money on handling every element of the tech stack, though. Be sure to choose a solution tailored to your specific requirements, or one which is at least flexible enough to adapt to your current and future needs. It will depend on your roadmap, but a solution that enables users to scale and update their tech stacks over time will likely be necessary.

 

There’s also composability. As companies evolve, they need to upgrade and add best-in-feature tools – and unlike monolithic e-commerce platforms that don’t enable change, a “composable” architecture facilitates their constant evolution and dynamism.

 

Customer expectations have changed greatly as e-commerce has grown, and a key demand nowadays is choice: choice over the channels they use to start and finish purchases, the ways they pay, whether they pick up goods in store or at home, and so on. Technologies and features that can support and ease omnichannel commerce are essential. Omnichannel shopping is here to stay, which means technologies and features that genuinely support and promote it are essential to retailers serious about reaping its benefits.

 

Product listing and merchandising are also key. E-commerce tools that automate the process of launching and updating products online and creating marketing material allow employees to focus their energies elsewhere.

 

Finally, a payment system that is suitable for each market, both in terms of rates for each type of payment and its functionality, will save customers time, and – particularly if they keep a close eye on the fees attached to different payment providers – money. Both factors help drive loyalty.

 

Driving sales, boosting competitiveness

 

Focusing on ways to make these most cost-effective is a surefire way to reduce TCO – and BigCommerce has enabled e-commerce businesses across Europe to drive sales growth and competitiveness by lowering the TCO of their tech stack.

 

“Growth in retail and digital retail has slowed dramatically post-pandemic, and when growth is harder to come by every decision on investment gets scrutinised and must deliver value,” says Mark Adams, GM and SVP EMEA at BigCommerce. “This is why TCO matters so much right now.

 

“There are other factors: technology disruption leads to greater efficiency and should lead to lower cost-to-operate and relatively lower cost-to-scale. Speed to market is also critical, since the faster you deliver ROI, the quicker you can benefit from deploying a new, more efficient, more customer value driven solution.”

 

The cost savings and sales growth offered by the platform means it pays for itself in just eight months, and delivers an ROI over three years of 211 per cent.

 

As one study by the advisory firm Forrester found, the savings and growth are driven by a faster time to market, with one client reporting that it was able to do its product listing in half the time it previously could.

 

All of this results in enhanced competitiveness – indeed, Forrester found that following BigCommerce implementation, businesses could see an incremental profit gain of $6.5 million over three years.

 

The advantages are also borne out by direct feedback from BigCommerce clients. “Opting for a SaaS model with BigCommerce has allowed us to move the budget from column A into column B,” explains Ashley Hubbard, Ecommerce Manager at shoemakers Grenson Shoes. “What used to be spent on patches, technical fixes, hosting SSL renewals, PCI compliance, all of that sort of stuff, has now been freed up as budget to go straight into advertising or marketing and growth.

 

“That’s been a really nice change. We’re not having to look backwards at mandatory maintenance work – we’re purely working on growth and growing the business now.”

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For more information, visit bigcommerce.co.uk