The State of Ecommerce Platforms: Cloud Commerce, Open SaaS and The API Economy (Updated 2020)
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Meeting your business objectives isn’t easy – no matter how many Inc., Entrepreneur, Fast Company or Medium posts go viral within the executive community explaining why this or that strategy produced hockey stick growth.
The truth of the matter is this:
What makes your business successful is your dedication to customer experience, your market strategies, your operational efficiencies and the team of people you build.
Your unique combination of these aspects is unlike that of any other ecommerce business out there – and is why no FUD headline like “Why Your Business Will Fail” or “8 Innovative Ways to Skyrocket Growth” will ever fully apply to your brand.
Of the many decisions you make to drive success for your online business, one of the biggest is which pipes you install.
That is, which ecommerce platform you choose to power your business and ready it for scalable, long-term growth.
The selection of one of these four platforms is where you can truly unlock performance.
Understandably, this decision has wide-ranging implications –– to your customers in engaging with your brand and reducing friction of getting the product they need, to your employees that have to implement campaign strategies, and to your bottom line in terms of sales growth as well as cost of maintenance and installation.
The following ecommerce platform comparison and explanations will help you evaluate the key criteria and make an honest assessment of which solution best suits the needs of your business.
- What an ecommerce platform is.
- Why brands use them.
- What your options are (hint: Open-Source, SaaS, CaaS).
- What the heck cloud even means these days (hint: it’s just where your hosting environment is).
- How an ecommerce platform can benefit your business.
- Important features + questions to ask your ecommerce platform solutions in your consideration set.
- An advantage and disadvantages breakdown of the most popular platform options.
- Additional FAQs in case we forgot anything.
Let’s dive in.
What is an Ecommerce Platform?
An ecommerce platform is a software application that allows online businesses to manage their website, marketing, sales, and operations.
Ecommerce platforms like BigCommerce offer the powerful features needed to run a business, while also integrating with common business tools — enabling businesses to centralize their operations and run their business their way.
Why Use an Ecommerce Platform?
Whether you’re expanding a brick-and-mortar store, looking to find an enterprise-level solution, or even starting a business from scratch, your choice of ecommerce software has a huge impact on the profitability and stability of your business.
The only real alternatives to using an ecommerce platform are:
- Building one from scratch, which is out of the question for most businesses — and only justifiable for multimillion (or multi billion) dollar companies.
- Using a plugin, which isn’t an option if you’re looking to build and grow a legitimate business – even a small one.
What Ecommerce Platform Options Are There?
There are 3 main ways to classify the different types of ecommerce platforms:
- SaaS (Software as a Service).
- Headless Commerce.
Beyond this, there are two ways in which ecommerce platforms offer a hosting environment for their customers.
All business owners need a hosting environment to run their ecommerce store.
The two types of web hosting environments are:
- Cloud: Hosted Elsewhere.
- On-Premise: Self-hosted on your business premises.
Let’s take a look at each of these.
Open-Source Ecommerce Platforms.
- Hosting Environment: Cloud or On-Premise, though all patches and platform updates require manual implementation across the board.
Open-source ecommerce platforms are ecommerce solutions in which you can modify all aspects of the code.
This type of ecommerce platform was the most popular in the early 2000s and remains popular with development and IT heavy organizations who want 100% control of their ecommerce environment.
Using an open-source ecommerce platform means you – the brand – are responsible for:
- PCI Compliance.
- Hosting (depending on if your open-source solution is on-premise or cloud).
- Cloud commerce solutions that are open-source differ from on-premise only in that your hosting environment is offered by your provider and managed off-site.
- Keep in mind that just because your ecommerce platform is hosting your store using a cloud environment doesn’t mean you have unlimited bandwidth like you would see on a SaaS solution. Ask about specific bandwidth allowances, specifically if you are evaluating Magento or Volusion.
- Manual patch and update releases from the platform provider.
- Security issues.
- QA for all additional applications, often including integrations with:
- Analytics and BI tools.
- The building of net new tools for the site, often including:
- Discount and promotion engines.
