E-Commerce Software

Software Tips

What is E-Commerce?

E-commerce, electronic commerce, refers to any trade, purchase, or sale of goods and services by electronic means (Internet, fax, mobile communications, etc.). Buyers and sellers do not have direct physical contact with one another. E-commerce primarily takes place on the Internet. Trade takes place in various areas such as business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C), business-to-administration (B2A), as well as, for example, crowdsourcing or crowdfunding.

E-commerce comes in various forms. Retail and wholesale companies can operate both brick-and-mortar and online trade and offer their goods both online and offline. However, retailers can also offer goods exclusively on the Internet.

Advantages of digital commerce

The advantages of digital commerce for customers clearly lie in the accessibility of shops, marketplaces, and auction platforms, the wide range of information options, the fast and convenient shopping experience, and the prompt delivery of goods.

For sellers, the advantages definitely lie in global reach and usually lower operating costs, targeted marketing, and independence from location. This means that even niche products, for example, can attract enough customers on the Internet.

The basis of e-commerce is the online shop. It can be operated independently or connected to an auction or sales platform (marketplaces). Naturally, several own shops (multishops) can also be used. One advantage of online retail lies in its expansion possibilities (size and type of product range, expansion of trade into additional regions or countries, etc.), which are often more limited in brick-and-mortar retail. The effort required to open a branch with premises abroad is significantly greater than setting up shipping to an additional country in an online shop.

Definition of a shop system

The shop system forms the basis for creating and operating the online shop. In most cases, shop systems are structured like modular systems and store the data in a central database. The functional scope of the shop can be expanded as needed through modules or extensions. This generally makes shop systems extremely flexible and usually highly scalable.

A shop system for e-commerce, like many other types of software, is available both as on-premises software and as SaaS software. Especially in the case of shop systems, a large number of open source systems are also available on the market. A central product database often makes it possible to manage several online shops (multishop). However, potential duplicate content for search engines is a disadvantage. The systems are usually industry-neutral. They can be tailored to specific industries via plugins, add-ons, and customizations.

In commerce, content is often managed centrally via a database using content management systems or product information management systems (PIM). For the various sales models (B2C, B2B, …), there are legal, organizational, and sales-related differences that commerce systems should take into account.

Important components and functions of e-commerce shop systems

Shop systems can be composed of a whole range of different components and functions. In addition to the most important component, the online shop front itself, these may include modules for items and product groups (e.g. customizing), marketing functionalities, or interfaces. Important components also include trust seals, payment systems, as well as risk management and fraud prevention.

Online shop

The online shop is the visible part of the shop system on the Internet. Products are presented in the shop. Using a shopping cart function, these can then be placed in the virtual shopping cart and paid for at checkout. Numerous features such as displaying accessories, similar products, customer accounts, personalized views, multimedia content, customer recommendations, etc. can make the shopping experience in the online shop more individual for customers.

Important aspects when operating the shop include target group orientation, possible product configurators, connections to marketplaces, search engine optimization (SEO), and, for example, analysis and statistics functions. The possibility of further developing the shop is equally important. Software licensing aspects must also be taken into account here.

Merchandise management / ERP

The interface to merchandise management or ERP is essential for the efficient operation of retail software. E-commerce or e-business is one of the building blocks of ERP software. If the web shop has high traffic, the automated transfer of customer data, orders, payment data, etc. is advantageous, because business operations can then be carried out more quickly and profitably.

Merchandise management or enterprise software includes purchasing and sales, inventory management, accounting, customer relationship management, payment systems, etc., and supports trade via the Internet. The connection between merchandise management and the electronic commerce system helps reduce errors, duplicate entries, etc. and supports the provision of content in the shop. For example, product availability in the shops is displayed in real time due to the connection to the merchandise management system. A central product information system ensures a consistent product presentation across all channels.

Payment methods

A crucial point in e-commerce is the payment process (e-payment process). A wide variety of payment methods and payment service providers are available for commerce solutions, and as a rule, merchants should not offer only one or two payment methods. Payment options include: advance payment, purchase on account, cash on delivery, direct debit or electronic direct debit, credit card payment, PayPal, Sofort, Giropay, ClickandBuy, payment via Amazon, Skrill, telephone and smartphone payment, etc.

