The First Kilometre: Building a Back-End That Sets You Up For Success
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The document outlines essential considerations for building a successful ecommerce back-end, focusing on decision-making, component integration, and system selection. Key takeaways include the importance of customer acquisition, service, and fulfillment, along with the need for agile processes and data ownership. Additionally, it discusses the trade-offs between different software systems, emphasizing that effective implementation can lead to significant operational efficiencies.
The First Kilometre: Building a Back-End That Sets You Up For Success
- 1. Building a Back-End That Sets You Up For Success (the first km)
- 2. Matthew Bertulli Create / Build Demac Media Socialgift.com, triplecheck.io Community (Ecommerce Toronto Meetup) Twitter: @mbertulli
- 3. Where I learn about eCommerce…
- 4. Let’s talk about… A. Making Good Decisions (5 Key “Take-Aways”) A. Common challenges when building the back-end of your eCommerce business. 1. Mid-Size Business Focus 2. Real World Stuff B. Components of an eCommerce Back-End (software & process) A. When & How Today’s focus is on the eCommerce platform and ERP systems.
- 5. Why is this even important? It’s the design that matters! How you look is only a very small part of building a successful eCommerce business. These 2 systems are the hardest to replace. They also have a massive impact on… customer experience!
- 6. Classifying Ecommerce (big ones) A. Multi-Brand Retail Nordstroms, Fab.com B. Single Brand (B2C) Frank & Oak, Bonobos etc… C. Private Sale Gilt Group D. Marketplace & Auction(2 sided) etsy, eBay
- 7. It is the when and how that matters most. The first km of eCommerce… Q: When is the right time to implement X system. Q: How do I choose? **A lot of the answers to these questions depends on the type of eCommerce business you’re building.
- 8. First, a very common example…payments.
- 9. Yikes! E-commerce Platforms Personalization Content Management Systems (CMS) Rich Media Product Information Management (PIM) Affiliate Marketing Content Delivery (i.e. CDNs) Search Engine Marketing Customer Relationship Management (CRM) Security Certification Customer Reviews & Forums Shipping Carriers Customer Service Software Shopping Comparison Engines Email Marketing Site Search Fulfillment Social Media Marketing Live Chat Web Analytics Marketplace Management Hosting / Infrastructure Mobile Commerce Performance Management & Optimization Order Management Business Intelligence / Data Mining Payment Security Payment Systems
- 10. Yikes! x2 Customer Service Photographers Community Management Merchandisers Marketing Purchasers • Search Marketer And many…many…more… • Copy Writers • Affiliate Marketer • Email Marketer Creative / Design Developers Pickers, Packers, Shippers Warehouse Management Business Analysts
- 11. Order of Importance When choosing and implementing software, systems or processes. A. Customer Acquisition B. Customer Service C. Customer Fulfillment (Logistics) It doesn’t matter what kind of eCommerce you are in, this is how it breaks down.
- 12. It’s about the tools and the process. NOT the brand of tool!
- 13. Approach (All-in-One or Multiple Integrated Systems) You have no choice but to integrate multiple systems in eCommerce. It is reality. How many systems you integrate is what you want to control. Less is more. Other ERP Ecom. Platform
- 14. Incredibly Important! Much like any human roll / process in an organization, there needs to be ownership. Data Ownership Which system owns which type of data?
- 15. Important Data Entities (types) Customer Data Product Catalog • Media (images, video) • Basic Data (sku, name, color/size) • Complex Data (descriptions, attributes) • Inventory • Pricing ** Orders Non-Product Content
- 16. Ecommerce Platform The “Hub” of a great commerce strategy. – Do this right and get exponential cost savings and efficiency savings in other applications. – Do it wrong…and the opposite happens. - Shopping Cart - Mobile Web - Content Management - On-Site Search - Product Management - CRM (basic) - Order Management (back-end stuff) - Payment Systems / Security - Customer Service - Personalization & Segmentation - Basic Shipping (printing labels etc…) - Returns Management
- 17. Open Source vs. Closed vs. SaaS Know your strengths! How much flexibility do you want? – No matter what a sales rep tells you, SaaS platforms are less flexible than open source platforms. – Flexibility = ability to test more stuff without changing platforms. How “hands off” do you want to be? – SaaS will always be faster to get going. Open Source comes with built in technical debt.
- 18. Challenge: Product Content & Ingestion Size of your catalogue matters… Some businesses get new inventory very frequently. Think fashion (fast). Quantity and Frequency are critical. The more technical the product, the more data that needs to be entered. Manufacturer data is largely garbage. Don’t depend on it! Tip: If you’re starting out, everyone on your team should know how to get new products into your system. It is also a great way for non-merchandising people to learn about your product.
- 19. Analytics You can go a very long way with Google Analytics. You can go even further with applications like KISSmetrics and mixpanel. The very biggest will use the Omniture types. $$$
- 20. Challenge: Customer Data Big Data is a big problem. Why? Very few people understand this area. Which results in… 1. We’re all in data overload 1. Even fewer folks knowing how to actually use this data. (actionable)
- 21. Mobile • Mobile is part of every good strategy now. • Not where you start in most eCommerce. – Seriously…most of the time this isn’t your first move. • Our Preferred Order – Web with mobile optimizations made in UX – Mobile Web (Responsive or Stand Alone) – Apps
- 22. Multi-Channel Commerce Selling on more than one marketplace sounds great right? • Get your own site right first. • Multiple selling channels is almost always a good thing. – Product / Inventory Management critical. – Order Management very important. – Watch your margins! – Systems Integration can be very painful.
- 23. Assumptions are Dangerous The resources available in this business are few in #… Root your assumptions in as much real world data as possible.
- 24. Pre-Mature Optimization Very dangerous! Lots of talk about scalability…dig deeper. What does that mean to you? • Visitors • Transactions • Feature Adoption • Concurrent Admin Users • Data Storage • Warehouse order processing time? None of this matters if you don’t have customers. Create some pain, then optimize it.
- 25. ERP (Enterprise Resource Planning) Q: How much do I need to start? - Answer depends on how many of the below processes you want to handle in this system. - If you’re starting out, start as light/lean as possible as ERP systems are generally expensive and don’t have top-line impact. - Accounting - Reporting - Fulfillment (Pick/Pack/Ship) - Business Intelligence - Order Management - Customer Service - CRM
- 26. Classifying Fulfillment You Own the Inventory You Don’t Own Inventory • Ideal for scaling bigger. • Drop-Ship or JIT • Heavy capital requirements • Easier to start. • Fulfillment Options • Almost no capital requirements. – Run your own warehouse • Fulfillment Options – Third party logistics – Combination? • Really popular among private sale companies. • Where everyone wants to go. • More balls in the air. You can’t • More profit margin % points to play control full customer experience. with. • You own the full customer experience.
- 27. Key Metrics (trigger points) When do you need to start thinking about automation? A. Large Order Volume Increases A. 0 – 20 / day B. 20 – 100 / day C. 100 – 1000 / day B. Customer Service Requests C. Return Requests D. Frequent Price Changes E. Received Product
- 28. Being Agile (in process) Being agile is a large contributor to success in eCommerce. Test, test, test. • But be careful to test the right things. • For example, test your picking process to see what works best. ERP Software is really hard (and expensive) to replace. Probably not the best place to test a lot… Agility fights Stability
- 29. Recap 1. When & How 2. Tools & Process 3. Ownership of Data 4. Assumptions / Premature Optimization 5. Be Agile