- Merchandising and marketing tools (e.g. SEO features, email marketing).
- Design drag-and-drop builders.
For many brands, open-source ecommerce platforms are too cumbersome, expensive to maintain, and require too much technical knowledge.
As such, there has been a massive movement to the two other types of ecommerce platforms:
- Headless Commerce.
In fact, open-source ecommerce platforms hosted via the cloud (i.e. not on-premise) are today only 46% of the consideration set for large ecommerce brands.
Because on average, open-source ecommerce platforms and sites have a 6x annual cost of ownership versus SaaS or Headless Commerce models.
Brands can get to market materially faster with SaaS and Headless Commerce, in an average of 55 days.
And we live in an incredibly competitive environment, where a slowdown to beautiful and innovative UX, product or backend optimizations can give your competition the leg up.
The Number 1 SaaS Ecommerce PlatformInternet Retailer’s 2018 survey found BigCommerce to be the #1 SaaS ecommerce platform preferred by mid-market and enterprise retailers. Learn more by downloading their report.
SaaS ecommerce platforms.
- Hosting Environment: Cloud.
SaaS ecommerce platforms remove much of the complexity from running an online business because instead of managing the software yourself.
Instead of building and developing a custom solution or an open-source solution (which is often developed upon so much as to be custom), you essentially “rent” the platform.
When factoring in development cost, this is a vastly cheaper option than open-source solutions.
Product updates, security, hosting, PCI compliance, and every other task that comes with managing your own software are managed by the SaaS provider.
Marketing and growth teams at ecommerce brands are often the internal cheerleaders for SaaS ecommerce solutions at their organizations. This is due to a SaaS solutions ability to go-to-market quickly and affordably.
IT and development departments are often concerned about a lack of flexibility and customization due to the closed off portion of code on a SaaS solution. APIs help to ease this concern, as well as non-proprietary coding and staging environments for UX build outs.
Platforms that meet the above criteria are often referred to as “Open SaaS.”
Headless Commerce platforms.
- Hosting Environment: Cloud.
Headless Commerce is a version of CaaS ecommerce in which the shopping cart is decoupled from the CMS.
In these use cases, brands often use a design experience platforms (DXP) such as Adobe Experience Manager and Bloomreach or a content management system (CMS) like WordPress or Drupal. Then they plug in a decoupled ecommerce shopping cart solution to serve as the cart.
SaaS technologies like BigCommerce are also often used here in place of decoupled carts due to their low total cost of ownership and high API flexibility.
Historically, with on-premise hosting, open-source platforms or proprietary platform builds, IT and development departments at large brands have been controllers of the business.
However, due to the high cost of monolithic technology stacks and need for speed and innovation from a marketing standpoint, SaaS and cloud hosting disrupted the model.
Headless Commerce alleviates this pain point by allowing for faster go to market with significantly lower total cost of ownership.
Using APIs, plug-ins, and occasionally decoupled technology, brands can maintain their single source of truth monolithic systems on the operations end.
Other decoupled solutions a Headless Commerce provider works with include:
- Content Management System (CMS).
- Enterprise Resource Planning (ERP).
- Email Service Provider (ESP).
- Product Information Management (PIM).
- Order Management System (OMS).
- Point of Sale (POS).
- Marketplaces like Amazon or Ebay.
On the presentation layer, SaaS APIs allow for a modern SaaS technology stack, including ecommerce SaaS platforms as well as everything from ESPs and even lighter weight ERPs like Brightpearl.
The best analogy to give here is like IKEA furniture.
The individual pieces of the item are the microservices and, when put together, they create a final finished project.
For many ecommerce brands, the first step toward this microservice architecture is being done via Headless Commerce.
This allows the brand to have increased control over their ecommerce store, while out-sourcing PCI compliance and security best practices and assurances to a commerce solution provider – either as a decoupled solution or via the SaaS platform itself, the latter of which is the most common.
Let’s look back at our IKEA example and take the classic IKEA nightstand.
