E-Commerce Today

Retail e-commerce sales amounted to approximately $4.9 trillion worldwide last year. This figure is expected to grow by 50% over the next four years, reaching about $7.4 trillion by 2025. This is more than twice the current GDP of France. The increase in e-commerce sales from 2019 to 2020 was 27%. Not many industries experience growth at this rate today.  If you don’t have an e-commerce presence you are missing out on potential sales and potential customers.

There is no time like the present to explore e-commerce options and bring your business to the Internet with a snazzy website or a cool mobile app (or both). With so many businesses moving into e-commerce and the explosion of choices available, the process has become more of a journey with many more component pieces than merely opening a Webshop. Zetaton has the experience and team to help you navigate this journey and avoid some of the common pitfalls.

The challenge with existing e-commerce

As I always tell my students at UW Parkside, building a Proof of Concept (POC) for a handful of transactions in a “trusted” environment like the University network is relatively easy. Working in a trusted environment removes many of the security considerations as this is being handled at the network level. Taking the same project and scaling it to tens or hundreds of thousands of transactions in a non-trusted environment (like the Wild West of the Internet) is a completely different problem with many more hurdles to overcome:

Cybersecurity

Aside from the high risks we are all familiar with (such as the seemingly weekly email data breach email notifications), many business owners are not familiar with the regulatory compliance involved. There are many laws and regulations that an organization must comply with when it comes to handling users' private information - in particular financial information such as credit cards. Having to manage this information yourself is a large endeavor and a big legal risk.

Managing Infrastructure

Aside from the high risks we are all familiar with (such as the seemingly weekly email data breach email notifications) many business owners are not familiar with the regulatory compliance involved. There are many laws and regulations that and organization must comply with when it comes to handling users' private information - in particular financial information such as credit cards. Having to manage this information yourself is a large endeavor and a big legal risk.

Data Persistence and Time to Recovery

As a data maintainer, you are required to control access to the data and ensure data is backed up on a regular basis in case of data loss. Almost as important as backing up regularly is restoring the data in the event of data loss in the production environment. Time offline is money lost, so we use technologies to get you back up and running as quickly as possible.

Shopping Cart Abandonment

Statistics show that 70% of online shopping carts are abandoned. This means that almost three-quarters of potential customers changed their minds before completing the transaction. Every salesperson is taught how to “close”, but how do you do this when your salesperson is a computer? As it turns out there are strategies and techniques that can be leveraged to encourage customers to not only complete transactions but also return to abandoned carts. More successful sales mean greater revenue for your business.

Customer Loyalty

In e-commerce, most of your income comes from a relatively small percentage of your customers. This is a well-established fact in the business world, known as the 80-20 rule. Identifying and catering to the 20% of customers who drive 80% of sales is obviously vital for any business. Many business owners are concerned about how to make these customers feel special and cared for when the human element is absent from the transaction. Ray Kroc of McDonald's fame once said “Look after the customer and the business will take care of itself”. Just as we look after our clients at Zetaton, we know how to make each of your special clients know they are valued and appreciated.

Returns and Refunds

Let’s face it, customer returns and refunds are part of doing business. In 2020, consumers returned an estimated $428 billion in merchandise to retailers last year, approximately 10.6 percent of total U.S. retail sales in 2020. Reasons consumers return merchandise vary, but range from defective products to shipping damage, to incorrect sizing to buyer’s remorse, but a growing trend in e-commerce is fraud. In a brick-and-mortar store, you can verify customer returns, examine the merchandise, and check purchase records and verify identity in real-time. In an e-commerce environment, a combination of third-party delivery, return processing and enormous consumer pressure to process the refund often result in fraudulent returns being missed. In fact, in 2020 approximately 5.9% of all returns were fraudulent, equating to $25.3 billion. While eliminating fraud altogether is likely impossible, we can suggest strategies and technologies to monitor and even identify potential fraudulent transactions.