The selection of payment methods is a key aspect of successful online retail. When selecting payment methods, not only the costs of the method and the risk of payment default should be considered, but above all customer acceptance. The method that is most cost-effective for the retailer does not necessarily have to be the one with the highest acceptance.

Another aspect of e-payment is the processing options. Personal payment data can be entered directly in the shop, but it is also possible to redirect to an external website. Important considerations here include not only the security standards that must be complied with, but also risk management.

Fraud prevention / fraud detection / risk management

Protection against fraud is essential for every retailer. In online retail, fraud cases are a major problem. Fraudsters not only use purchase on account and direct debit as payment methods, but also, for example, so-called “friendly fraud,” where goods are ordered, paid for by credit card, and a chargeback is initiated shortly before the cancellation period expires. Fraudsters also like to use identity theft to obtain goods.

Fraud prevention, also known as fraud prevention, can already be processed in real time during the ordering process on the Internet. For this purpose, creditworthiness and plausibility checks are carried carried out in the backend before e-payment. In this way, incorrect addresses, stolen account and credit card data, poor credit ratings, etc. can be checked. Modules and functions for fraud prevention use, among other things, session and limit checks as well as IP and duplicate booking blocks, address verification, velocity checks, and scoring.

Shopping with mobile devices

An important building block of shop systems is the functionality surrounding the shopping experience with mobile devices. In particular, increasing a shop’s reach through mobile usage options makes sales growth possible. Features such as responsive design, low page load times, easy usability, and high usability are basic prerequisites to prevent customers from dropping out before completing a purchase. When shopping with mobile devices, however, the focus is not only on purchasing goods online, but also on advertising products that may be purchased in a physical store, as well as click & collect - selecting items in the online shop and then picking them up, or even trying them on and picking them up in the physical store.

Security / trust seals

Security is a fundamental requirement for commerce on the Internet. Customers are paying increasing attention to how their data, especially banking data, is handled. The standard for data exchange between the shop and the customer’s end device is SSL encryption. Data protection does not stop with data transmission, but continues with data storage, further processing, etc.

One way for customers to find out about the security and quality of a shop is through the trust seals the shop carries. Examples include "Trusted Shops", "Google Certified Merchant".

Advertising

Whether online or offline business, advertising for the offered goods and services is essential. On the Internet, a wide variety of advertising formats and opportunities are available. For example, shop operators can use so-called geotargeting to display targeted advertising for products in search engines when a potential customer is near their physical store.

Geomarketing supports shop operators in the targeted use of banners or shopping ads for products. With re-targeting, for example, categories or products that a customer has already viewed are immediately displayed again during a later visit to the shop.

Multi-, cross-, and omni-channel sales

Multi-channel, cross-channel, omni-channel - there are many sales channels, and each of these channels has its advantages and disadvantages. In multichannel sales, the individual sales channels such as the shop, Facebook, the physical store, etc. are managed separately. In so-called cross-channel sales, the online and offline worlds are linked or connected, and goods ordered online, for example, can be picked up in the local physical store (click & collect).

In omni-channel sales, the various channels merge, and communication takes place without media discontinuity. When the individual sales channels work well together, this can usually result in business advantages.

After-sales service

By definition, after-sales service includes everything that has to be provided after the purchase of a product in terms of services such as maintenance and repair, training, instruction, or management services. Memberships in customer clubs, newsletters, SMS, or professional support are also part of service-oriented after-sales marketing.

After-sales service is a key way to differentiate yourself from competitors. Good service after the purchase is completed generally increases customer loyalty while at the same time reducing the willingness to switch.

Newsletters or mailings are among the most common and at the same time most effective methods in e-commerce marketing. In most cases, the shop system includes functions for creating and sending newsletters to all customers or to a specific customer group. However, newsletter systems can often also be connected to a shop if the shop itself does not include such features. Using newsletters, the shop operator can directly inform customers about new items, offers, events, etc. Since newsletters require an opt-in procedure, the customer is already interested in the products, etc., which makes it easier to generate leads and sales.

