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Table of Contents3IntroductionGuide Overview4Chapter 1Reliability & Uptime6Chapter 2The Mobile Question9Chapter 3Online Security & Protection: PCI Compliance 13 Chapter 4Shipping & Logistics18Chapter 5The Mobile Question 23Conclusion2
INTRODUCTIONThe Ecommerce RevolutionIn the past, the cost to entry for ecommerce was incredibly high – and few stores outside ofthe big box brands could open their own online stores. Now, it is equally affordable to ownyour own site, to utilize powerful branding and marketing to increase your revenue and brandawareness, and to become one of the two million small businesses advertising on Facebook.Welcome to the age of ecommerce democratization – where every day people can start upa store, market authentically, build a loyal community and scale.With scale comes its own challenges. For brands that have gone from startup to makingmore than 1 million in a short period, you have to learn to ensure reliability and uptime,create a mobile solution, address online security concerns, and have a shipping and logisticsstrategy that can scale. As long as you’re thinking long-term, you can make choices thatensure that your technology will grow with you.In The Ecommerce Marketer’s Guide to Scaling Technology, we’ll show which potholesyou need to avoid to be able to scale your technology as you grow, and provide tips to help youget out ahead of your competition. Are you ready to join the ecommerce revolution?3
CHAPTER 1Reliability & UptimeIt may sound rudimentary, but for a small company to grow at scale, reliability and uptimeare critical to keeping customers happy and business running smoothly. Planning for the bestmeans planning for the worst. Don’t let your own success bring about your failure.Oftentimes, big jumps in visitors hitting your site thanks to promotions are unexpected (thinkof publication gift guide roundups from Mashable and the Huffington Post, to name a few). Ormaybe they’re from high traffic from an appearance on Shark Tank or a product mention in yournew documentary or TV show.Because of this, many rapidlygrowing ecommerce companieshave opted out of the traditionalon-premise, self-hosted or built-inhouse ecommerce solutions andgone with SaaS platforms instead.40% of visitors will abandon awebsite that takes more than 3seconds to load.Then again, so has Beyonce andFadar Fort. Samsung, too, is testing it out. Even the guys from Duck Commander are forgoingin-house solutions in favor of the newer cloud-based options.4
Managing Increased Traffic (and Minimizing Load Times)Why? Well, because doing so can save you upward of 60,000 per year on maintenance alone –while achieving 99.9% uptime in the form of an SLA. Regardless of the solution you choose, youneed to be prepared and confident that your online store can handle the load.And beyond just being able to handle the increased traffic, you need to make sure that yourwebsite loads fast enough. Akamai and Gomez.com, two Internet performance companies,found that 40% of visitors will abandon a website that takes more than 3 seconds to load. Thismakes load time even more critical to the success of your ecommerce company.5
CHAPTER 2The Mobile QuestionThe Necessity of a Mobile StrategyIn July 2014, a study analyzing the SEO of the top 500 retailers for Internet Retailer’s Mobile 500guide found that the mobile adoption rates across those top 500 retailers were as follows: 59%use dedicated mobile sites, 15% use dynamic serving, 14% had no mobile presence, just 9%were responsive. In all, that’s less than 50 of the top 500 retailers using responsive, and that isstill about a 3x increase from 2013 adoption rates.Of course, if that study were to be run again this summer, responsive is likely to take up a largerchunk of that mobile-friendly pie. After all, Google’s most recent algorithm update penalizesbrands not effectively addressing their mobile consumers’ needs via a mobile-ready site.For many retailers, addressing the Google algorithm update meant installing responsive designas a catch-all to not lose their Google ranking –– and that’s a great thing for both those brandsand their customers. We are currently at the internet tipping point in which mobile and desktopuse runs parallel. Mary Meeker predicted this moment in 2008, and a wealth of other expertsagree with her that desktop internet use will continue to level off as mobile rises.What took the ecommerce industry, then, so long to respond to the rise in power of mobileinternet? No, it isn’t that the ecommerce industry is slow, nor that it was unaware of the trend.6