If you replace the top piece of the nightstand with their new wireless charging enabled top, you’ve done headless commerce in a way:
Using a different front-end piece that gives you an updated take on the original, but still with the same foundation and utility (e.g. drawer = cart/checkout).
What Are The Benefits Of Self-Hosted vs. Cloud?
There are two ways ecommerce sites can be hosted:
Neither of these two options are platforms in and of themselves.
They are merely how the site itself is hosted, with machines on-site (literally in a room that your IT or development team control and manage) or off-site and managed in a warehouse (think Amazon Web Services, for instance).
Self-hosted ecommerce platforms.
Self-hosted ecommerce platforms require online store owners to find hosting, deal with installations and oftentimes perform updates to the software manually.
Running an ecommerce website using self-hosted ecommerce software requires developers to maintain and update the website, which can get quite costly and time-consuming.
The benefits of this option include more control over your online retail platform, greater visibility of your own data, and a better understanding of data security.
While this route makes sense for some extremely complex businesses, it usually results in higher expenses and lower revenues.
Cloud-hosted ecommerce platforms.
Cloud-hosted ecommerce platforms offer hosting for their customers via off-site solutions like Amazon Web Services.
This means the cloud platform manages uptime for the brand. Cloud ecommerce platforms like BigCommerce manage 99.99% uptime annually and have had 4 years of 0 downtime during Black Friday and Cyber Monday, the highest trafficked times of the year.
Not all cloud-hosted ecommerce platforms offer automatic installations of patches, updates or upgrades. Only SaaS and Headless Commerce solutions do that.
This is where solutions like BigCommerce and Salesforce Cloud Commerce (both SaaS solutions) differ from a solution like Magento Commerce (Cloud).
Platform of Many Names
Magento 2 is now called Magento Commerce (Cloud) or Magento Enterprise Cloud Edition (ECE).
Magento renamed their offering within the last 6 months, which is a little confusing.
How Will An Ecommerce Platform Benefit My Business?
In addition to scalability and protection of your data, ecommerce platforms, whether hosted on-premise or in the cloud, offer a handful of operational benefits and business tools.
- A product management suite.
- Search capabilities.
- The ability to personalize sales and services to your liking (e.g. payment options, marketing features, mobile app, add-ons, etc.).
Ecommerce platforms offer business owners the ability to customize product information and how it’s solicited to best fit their own online retail needs, which can be a mutual benefit for both the business and its customers.
For larger organizations using their own ERP, PIM or OMS solutions, ecommerce platforms offer open APIs for data syncing as to not disrupt business as usual.
What Are Important Ecommerce Platform Features?
Every online shop has unique needs, and choosing the right solution is wholly dependent on the platform’s ability to solve the day-to-day challenges inherent within your organization.
There are, however, some basic things you should find out about prospective provider.
Important ecommerce platform features:
- Hosting environment, domain name, year-over-year uptime and bandwidth.
- Unlimited API call volumes.
- Website builder with free, user-friendly site themes in non-proprietary languages.
- Extensive application marketplace full of pre-built integrations with best-in-class service providers.
- Mobile optimized site, checkout and full experience (out of the box) and fully customizable.
- PCI Compliance mitigation.
- Search Engine Optimization (SEO) features and fully customizable URLs throughout the site.
- Built-in basic ecommerce features including promotions and discounts, analytics, catalog management, WYSIWYG editors, etc.
Things to Consider When Choosing an Ecommerce Platform
Social media integration.
Social commerce is getting more important by the day.
Advertising to social media users is a must if you want to capture a massive and engaged audience.
Facebook alone boasts over 1.94 million active monthly users. That’s a lot of potential customers.
With the advent of Buyable Pins, Facebook Shop and Shopping on Instagram, you can even sell directly to users without them needing to leave their platform of choice.
Most important social media integration questions to ask a provider:
- Please describe how we can publish our product catalog to Facebook Shop. Is there an additional cost for this service?
- Can users check out within Facebook or would they be redirected to our ecommerce store?
- Do you support Pinterest buy buttons?
- Do you support Shopping on Instagram?
- Does your product meta data include Open Graph Tags?
