Nowadays, there are a myriad of ways to set up a retail business online, from Instagram-only online shops to global ecommerce marketplaces. And while ecommerce has been around for a while now, the attitude of business owners towards ecommerce platforms has evolved, which the growing popularity of such emerging concepts as the MACH architecture proves.
The outbreak of the COVID-19 pandemic was a critical moment for a variety of businesses. Travel and logistics disruptions, restricted access to physical stores, and threats of a financial crisis have made companies look for new ways to stay relevant in a new business landscape and maintain their operations. Ecommerce, on the other hand, was one of the few industries to benefit from the pandemic.
However, as consumers are increasingly relying on online shopping, satisfying the ever-growing demand has become a significant challenge for ecommerce businesses. Many companies that operated conventional on-premise platforms weren’t ready for such a massive spike in consumer demand. For web stores to handle increasing amounts of traffic, companies have to increase server bandwidth and expand data storage, which requires a significant upfront investment.
In hopes of finding alternative solutions, ecommerce companies have turned to software-as-a-service platforms. In this article, we will discuss the differences between various ecommerce platforms types, explore some of the best SaaS ecommerce platforms, and figure out when to go for SaaS development services.
Types of ecommerce platforms
To understand the appeal of SaaS and see how it differs from other ecommerce architectures, let’s first review the three major types of ecommerce platforms:
On-premise. For a long time, on-premise deployment was the only option for an ecommerce store. But today, developing an ecommerce platform from the ground up, paying huge upfront development costs, buying a dedicated server, and taking care of all the emerging technical issues is reasonable only if your ecommerce solution is so unique and innovative that open-source or SaaS platforms can’t support it.
What is more, one of the biggest downsides of on-premise ecommerce platforms is their poor scalability, meaning that increasing web traffic or expanding the business would require additional storage and bandwidth increase.
Open-source. The majority of open-source platforms are free and open-source, meaning that they can be modified to cater to the adopter's specific needs. On the other hand, they also require sufficient coding knowledge to set up and maintain, which calls for continuous support from an IT team.
Open-source and on-premise solutions force businesses to build their own platform from a coding level and implement software updates themselves, respectively. Both scenarios take time that businesses cannot afford to waste.
Opting for an open-source ecommerce platform means that a company will also need to take care of PCI compliance, ensure data protection, and figure out where to host the platform. This makes open-source platforms (such as CRM, ERP, and so on) a suitable choice for companies that need a full control of their platforms’ design and functionality.
What is SaaS ecommerce?
SaaS ecommerce is a cloud-based software licensing model where a service provider takes care of backend operations. This allows businesses to cut costs, accelerate time-to-market, and easily scale up operations.
Ecommerce SaaS benefits
SaaS ecommerce platforms allow adopters to expand storage and add new functionality on demand, enabling unlimited scalability.
Opting for SaaS, platform companies can reduce ecommerce development, deployment and maintenance costs.
Easy to maintain
Since SaaS ecommerce providers take care of software updates, bug fixes, server maintenance, and more, companies can do without a dedicated IT team.
The majority of SaaS ecommerce platforms are easily compatible with many other business systems, including ERP, POS, and 3PL.
PCI-compliant and secure
All major SaaS ecommerce platforms are PCI-compliant, ensuring that customers’ sensitive financial information is well-protected and mitigating regulatory risks for companies.
In my opinion, SaaS ecommerce platforms offer the best of both worlds. They combine the advantages of open-source and on-premise solutions, without any of their disadvantages.
When to go for ecommerce SaaS?
While SaaS ecommerce platforms offer many advantages, it doesn’t mean that they are the best choice for every business. For obvious reasons, SaaS tends to be more popular among SMEs and startups that don’t have a mature IT infrastructure and a large budget to develop the platform from scratch. Startups and SMEs also often need to rapidly scale up data storage to handle increasing traffic or tap into new business opportunities, which is much harder to do with open-source or on-premise platforms.
This is not to say that SaaS is synonymous with smaller businesses. For example, even industry giants like Adidas use Salesforce Commerce Cloud, which is a SaaS ecommerce solution.
Compared to other options, SaaS platforms offer limited customizability, but many vendors provide a number of pre-built features and easily-customizable templates, which can cover a range of business requirements. What is more, in the beginning of their ecommerce path, retailers tend to experiment with web store functionality, adding new features or changing store’s interface, and this is much easier to pull off with an SaaS platform in place.
On the other hand, if your business needs a highly-tailored software solution and you need to take full control of the project, the SaaS ecommerce platform may not suffice. At the end of the day, SaaS platforms don’t give access to source code, so there will always be a limit to your platform’s flexibility.
Comparison of leading ecommerce SaaS platforms
Now let’s discuss how various SaaS ecommerce providers differ from each other and what platform would suit your needs the best. We will discuss the capabilities of three popular SaaS ecommerce platforms: Salesforce Commerce Cloud, as well as such Salesforce alternatives as SAP Commerce Cloud and Shopify.
Salesforce Commerce Cloud
Salesforce Commerce Cloud is a SaaS ecommerce solution which was previously known as Demandware. Salesforce is used by Puma, American Red Cross, Lacoste, Burton, and hundreds of other big brands worldwide.
Understanding that B2C and B2B buyers have different needs and approaches to shopping, Salesforce decided to create two separate products – B2C commerce and B2B commerce. Organizations that sell to other businesses have a considerably smaller number of customers who make frequent purchases in bulk, while B2C companies conventionally have a broad target audience who often uses mobile to shop and makes fewer purchases. Also, unlike individual consumers, B2B customers usually know exactly what they need to buy but often research the market rigorously before the purchase.