Competition from Other Retailers and Direct Sales from Manufacturers

Once upon a time spinning up a web shop took some doing. It involved technical skills and basic infrastructure. More than likely, you’d need your own server and have relationships with the card networks to process payments. Now with the explosion of e-commerce platforms ,almost anybody can open a basic web shop. Further crowding the playing field are manufacturers who formerly weren’t willing to bring on the additional sales and accounting staff necessary to participate directly in retail. Now with most of the work automated, manufacturers decided to “cut out the middleman” and sell directly to consumers. Every day brings new competition. With everyone jumping on the e-commerce bandwagon, how do you protect your market share and keep your customers from going elsewhere?

Luckily most of these services can be subscribed to for a small fee. Shopify is the number one provider for such services. But it is no longer sufficient to rely upon a single platform for your e-commerce strategy.

The Problem with Standalone Shopify

Sometimes potential clients ask me what’s “the minimum they can get away with” when it comes to an online presence, to which my reply is: “Minimum Viable Product (MVP) is no longer viable”.
It is no longer advisable for your business to provide merely a “core” set of shopping functionalities to your customers. User Experience (UX) is one of the rising trends retailers are using to differentiate their business from the competition. Similar to how the customer is pampered at a luxury brand retailer, e-commerce sites are using UX in place of the “buying experience” consumers expect from luxury brands. Amazon, for instance, has set the bar high for e-commerce customer experience. What customers experience at sites they traffic regularly are now expected from any e-commerce site:

• Quick product search results.
  

• Matching search results based on the user purchase history.
  

• Checkout with a single swipe.
  

• Add items to the cart on a device and finish the checkout process from a different device.
  

• Next-day delivery.
  

While technical advances made it easier to open a web shop, new consumer demand for improved user experience (UX) once again widened the gap between the giant retailers such as Amazon and those without the enormous budget to drive e-commerce innovation at the industry level… until Shopify.

Shopify has largely negated the disadvantage faced by small to midsize businesses in providing a superb user experience at an economical price by providing a solution to many of these challenges “as-a-service”. In other words, Shopify provides “e-commerce-as-a-service” (EaaS). You can learn more about the services Shopify offers here, but here are a few of the main ones:

• Online Store.
  

• Point of Sale.
  

• Checkout.
  

• Checkout.
  

• International sales.
  

• Managing sales and revenue.
  

• Business  growth marketing  using email marketing, business chat, and social media ads.
  

Headless Architecture

While Shopify will be the backbone that will power your e-commerce platform, you still need to build your brand and choose the “best of breed” when it comes to building the UI/UX User Interface/ User Experience. “Separation of Concerns” is a topic I teach in Software Engineering at UW Parkside. In short, it means dissecting a big problem into smaller component problems and identifying clean interfaces between the solutions. In other words, instead of having a single huge application that provides an end-to-end solution with an 80% user satisfaction rate, you allow specialized organizations to provide specialized solutions to the component's small problems. These smaller, component solutions work together to create the overall solution and result in a user satisfaction rate above 90%.

Building such an ecosystem allows several service providers and frameworks to partake in providing an e-commerce solution. Services such as payment gateways, shipping, inventory management, and UI frameworks can all be provided by separate entities. The key to success here is to identify “clean” interfaces that play the role of a “contract” between the different providers to abide by any protocols and to maintain backward support

Headless architecture is a flavor of the “separation of concerns” that allows backend services, such as Shopify, and frontend frameworks, such as React, Gatsby, and Hydrogen, to work together seamlessly.
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According to Accenture, “In simple language, headless architecture means wrapping up all the business logic and functionalities in a set of APIs, which are powered by the specialized backends and make them available so that any front-end channel can hook into these APIs and provide the customer experience desired for that channel.”

Custom Frontend with Gatsby and Hydrogen

Shopify provides a very powerful backend and allows you to choose and build the frontend that suits your needs. Among the most popular and modern frontend frameworks are React and Gatsby. At Zetaton we use React and Gatsby as a frontend framework to interact with different API services. We have already used this winning combination with several of our clients:

• Using React, we built an eBay like platform for selling antiques where sellers and buyers can meet to sell/buy their items.
  