- Please describe how we can publish our product catalog to Facebook Shop. Is there an additional cost for this service?
- Are social media sharing links on PDP supported?
- Are social media sharing links displayed post-purchase?
- Can customers or end users login to our storefront using Social Login (Facebook, Amazon, Google, etc)?
- How can we display User Generated Content such as Pinterest or reviews in our store?
The number of products you can sell.
Maybe you offer a wide assortment of products, or perhaps a significant number of variants for your basic product line.
This can add up to a lot of SKUs, and some platforms are better than others when it comes to SKU count.
If you have a large catalog or plan to grow your business, choosing a platform with low SKU limits essentially restricts the upside of your business.
Most important catalog management questions to ask a provider:
- Please describe how we can manage our product catalog within your system.
- How do you import/export catalog & customer data?
- Can we preview our product catalog in any theme, without purchasing the theme?
- Can we add multiple images per product? Is there a limit to the number or size of images?
- Do you support SKU level images with image switching on variation selection?
- Is Product Image Zoom enabled by default?
- How easy is it to add video to PDP? Is there a limit on the size and length of videos we can upload?
- Please describe how product options and option sets are managed in your system
- Please describe how variations or options can be configured?
- Is there a quick edit option available to modify stock levels or pricing change?
- Do you support both digital and physical products?
- Is inventory management built-in?
- How do you support real-time Inventory sync within multiple channels?
- Can inventory be tracked at variation level?
- Does the shipping system understand and support Dimensional Weight?
- Are Custom Product Attributes supported?
- Can you configure related items?
- Is it possible for related items to be automatically generated?
- Do you allow pre-orders?
- How do you support custom Product Pages? Can these be configured per category?
- Are Product Reviews built-in?
- Is it easy for customers to share products with friends from the PDP?
- Is Site Search predictive?
- Can Categories be sorted manually in the Control Panel?
- Can Categories be used for Private Sales?
- Are Category Filters supported?
- Do Categories & Products have Breadcrumbs?
- Are Page/Product/Category URLs auto-generated?
- How can we customize the product and category level URLs?
- Does the platform support multi-level category navigation?
Understand what customer service is provided.
You’re inside an ecommerce platform every single day.
No matter how intuitive the design or straightforward the features, at some point, you may need assistance.
And when that time comes, it’s good to know that you can get ahold of a real-life person to assist you with the problem.
Some platforms outsource their customer service and make it difficult — or practically impossible — to call in and get help when you need it most.
At BigCommerce, we feel that every one of our customers is entitled to personalized customer support.
Most important customer service questions to ask a provider:
- Please provide details about your on-boarding processes for new clients.
- Please provide an example of an implementation timeline.
- Do you provide training and user documentation for the entire platform?
- Please describe your support process (including tools) along with standard SLA’s.
- Please describe your change management processes including the system audit logging capabilities.
- How does our historical data (orders, customers, products) migrate to your solution?
- List all Services resources who will be dedicated to our business.
- Provide an example of a QBR or Customer Success Plan you offer your customers
- Do you have extended support hours for supporting an event’s onsite operation?
- How big is your customer support team and where are they located?
- Please detail your Phone Support offering. Is it available 24/7? Is there an additional cost associated with this service?
- What are your average wait/response times for phone support?
- Is there a priority queue available for urgent and time-sensitive requests?
- Can we get a dedicated Support Representative if needed?
- What ticketing system do you use? How can we track status of our tickets?
- What are your Support SLAs?
Best Ecommerce Platform Comparison
All ecommerce platforms have their advantages and disadvantages. It is important for businesses to evaluate the various platforms based on their own specific needs and use cases.
Here is an overview of the most popular ecommerce platforms, their advantages and disadvantages.
BigCommerce is considered an Open SaaS platform provider and a growing Headless Commerce provider based on low total cost of ownership and highly flexible APIs.
BigCommerce’s advantages include uniquely sophisticated customizability and flexibility of the platform for a SaaS ecommerce platform. For this reason, it is the #1 SaaS platform of choice for mid-market and enterprise brands.