This way, Salesforce B2C Commerce puts more focus on mobile commerce and customer personalization. With Salesforce’s B2C option, it’s easy to implement promotions, handle traffic spikes during holiday seasons, and cater to impulse buying commonly associated with B2C commerce. B2B Commerce, on the other hand, is built to cater to complex customer needs, manage higher-value purchases, provide detailed product information, and provide hyper-personalized client services.
Both Salesforce ecommerce solutions have an extensive list of features that differentiate it from other service providers. For example, Salesforce Order Management allows companies to streamline their order-fulfillment processes by creating a uniform system that connects sales, warehouse, delivery and customer service departments. This system allows companies to easily handle returns and refunds, provide customers with elaborate self-service, and have a unified view of customer orders. Companies can also modify their order flows and business logic with the simple drag-and-drop user interface.
Einstein AI, Salesforce’s bespoke engine for ecommerce predictive analytics, enables ecommerce companies to create unique shopping experiences with only a team of Salesforce consultants. Einstein AI helps personalize search results, provides product recommendations for every stage of the customer journey, and identifies and suggests similar and relevant products.
Salesforce Commerce Cloud pricing plans vary significantly based on your business model and the features you need. What is more, the amount of money you pay for Salesforce services will depend on the number of orders in the given month. Such a pricing model is especially attractive for startups and new businesses, as there is no need for large investments from the start.
SAP Commerce Cloud
SAP Commerce Cloud is part of a comprehensive bundle of SAP cloud tools. Unlike Salesforce, SAP has one solution for B2C and B2B industries but offers pre-built components for various kinds of ecommerce stores.
One of the distinct features of SAP Commerce is its modularity. Every service that resides on ServiceLayer API can be modified or replaced. Due to the big community of developers around SAP Commerce Cloud, there is an abundance of easy-to-implement integrations and an extensive knowledge base on how to use the platform.
SAP Commerce Cloud also provides out-of-the-box accelerators to minimize costs and time-to-market of ecommerce solutions. Accelerators are self-service web frameworks consisting of different templates that offer features particular to specific industries and can fit different business models.
SAP Commerce Cloud provides comprehensive omnichannel features, allowing companies to deliver a consistent customer experience across online and offline channels. This allows companies to make change catalogs, manage content, communicate with customers, and track orders in one place, which significantly decreases the friction commonly associated with omnichannel commerce.
Some of the latest upgrades of SAP Commerce Cloud are context-driven services including Merchandising for providing product recommendations and Customer Recovery, which can automatically create cart abandonment campaigns.
SAP Commerce Cloud offers a subscription-based pricing plan. The price is established from the number of components, integrations, and service storage the customer uses.
Both platforms offer exceptional SaaS ecommerce services. One may argue that SAP offers a broader functionality than Salesforce but requires more development efforts. It’s also worth noting that Salesforce has recently acquired CloudCraze to meet their B2B customers’ demands, but SAP was designed with the B2B specifics in mind. On the other hand, Salesforce’s Einstein AI personalization capabilities can’t be matched by SAP.
Shopify is a subscription-based software that allows businesses of all sizes to run an online business. Regardless of the pricing plan, all Shopify customers are guaranteed unlimited storage and bandwidth. The platform also provides one of the easiest frameworks for mobile adoption, the biggest number of payment gateways, and elaborate features for selling internationally.
Currently, the Shopify App Store has more than 6000 apps and integrations that businesses can apply to customize their ecommerce stores without programming skills. Apart from basic features found in the majority of SaaS ecommerce platforms, Shopify offers a range of tools aimed at helping smaller businesses and solopreneurs to grow their business. Some of the services that set Shopify apart include automatic generation of business and domain names and creation of logos and business cards.
Compared to offerings of both Salesforce and SAP SaaS, Shopify is much more suitable for SMEs and companies with a limited budget. It costs significantly less to build your online store, but at the same time, Shopify provides the lowest level of customizability. All in all, this is one of the most affordable SaaS ecommerce options, which allows businesses to quickly launch an online store with all essential functions.
Best SaaS ecommerce platforms in a nutshell
SAP Commerce Cloud
- Good solution for both B2C and B2B industries.
- Extensive knowledge base and a large community of developers.
- Price is determined based on the number of features the customer uses.
Salesforce Commerce Cloud
- Bespoke AI engine for predictive analytics and customer personalization.
- Different product offerings for B2C and B2B commerce.
- Pricing is based on the number of orders in a month.
- Unlimited storage and server bandwidth regardless of the pricing plan.
- Extensive list of add-ons and integrations.
- Great for small businesses and solopreneurs.
Conventionally, building an ecommerce business was synonymous with on-premise store development. But on top of staying afloat in the increasingly competitive market of today, on-premise ecommerce owners today also have to take care of increasingly challenging maintenance and upgrade tasks.
Consumer purchasing habits, expectations, and demands evolve at a rate that is nearly as fast as eCommerce technology. We observed this personally when the epidemic altered not only what people bought, but also how they bought it. With cutting-edge capabilities like personalized search, dynamic testing, and personalized product suggestions, SaaS e-commerce allows companies to quickly respond to changing consumer needs.
In a nutshell, SaaS ecommerce platforms allow for time-to-market acceleration and require significantly lower upfront costs but offer limited customizability. However, SaaS providers are expected to resolve this restriction in the foreseeable future.
With companies unwilling to deal with software updates, compliance, and server maintenance, while requiring platform flexibility and customization, more ecommerce SaaS platform providers will react to market demands and make their solutions more flexible and feature-rich.
This way, the SaaS ecommerce platform is already the best choice for retail companies wanting to fit in with the ever-changing market trends and cater to constantly fluctuating customer needs and wants.