Client grouping / CRM

Client grouping or customer groups are a special way in e-commerce to address customers individually through specific classifications. Customer group functions can be used, for example, for individual pricing, discounts, newsletters, or product assignments. Client grouping features also include the assignment of specific designs or layouts, approval and registration functions, and net prices for B2B customers.

Interfaces

Interfaces of shop systems include not only interfaces to merchandise management or ERP, but also interfaces to price comparison engines, logistics service providers, shopping portals, Amazon, eBay and the like, as well as manufacturers and suppliers. Suitable interfaces reduce the workload. When data can be exchanged automatically with other systems (internal or external), input errors and redundancies, among other things, are reduced.

More information on interfaces.

Customizing of items

Shop systems that enable the customizing of items or their individualization are particularly interesting for shop operators offering everyday consumer goods. Allowing customers to customize mugs, shirts, etc. makes the goods and the shop particularly attractive to customers. Mass customization of products is constantly increasing. Customers want to equip items with their own creative expressions. This ranges from individual texts and images to company logos and marketing messages.

Fulfilment

In connection with online retail, it is not only the sale via a shop that matters, but also warehousing or warehouse management, packaging, franking and shipping or logistics, invoicing, dunning, as well as returns management and customer support. This range of services can either be handled by the provider of the online shop itself or outsourced to external fulfilment service providers. As a rule, logistics, i.e. shipping the goods, is handled by an external service provider or carrier.

A selection of typical basic functions for shop software:

Important additional functions include, among others:

Further tips for selecting shop systems, shop software, and web shops:

When planning your shop, consider how many products you wish to offer and whether you intend to add more products later on. Some smaller SaaS-based shop platforms impose a limit on the number of items, so you should check whether the shop solution you have chosen meets your requirements.
So-called call-to-action features are also particularly important for sales success. They encourage users to add products to their basket or appear when a customer is viewing a specific product. These features, such as pop-up windows, etc., should be available and able to be used in a targeted manner.
When making your decision, consider which target audience you wish to reach – for example, businesses (B2B) or private individuals (B2C). Businesses often prefer to receive a quote before purchasing a product. If your target audience includes businesses or local authorities, you should check whether the shop solution meets this requirement.
Product configuration via a product configurator is very important. Depending on the product, it makes sense to provide options for combining individual product features. A good example of this is vehicle configurators.
Ask about variant options and combinations for the relevant product, similar to the product configurator.
Don’t forget about cross-selling features designed to boost sales. The shop system already includes features that suggest complementary products or services to go with a product or service that has already been selected.
Please check whether the behaviour and functionality of the shopping basket and the checkout process can be customised by the online shop administrator.
To make a shop particularly customer-friendly, for example, customers should be able to view information such as current orders and availability details.
The ability to choose from different delivery options and track parcels accordingly – i.e. interfaces with logistics providers – is of great importance. In the B2B sector, delivery dates should also be displayed.
Another interesting feature for customer retention is a so-called wishlist system. This should also include the option to manage these wishlists and place orders directly from them.
Consider interfaces with ERP systems, databases, warehouse management systems, other shop systems, Google, shopping portals or partner portals. One example is a centralised data management system that is used equally by the ERP system, the warehouse management software and the shop system. This proves particularly advantageous during the order processing stage.
You should also ask whether the software includes online marketing tools such as newsletter distribution, voucher generation, a banner system, an affiliate system or similar features.
Options for configuring order settings, such as entering text (for gift cards, greeting cards, etc.), uploading files containing text (e.g. personalised messages), express orders, birthday deliveries, etc.
The platform should include modern presentation options for products, accessories and product extensions. These should include, in particular, teaser texts, professional product videos, a zoom function, detailed images, etc.
Analytical functions and options such as statistics, graphs, trend forecasts and simulations are of great importance for management decisions. The shop system should include such features.
When making a selection, consideration should be given to integration options with Office applications such as email, word processing and spreadsheets.
One independent factor that is not directly related to the software solution but should be taken into account is legal advice regarding the online shop, for example on matters such as the GDPR, legal notices, cookies and terms and conditions.
Are there recommended official or industry-standard resources and advisory services for planning and setting up an online shop, such as e-commerce best-practice guides or support from local business and industry organizations?

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