Instead, it came down to the numbers: mobile visitors convert at drastically lower numbersthan desktop visitors. Lower conversions means lower revenue, even if you site traffic is up.53% of U.S. consumers surveyed reported they’ve never purchased on their smartphones. Toput that in perspective, for in-store and desktop checkout, only 4 and 6%, respectively, saidthey have never completed a purchase via those outlets.Yet, the lower usage of mobile commerce in comparison to in-store or desktop purchasing isno reason to ignore the platform. With malls losing dominance in the mind of the consumer,window shopping has moved to smartphones, where users can browse sites and products,bookmark what they like –– typically by sharing it socially –– and then purchase either in storeor on desktop, where typing in card information is considered more convenient. Ecommercebusinesses must go mobile if they want to grow.Responsive Design, Mobile Apps, and MarketplacesYes, Google now basically requires responsive design for you to rank on mobile search and itis certainly wise for your ecommerce site to indeed be responsive. After all, even during workhours people are using their phones to shop (we are all innocuous shoppers), and you don’twant to lose out on a sale simply because your site wasn’t convenient for a mobile browser.Alternatively, there are multiple services that can help your brand create a mobile app quickly.Mobile apps can create a personalized ecommerce experience for your customers in anindividual app. However, with an app, you require your customers to download another app totheir phone (as well as remember their Apple or Android store login to do so.Of course, there are also marketplace apps that function much like the online marketplaces youare familiar with including eBay, Amazon and Etsy. These mobile marketplaces include apps likeShopkick, on which brands including Walmart, Crate & Barrel, Macy’s and more already have apresence. It’s a more approachable app experience, since the app is applicable across brands.7
In other words, whether your create a branded mobile app or join a marketplace, having apresence in an app increases the possibility for mobile conversions and can help prove thebusiness case for staying mobile-focused first.Finally, we are moving away from creating one-stop-shop websites that function only on onedevice, browser or the like. The internet’s purpose has always been to democratize information–– and now, its helping ecommerce businesses democratize their product offering acrosspossible touch points.Mobile: More Than TechnologyEven with responsive design and a presence in a mobile app, your ecommerce business isn’tdone yet. There is more than just technology when creating a scalable mobile strategy. Whatdoes mobile friendly mean here? Short posts (less than 100 characters) with links to pages thatare responsive and easy to use while on a smartphone.This isn’t necessary all of the time. During work hours, most people are on desktop, followingtheir own industry news and taking a couple five to ten minute breaks. Give these users contentand links that provide useful, actionable information or offer a quick, convenient method topurchase. Retargeting can work well. And during commuting hours? Optimize for any potentialconversions with mobile-ready content. You’ll be addressing your customers’ needs by meetingthem on the platforms that they’re using.8
CHAPTER 3Online Security & Protection: PCIComplianceThe modern world of technology can be frightening place. Sure, the internet has democratizedinformation for developed countries, and is continuing to do so for emerging and developingcountries across the globe. Big data is beginning to reach a catalyst point, at which its use andits profitability are growing parallel –– and at exponential rates. Yet, with all of our modern daytechnologies and innovations, one very real concern still weighs heavily on the mind of mostconsumers: security.This couldn’t be more true in theecommerce industry –– an industryrife with tales of breaches andhacker takedowns. Whether you’re43% of companies had a databreach of some sort in 2014talking Wal-Mart, Target or HomeDepot –– few retailers are safe. In fact, in 2014, reports showed that some 43% of companieshad a data breach of some sort.That’s a lot of information falling in to the wrong hands. As a small company, it can feelcatastrophic. But, before you really start to worry, know this: there are solutions available toyou as you scale.9
