What are the biggest problems that ecommerce businesses face in 2021? Fluctuating demand, unpredictable situation on the market, need for scaling up and down, performance issues to name just a few. These companies also need to optimize their spending and gain better insights into their operations. One of the ways to solve these problems is cloud adoption. In this article, we walk you through:
- Brief market overview;
- Benefits of cloud in ecommerce;
- Main types of cloud-based ecommerce solutions;
- Five primary steps of cloud transformation;
- Development boost that cloud provides for other technologies.
The ecommerce market surged almost 34% in 2020 due to the pandemic . However, ecommerce sales are expected to grow by 14% this year. With an overall $4.2T in 2020 and a predicted $4.98T in 2021, the total retail ecommerce sales are expected to reach a record $5.86T in 2022.
The largest ecommerce markets in the world are China, the US, and Japan. In Europe, the top three countries by the volume of ecommerce sales are the UK, Germany, and France.
Moreover, 47% of retail executives believe that the global pandemic accelerated the cloud adoption process in their companies . Forrester experts believe that the cloud will power the overall recovery of both ecommerce and retail industries.
Why is cloud a great fit for ecommerce?
While cloud itself is not a new thing, some companies are still hesitant about cloud or degree of its integration into the company's processes. So, here are the top five benefits of ecommerce cloud services.
- Scalability. Cloud computing caters to the dynamic needs of ecommerce. It allows companies to scale up and down based on traffic, business challenges, or seasonal changes. Moreover it helps to balance the workloads and counter the fluctuating demand.
- Stability. Another top advantage of the cloud is reliability of its performance. You have stable and predictable performance in times of huge traffic spikes (like Black Friday sales) or promotional campaigns.
- Security. Various vendors can have different offerings, but overall the cloud can provide PCI-DSS certified hosting, which is extremely important in GDPR compliance. Additionally, cloud offers advanced security measures to protect your website from DDoS attacks or other threats.
- Speed. We all know that clients love fast websites. 79% of shoppers dissatisfied with website performance are less likely to buy from the same site again. Migration to the cloud allows you to improve your e-commerce site performance and page speed.
- Savings. If planned and executed correctly, adoption of cloud can significantly lower costs compared to traditional hosting, as you pay for what you use. And in most cases, these expenses are operational, not capital.
Despite having numerous benefits, cloud transformation may be a tricky process. It is essential to have in-depth visibility into cloud use across the organization and provide ongoing oversight. Only then would you be able to manage costs and achieve the full potential. However, beware of adopting cloud for the sake of tech advancement. By pushing a cloud-first approach without a proper plan and actual need, you can increase costs, diminish value, and end up with an oversized infrastructure . So how do you make the most out of the ecommerce cloud?
5 steps of successful cloud adoption in ecommerce
There are multiple cloud adoption frameworks, and a lot of things depend on the business needs. However, a typical cloud transformation journey can be reduced to five major steps: visualization, strategy, planning, execution, and optimization.
- Visualize. Understanding where you are and where you want to be is a crucial part of the process.
- What are your primary reasons for considering the cloud?
- Are you looking to unlock new opportunities?
- Do you need more flexibility and scalability?
- Strategize. In order to execute everything properly, examine your resources, infrastructure, and architecture.
- Evaluate out-of-the-box SaaS solutions.
- Consider Infrastructure-as-a-Service and Platform-as-a-Service options.
- Decide whether you will do this in-house or outsource.
- Plan. Understanding what needs to be done, when, and how, is critical for successful ecommerce in the cloud. Make sure to:
- Define the scope of work.
- Discover cross-system dependencies.
- Set clear acceptance criteria.
- Execute. Whether you are setting in infrastructure, moving your application to cloud, or redeveloping your legacy product, remember:
- Iterate according to the plan.
- Stick to acceptance criteria.
- Share results (e.g., during demos, especially if you decide on behavior-driven or feature-driven development).
- Optimize. Cloud adoption does not end with the deployment to cloud.
- Create operational dashboards.
- Keep your logs handy.
- Don’t forget about DevOps pipelines.
Here at N-iX we help clients develop the best cloud strategy for their business case, create a roadmap, and develop a solution that best fits their business needs. Whether they need cloud readiness assessment or infrastructure setup, architecture redesign, migration, and maintenance, we are there to help on every step of the way.