• Using React Native, we built mobile apps that connect with smart goggles at  Ciye.
  

• Using Gatsby, we built  Sydetasker.
  

Shopify has its own version of React called   Hydrogen  for building custom frontend.

Payment Processing Using Payment Gateway

Online transactions naturally require electronic payments. Before the advent of the digital payment gateway, each e-commerce merchant had to set up their own relationship with the card networks and payment processors and build infrastructure to handle card payments in a secure, compliant way. The need to provide digital payment solutions as a service led to the creation of Stripe Inc. Stripe is an Irish-American company that handles digital payments on your behalf for a small fee. In 2020, Stripe processed over $350 billion worth of payments, a 150% increase over the year prior. In addition to online payments, Stripe offers many other services you can learn more here.

While a very popular option, Stripe is not the only online payment gateway on the market. Among the other popular online payment platforms are PayPal, Shopify and Authorize.net. Choosing a digital payment gateway is highly dependent on the needs of your business. If a high percentage of your customers are of an older demographic who prefer the older tentpole brands with greater name recognition, PayPal is something you should accept online. If your customers are interested in paying in cryptocurrency there are other options that allow for this. The PayPal and Stripe platforms don’t communicate with each other natively. At Zetaton, we use each platform’s API to provide a seamless experience for your site visitors.

So what exactly happens during a digital transaction? When a transaction is completed online, a few things must happen:

• The funds are transferred out of the seller’s account to the merchant’s account.
  

• The funds are held by the platform or payment processor to ensure that the product is received and accepted by the buyer.
  

• The funds are finally transferred to the seller’s account.
  

Due to legal and regulatory restrictions, the funds can’t be held in the e-commerce platform’s own account. It must be immediately transferred the seller’s account. But sometimes the business model depends on delaying payment until the buyer is satisfied with the product or service. The solution is to use a third account specially set up for this purpose. This is exactly what we did at Zetaton to solve this problem for Sydetasker. and for an online marketplace that connects sellers and buyers of antiques.

Multiple sale channels using BigCommerce

While I have spent the majority of this article discussing how to build an attractive and effective e-commerce website, an e-commerce site as the single sale channel neglects other revenue channels and potentially leaves money on the table. Many e-commerce retailers have started to cross-post their inventory drive sales across all available platforms and drive traffic to their e-commerce websites. Google, Facebook, Instagram, TikTok, Pinterest, Snap, Amazon, eBay, Walmart, and Target are only a few of the platforms that drive e-commerce sales today. With all of these platforms, the challenge has become how to manage inventory and track prices and orders. A platform like BigCommerce allows business owners to streamline all these sales channels into one platform where you can manage inventory, prices, orders, and review data analytics in a single pane of glass.

Maximizing Profits, Minimizing Headaches

Regardless of what you sell, or how your business functions, choosing the right combination of online platforms and services is crucial for maximizing sales with a minimum of expense and headache. With the huge constellation of e-commerce platforms, digital payment gateways, API integrations, and other tack-on services it can be bewildering to know even where to begin. Choosing the right digital partner from the beginning can help you navigate the journey to the world of e-commerce and help you avoid some of the common pitfalls many companies fall into such as:

• Noncompliance with rules and regulations.
  

• Failing to harden your site against cybersecurity intrusions and data loss.
  

• Over-relying on a single platform which constitutes a single point of failure.
  

• Not considering how your target market shops online.
  

• Failing to optimize your site for search engines.
  

• And many others.
  

Zetaton is a global digital design and development company headquartered in Milwaukee. With teams located in the United States, Jordan, and Pakistan. Zetaton leverages international talent to provide a full range of digital services at an unbeatable value, while maintaining an American reputation for quality and client experience. Since it was founded by a Professor at the University of Wisconsin in 2018, Zetaton has been recognized as one of the Top Software Companies in Milwaukee and Top Web Development Companies in Milwaukee by Clutch, and as one of the Top Software Companies In Milwaukee by DesignRush.