What are PCI (Payment Card Industry) Data SecurityStandards (DSS)?The PCI Security Standards Council (PCI SSC) defines a series of specific Data Security Standards(DSS) that are relevant to all merchants, regardless of revenue and credit card transactionvolumes.Achieving and maintaining PCI compliance is the ongoing process an organization undertakesto ensure that they are adhering to the security standards defined by the PCI SSC.The SSC defines and manages the standards, while compliance to them is enforced by thecredit card companies themselves. Again, these standards apply to all organizations that dealwith cardholder data. Cardholder data refers specifically to the credit card number, along withcardholder name, expiration date and security code (CSC).And, here’s the kicker: it is a retailer’s responsibility to ensure PCI compliance.How Do You Maintain Compliance?For online retailers operating a SaaS based ecommerce store that do not have any access toany credit cardholder data (which is the case for most modern SaaS commerce platforms),your need for PCI compliance is mitigated entirely. The heavy lifting has been taken care ofby the experts working on the backend of your technology. If you host and manage your ownecommerce platform, you will need to ensure PCI compliance for your organization, and thefirst step is to determine the required compliance level.10
All online merchants fall into one of four levels based on credit or debit card transaction volumeover a 12-month period. Level 1 is the most strict in terms of DSS requirements, where Level 4is the least strict.Almost all small and medium sized businesses (SMBs) classify as the lower Level 3 or Level 4merchant, however, this does not preclude the necessity to maintain compliance with the samediligence as larger organizations. In fact, it’s a costly misconception encountered amongstSMBs who believe they do not need to worry about compliance at all because they don’t do asignificant enough volume of online or in-store sales.How to Achieve PCI Compliance on Your OwnThe PCI DSS follows common-sense steps that mirror security best practices. There are threesteps for adhering to the PCI DSS – which is not a single event, but a continuous, ongoingprocess.First, Assess:Identify cardholder data you are responsible for, take an inventory of your IT assets and businessprocesses for payment card processing, and analyze them for vulnerabilities that could exposecardholder data.Second, Remediate:Fix vulnerabilities and do not store cardholder data unless you absolutely need to. Whereverand whenever cardholder data can be retained by an external qualified body instead of yourselfis ideal, because nothing reaches immediate compliance more quickly than not storing ortransmitting credit card data at all.Third, Report:Compile and submit required remediation validation records (if applicable), and submit11
compliance reports to the acquiring bank and card brands you do business with.Keep in mind that online merchants over a certain size require quarterly external vulnerabilityscans. The largest merchants require outside compliance audits.In all, online security and data protection standards are continuously rising and complianceis critical to allow your company to grow. SaaS technologies build this type of protection intotheir platforms but for online businesses not using a SaaS solution, they are required to achievecompliance levels akin to any other online merchant.Online security is beginning to reach that point at which market saturation is high. This meansthat people are seeing online data protection as a necessity rather than a nice-to-have. Sure,big name breaches brought the issue into the public eye, but since then, much has been doneto educate the public and online merchants as to the full scope of the problem and the possiblesolutions.12
CHAPTER 4Shipping & LogisticsAmazing marketing and incredible customer service won’t get you very far without sourcing,inventory management, order fulfillment and shipping processes in place! And you need asolution that can grow with you (shipping everything yourself from your garage probably isn’tviable in the long-term).Introducing DropshippingDropshipping allows store owners to fulfill orders directly from a wholesaler or manufacturer.That means that you don’t have to worry about inventory management or shipping; you simplytransfer orders to a dropshipping partner who handles all of the inventory and logistics.Before dropshipping, there were two significant ecommerce models:1) Make a unique product from scratch.Do you love knitting cashmere cat sweaters? Great! You’ll have a completely unique productto bring to the marketplace. But can you create demand and scale your business?2) Purchase inventory in bulk.You won’t need to develop a new product, but you might get stuck with a garage full ofwidgets you can’t sell. If you do get traction, you’ll need to tackle fulfilling and shippingorders on your own.13