What is the best cloud-based ecommerce solution for your business?
Handling ecommerce in the cloud only seems like an easy thing. However, there are hundreds of things to account for. That is why companies tend to look for solutions that will make the transformation easier. There are three major types of cloud based ecommerce solutions: software-as-a-service, platform-as-a-service, and infrastructure-as-a-service.
When you opt for SaaS, you receive a service rather than a raw platform or hardware/computer power. The service-level agreements define the application server, operating system, and database. They also define terms like expected availability and performance.
Benefits of SaaS in ecommerce
- Updated to the latest software version. Typically, ecommerce platforms release new features and introduce them to all users within a short timeframe.
- Monthly subscription. SaaS offers monthly subscriptions and can be billed on a specific day of the month.
- Easier maintenance. The provider is responsible for maintenance, hosting, performance, and speed.
- Quick to install. It is one of the fastest ways to launch an ecommerce website.
However, there are certain downsides to the use of SaaS platforms:
- Lack of customization. Due to the set of predetermined features, tools and themes, you need to make it work with what you have.
- Complexity. To cater to a broader audience, these solutions come pre-packed with a lot of stuff you may not actually need.
- Little to no B2B support. The lion's share of platforms is working with a B2C sector and rarely cater to larger clients in a B2B.
- Limited in terms of payment options for clients. Most out-of-the-box solutions have only several payment gateways.
Common examples: BigCommerce, Shopify, Salesforce, etc.
Who can benefit the most from SaaS in ecommerce? Small to medium companies that need to quickly launch and have no in-house resources for development.
With PaaS, vendors provide you with a platform to develop, run, and manage an application without taking care of the infrastructure behind it. They are also responsible for the application server, runtime, database, and hardware. Some vendors will also help you with auto-scaling for you, scale up and down when needed. Overall, Platform-as-a-services has many benefits:
- Allows for simple and cost-effective development and deployment;
- They are scalable;
- Highly available and offer stable performance;
- Can be customized to your needs;
- Allow you to reduce the time needed for coding;
- Provide you with automation tools.
- Offer easy migration to the hybrid deployment model.
However, you need to be aware of particular challenges you may face. The capabilities of PaaS are limited to what they can offer. In other words, if you require additional flexibility or customization, you might be out of luck. You may also have limited deployment rights for the third-party applications (e.g. monitoring agents).
Typical examples: Magento Commerce Cloud, Oracle Commerce, Hybris, Sitecore, and others.
Who can benefit the most from PaaS in ecommerce? Companies that are further along in their tech development and need access to the code, storage, and databases.
IaaS is the cloud-based alternative to a physical, on-site infrastructure. One of the biggest advantages of this model is over application servers, virtual machines, and operating systems. You choose what software to run and which configurations to choose. It also offers the flexibility you need to deploy and configure an enterprise-level ecommerce website.
An IaaS provider is responsible for the installation and maintenance of equipment and basic infrastructure software. This model has multiple advantages:
- Highly scalable and the most flexible option;
- you remain in control of your infrastructure;
- Accessible by multiple users;
- Pay-as-you-go model;
- No need for physical servers.
However, there are certain drawbacks when dealing with infrastructure-as-a-service.
- You need to have cloud and DevOps experts that will help you go through this transformation.
Common examples: Amazon Web Services (AWS), Cisco Metapod, Microsoft Azure, Google Compute Engine (GCE), DigitalOcean, Linode, Rackspace
Who can benefit the most from IaaS in ecommerce? Large online stores or marketplaces that need to have complete control over their processes. It can also be beneficial for companies with unpredictable scaling needs.
Overall, all three models differ in the degree of provision and your involvement in development.
If neither of these models suffices, you can opt for Everything-as-a-Service (XaaS). These are highly customizable, data-driven products and offerings that customers fully control.
4 tech trends of ecommerce that rely heavily on the cloud?
Apart from bringing multiple benefits to ecommerce companies, cloud transformation also allows jumpstarting other tech advancements.