The platform offers small business and start-up plans as well, with more built-in features and 100% URL (SEO) control across the board than competitors. The integration options, like our headless WordPress plugin, make the platform a frontrunner across headless commerce solutions.
BigCommerce’s initial learning curve is higher than some other SaaS platforms due to the complexity of built-in features.
Magento is historically an on-premise, open-source solution preferred by brands who have already heavily invested in IT or development teams. Magento 2 (AKA Magento Commerce Cloud or Magento Enterprise Cloud Edition) launched a cloud, open-source solution in more recent years.
The advantages to Magento include 100% control of your own ecommerce instance.
The disadvantages to Magento include manual patch and bug updates, requiring entire site and integration QA.
Foregoing these updates can often result in a lack of PCI compliance for brands as well as data breaches.
Many of these have been high profile in news reports over the last few months.
Volusion is an ecommerce platform aimed primarily at starter stores and hobbyists.
The company currently runs and supports two different platforms, which takes a heavy tax on engineering resources as they are maintaining and building two completely different platforms.
Salesforce Commerce Cloud (Demandware).
Salesforce Cloud Commerce, formerly Demandware, is a SaaS ecommerce platform provider preferred often by high-profile fashion retailers.
It is an open SaaS model like Shopify and BigCommerce.
The disadvantages of Salesforce Cloud Commerce is the high cost and the dependence on developers.
WooCommerce is an open-source ecommerce platform, offering a cart solution in addition to a brand’s content on WordPress.
It is most often used by starter stores and hobbyists, bloggers expanding into ecommerce, and brands utilizing developers most comfortable with the WordPress environment.
WooCommerce disadvantages include scalability without slowing down the live store and the high developer costs associated with most open-source platforms. Here is more information about the history of WordPress ecommerce.
3dcart is another SaaS ecommerce platform, though typically considered more of a minor player.
3dcart advantages include multilingual support and advanced shipping solutions – no API required.
3dcart disadvantages include a lack of a CDN, resulting in poor site uptime during high traffic volumes for stores and difficult to reach customer service. They also lack modern responsive themes.
Shopify is a well-funded and public SaaS ecommerce platform provider. They are popular with starter stores, hobbyists and brands with SKU counts of less than 100.
Shopify advantages include a quick learning curve for non-experienced ecommerce practitioners, resulting in a quick go-to-market for new brands. They also have an enterprise solution called Shopify Plus. For more information on the pros and cons of each platform check out this great Shopify Plus vs BigCommerce comparison from Cart Consultants.
Shopify disadvantages include restricted API call volume, a URL structure that is not fully customizable (sections of Shopify store URLs cannot be changed), high transaction fees for not using their proprietary POS and a lack of built-in basic ecommerce features.
Kibo is an omnichannel platform provider which acquired the SaaS ecommerce platform Mozu in 2016.
Mozu was built from the ground-up, offering, in theory, the most modern of ecommerce SaaS solutions.
According to current and previous customers, however, the Mozu platform is still very much a beta project in which bugs are rampant and few items are fixed.
Prestashop is a freemium open-source, cloud-hosted ecommerce platform.
The platform can be used in 60 different languages and is popular outside of English-speaking countries where other platform providers dominate including:
Squarespace is a SaaS website platform provider. They are best known for their work with the creative community. Their ecommerce platform was spurred off by a need from that creative community for a light-weight cart to sell items.
It is used primarily by the creative community with low SKU volumes.
Squarespace disadvantages include limited shipping & payment gateway solution as well as limited discounting and complexity for basic built-in ecommerce features.
Big Cartel is an ecommerce solution designed for smaller merchants who do not need a sophisticated platform. Typical Big Cartel merchants are bands, clothing designers, jewelry makers, crafters, and other types of artists. The platform is very easy to use but has a limited feature set. Big Cartel likely won’t fill your needs if you have a large product catalog.
Similar to Squarespace, Wix is best known for its easy website set up. Keeping it simple with a drag and drop interface, competitive pricing, and modern for purchase and free themes. Wix is most often used by entrepreneurs and other small business creatives. The platform prides itself on being a solution for both beginners and experts who seek creative freedom in their website work. They are an acceptable solution for beginning stages, but lack advanced ecommerce capabilities.