With dropshipping, you are only responsible for marketing and selling the products. Anotherperson in the supply chain worries about product, inventory, packaging and shipping. But thatmeans rather than finding efficiencies in the system, you’ll need to get very clever to take onAmazon, big box stores and other dropshipping ecommerce stores.The Pros of Dropshipping No startup capital.If you’re just getting started, dropshipping lets you launch without investing a lot of money.Traditional retailers need to buy and store inventory in order to sell it to consumers. But ifyou’re using a dropshipper, you can offer a full catalogue of products with little overhead. Less hassle.You don’t have to deal with on-hand inventory, which means that you don’t have to handlepacking or shipping either. This lets you focus your time and energy on marketing andgrowing your business. Easily expand your offerings.If you want to expand your offerings, dropshipping is a great way to test new products withyour audience. This will allow you to truly see if they’re a market fit without having to invest inlarge amounts of expensive inventory up-front.The Cons of Dropshipping- Managing the logistics.The logistics can be hard to overcome as your business expands and is even more of achallenge if your supplier relies on multiple warehouses. Poor logistics management can leadto a subpar customer experience, due to improper tracking numbers, incorrect addresses or14
The Cons of Dropshipping (Cont’d)to a subpar customer experience, due to improper tracking numbers, incorrect addresses orshipping delays.- Low barrier to entry.This sounds like a positive, and it is. But because of the low barrier to entry, plenty of otherpeople will be selling the same products. This means there’s stiff competition. Remember, ifa supplier dropshipping for you, they’ll dropship to anyone, and that makes it tough to standout.- No control over the packaging.If you’re an online-only store, the very first physical interaction you have with your customersis when they open their purchase. If you’re dropshipping, you give up control over packaging.That means no special touches or cute thank-you cards that really make your store stand out.Most reputable dropshippers will at least allow for private label shipping with customizedinvoicing and packing slips.- Tight profit margins.It’s difficult for small businesses to compete on price, and the nature of dropshipping meansyou aren’t selling a unique product. Make sure you are ready to invest in something that willdifferentiate your store, like great educational resources, strong copywriting, or building aniche market.15
Avoid These Common Dropshipping MistakesOnce you’ve decided to dropship, make sure you avoid these common mistakes.Expecting Your Products to Sell ThemselvesAs mentioned above, dropshipping automatically puts you in a competitive space, becauseothers are selling exactly the same thing that you are. It’s all too easy to think that you’ll be ableto set up dropshipping for your store and then have an instant money-maker. The opposite istrue — when you’re dropshipping, you need to put all of the time that you save on shippingand fulfillment into marketing and SEO. Those are the elements that will drive traffic to yourstore and make you sales when you’re a dropshipper. Since you can’t control the fulfillmentor packaging with dropshipping, you always want to put a priority focus on quality customerservice and giving customers a positive experience with the parts of the buying process thatyou can control.Another way to stand out from the crowd when dropshipping is content. Use content todifferentiate and create a community of people interested in your brand. And, kickass productlanding pages are opportunities to put your products in the best light.Relying Too Much on One Supplier or Not Testing SuppliersIf you rely on one supplier without having a back-up, you’re setting yourself up for logisticalissues down the line. What if they raise their prices to a point you can’t afford? Or go out ofbusiness? Or simply decide not to work with you any more? Even on the less drastic end ofscenarios, they could be out of stock on a product and have no idea when they’ll get it back instock. Always have a backup supplier that you can turn to if your go-to supplier doesn’t workout for a particular order.16
Every time you start working with a new supplier, you should make sure that they cut themustard by placing test orders. When you get the order, examine it closely, considering thepackaging, shipment time and so on, and make sure that everything is top-quality. It’s agood idea to continue placing test orders on a somewhat regular basis. Fulfillment is criticallyimportant to any online business, and you want to catch any slips in quality.Stressing Over Shipping RatesDealing with shipping rates can be a hassle, even if you ship all your orders from one location.If you ship from more than one warehouse, or dropship through multiple suppliers, it can bea nightmare. What if an order draws on two different warehouses, or three different suppliers?Instead of stressing about multi-location shipping on every single order, take a step back andlook at the big picture. What are you trying