The amount of data modem companies collect is enormous. Ecommerce companies are no exception. However the question is how this information is stored, processed, visualized, and used further? If treated properly, it can help you:
- Get better insights into all the processes;
- Understand customer’s journey better;
- Predict demand changes and seasonal spikes;
- Optimize pricing;
Many retailers rely heavily on AI to boost personalization and offer better customer experience. Some companies are integrating AI into virtual assistants and chatbots, and customer support platforms. Others focus on demand forecasting to make smarter choices for digital promotion strategies. But most of all, ecommerce needs AI for hyper-personalization that will bring the shopping experience to the next level.
Omnichannel marketing and shopping experience
Whether we are talking about social media and mobile shopping or online to offline (O2O), the line between is blurring. Some ecommerce companies (like Alibaba) are already experimenting with IoT solutions and ML learning algorithms to engage more customers. It will also help companies improve their digital marketing efforts, especially targeting clients who prefer to research online and buy offline.
Back office improvements
We did not forget about the systems that power successful retail and ecommerce. Cloud adoption can significantly improve inventory management, supply chain, and delivery processes. Many ecommerce companies are looking for self-learning, predictive, adaptive, and intelligent systems, also known as cognitive supply chains.They help companies improve and personalize customer service and decrease inventory overhead.
Why choose N-iX for cloud adoption in ecommerce?
- N-iX has an international pool of 1,500 experts and a database of 600,000 potential candidates.
- We have almost 20 years of experience in building lasting partnerships with Fortune 500 companies and industry leaders.
- The company is a certified AWS Advanced Consulting Partner, a Microsoft gold certified partner, a Google Cloud Platform Partner, an Opentext Services silver partner, and an SAP partner.
- We help businesses adopt hybrid clouds and make the most of it. Our expertise in cloud computing includes cloud-native services, on-premise-to-cloud migration, cloud-to-cloud migration, and multi-cloud management.
- N-iX has broad data expertise to design different data solutions: Big Data / Data Warehouse / Data lake development, Business Intelligence, Data Science, Artificial Intelligence & Machine Learning, etc.
- We offer professional DevOps services, including Cloud adoption (infrastructure set up, migration, optimization), building and streamlining CI/CD processes, security issues detection/prevention (DDOS & intrusion), firewall-as-a-service, and more.
- N-iX is compliant with PCI DSS, ISO 9001, ISO 27001, and GDPR standards.
Ecommerce in the cloud: Our expertise
- N-iX has built a lasting partnership with PrettyLittleThing. Our team built a solution that allows the client to automate the product creation process. We have contributed to the development of the AWS Lambda-based cloud solution that is both stable and secure.
- Our client (under NDA) is one of the world's largest fashion retailers, with eight brands that are sold in 202 markets through its online platform. Among other services delivered was migration to microservices which provided scalability and stable performance for big sales like Black Friday. It also served as a platform for further implementation of promotion management and proposal management systems.
- We also partnered with an American Fortune 500 industrial supply company. One of the products is a B2B e-commerce website with 1.6M items. The client needed help migrating their on-premise system to the cloud. It allowed them to save costs, introduce effective data management solutions, machine learning algorithms, and more.
- Another client is a leading consultancy and technology group specializing in workforce technology, supply chain, point of sale, and in-store digital solutions. The N-iX team has joined the client’s in-house specialists in the development and maintenance of several products. We’ve integrated a complete CI/CD pipeline using Azure DevOps, improved performance on one of the products, making it 60 times faster, and contributed to development of several other products.
- Future of Retail 2021. Report by Insider Intelligence. https://www.emarketer.com/content/future-of-retail-2021#page-report.
- New Google Cloud research examples COVID-19's impact on the retail industry during the 2020 holiday season by Google. https://cloud.google.com/blog/topics/retail/new-google-cloud-research-on-covid-19s-impact-on-retail-during-2020-holiday.
- Predictions 2021: Cloud Computing Powers Pandemic Recovery by Forrester. https://go.forrester.com/blogs/predictions-2021-cloud-computing-powers-pandemic-recovery/.
- Maximizing the impact of technology investments in the new normal. Deloitte Insights. https://www2.deloitte.com/xe/en/insights/focus/cio-insider-business-insights/impact-covid-19-technology-investments-budgets-spending.html.