With over 1 million online users, Ecwid has become a popular solution for small business owners. This solution is not a platform, but rather a widget which is intended for users who want to add a store to an existing website. If you have less than 10 products in your catalog, Ecwid is a free solution. After that, plans start at $15/month.
Episerver’s platform puts a focus on content and personalization. Another headless commerce solution, the platform strives to combine digital marketing, content management and digital commerce into an all-in-one solution. The solution is a popular choice for mid-market and enterprise-level merchants. The platform is designed to pair well with other Episerver solutions like Episerver Find and Episerver Campaign.
OpenCart is an open-source online store management program. The platform allows merchants to set up multiple stores, manage various product options and attributes, and add unlimited products. This option is popular for small businesses, freelancers, and mid-market merchants.
FAQs About Ecommerce Platforms
Should a startup use an ecommerce platform or build a custom solution?
Most ecommerce startups use an ecommerce platform – particularly a SaaS solution.
SaaS ecommerce platforms allow brands to rent the technology at a low cost, making the barrier to entry to online selling extremely low.
Custom solutions require immense monetary resources to build, and have delayed go to market times.
Are there free ecommerce platforms?
No, there are no free ecommerce platforms.
Ecommerce website costs vary. Most open-source platforms are technically free in that you aren’t paying a licensing fee, but there is a high cost in terms of hosting and development.
SaaS platforms charge a monthly recurring fee.
Costs range from $7 a month to $50,000+ a month.
Can I integrate my ecommerce platform with an Amazon store?
You can push your products from an ecommerce platform over to Amazon and vice versa. This is called multi-channel selling where you sell both on your own website as well as on a marketplace, in this case, Amazon.
What programming languages are ecommerce platforms written in?
Most ecommerce platforms are written in commonly used programming languages, including:
- Ruby on Rails.
Many SaaS companies use an abstraction layer for their programming language.
Shopify, for instance, used their proprietary Liquid as an abstraction layer for Ruby on Rails. BigCommerce uses Handlebars.
Don’t just take my word for it.
There are tons of ecommerce platform comparisons out there. I’ve chosen this one for a deep dive as the methodology is sound and comprehensive.
Here is a brief summary of how Ecommerce CEO found the data to do the research:
- Used BuiltWith to find the 20 most popular ecommerce platforms
- Pulled a giant spreadsheet for all the ecommerce websites on each platform (our Magento list had 23,887 sites)
- Used RAND function in Google Sheets to assign a random number to each row
- Collected data on the first 100 websites on each platform (100 sites x 20 platforms = 2000 sites)
- Used a team of 4 researchers to collect data for each website
- Load time from Pingdom.
- Mobile PageSpeed, Mobile UX and Mobile Friendliness From Google.
- Ranking Data From Ahrefs.
- URL test from SEO Site Checkup.
Here is the research criteria they measured against:
- Performance, including: site speed for desktop and mobile, mobile UX, platform SEO.
- Features, including: SEO tools (sitemaps, customizable metadata and URLS, bulk editing), fuzzy and exact product search, ability to send abandoned cart emails, blog functionality, mobile best practices, coupons and discount capabilities, integrated ratings and reviews, multiple product photos with zooming capability, ability to handle subscriptions/recurring product orders, dropshipping integration, ability to sell customizable products, fulfillment by Amazon integration, real-time shipping and tracking, reward points program compatibility, Google trusted stores.
- Scalability, including: number of payment gateways and options (e.g. debit or credit card, gift cards, Apple Pay, PayPal), Amazon, eBay, Etsy integrations, Facebook, Pinterest syncing, Google Product data feed, Open API, design customization.
- Ease of use, including: phone support, 24/7 support, chat support, certified additional dev/marketing support, free templates.
Here are the results of the study (in depth here and via screenshot below).
Go ahead and take a look at the article, as well as Internet Retailer’s 2018 Ecommerce Platform Report.
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