to achieve? Accurate shipping rates? Or more sales,happy customers, and repeat business? If you’re burning energy over shipping prices on everysingle order, that’s energy you’re not spending on creating a better shopping experience,growing your store, marketing and so on.So what should you do instead? Take a look at past orders and use them to work out a flatshipping rate. Or perhaps a tiered rate based on cart value. Will it cut into your profit margins?Yes, on some orders. But you’ll come out ahead on others, and if you’ve set your flat rate properly,shipping costs will even out over time. Also, flat rate and free shipping has been shown toincrease conversion rates—one of the main reasons customers abandon their shopping cartsis because of shipping costs. A flat shipping fee removes confusion and seemingly “hidden” feesthat show up at checkout.As you can see, dropshipping isn’t a one-size-fits-all solution, but it can be a great way to startor scale an ecommerce store. But, at every stage of your business, you need to step back andevaluate whether or not dropshipping makes sense for your store.17
CHAPTER 5Measuring SuccessNow that you’ve tackled technological issues that could prevent your ecommerce companyfrom reaching its full potential, it’s important to take a step back and figure out how to see ifyou’re tracking towards your goals.The Internet Has Leveled the Playing FieldThe internet has an infinite amount of benefits, but one in particular that has wholly disruptedbusiness operations. The world wide web allows for equal and fair access to websites, whichmeans that startups and small businesses are essentially on an equal playing field with their bigbox competitors when it comes to ecommerce.This makes for a monumental advantage when it comes to smaller ecommerce shops. Throughan easy checkout process, excellent customer service and a smooth delivery experience,startups and small businesses can oust competitors who have long been household names.This is exactly what Warby Parker did, ousting Luxottica, or what Rent the Runway did, oustingDavid’s Bridal, among others.Of course, as legacy brands become more and more educated to the power of ecommerce, theirlarge budgets follow. And, more often than not, those budgets are going toward analytics that18
help these brands optimize for repeat customers and quickly notify them to what is working ontheir sites and what is just sitting in inventory.In other words, legacy brands do have a leg up on smaller retailers when it comes to ecommerceand it’s in the amount of intelligence they are using to drive conversions and increase revenue.Your big box competitors aren’t simply monitoring new and repeat visitors, or from where theirweb traffic comes. No, they are using enhanced ecommerce analytics to push visitors down apurchase funnel from the moment they land on the site.But technology means that these metrics are available to you, too. Technology enables youto be able to look at the top metrics these retailers are using, and apply them to your ownbusiness. In fact, it is critical that you do so to grow.Cost of Acquiring a Customer (CAC)Before customers can begin purchasing on your site, you need to get them there first. Big boxbrands have an advantage here in that they have marketplace name recognition. In otherwords, people will simply type their name into Google and land on their page.For smaller retailers, you’ll likely need to spend some cash to get your target customers to yoursite. The cost of acquiring a customer metrics, or CAC, reveals how much money you spendthroughout the acquisition funnel, from creating an ebook or promoting a post on Facebook,to having a visitor come to your site because of the ebook or promotion, all the way through totheir finding a product they like and finally checking out.The cost of customer acquisition is the amount of money you have to spend to get one customer.The lower the cost of acquisition, the better: i.e., you always want your cost of acquisition to godown. As a quick example, your CAC is 40 if you need to spend 200 to get five visitors to buyon your store.19
You may employ different techniques to bring in those visitors — SEO, paid ads, high-qualitycontent, social media — but all of them cost you either in terms of money or time.There are a lot of factors that affect your cost of customer acquisition, but it is important to getan accurate number here. As a best practice, you should always try to find marketing outletsthat lower your CAC valuation.Conversion RateOnce your store gets traffic, you need to see how many visitors are buying. Conversion ratereveals just that.Conversion rate is defined as the percentage of visitors who end up buying from your store. Thehigher the conversion rate, the better. When it comes to conversion rate, you always want it to begoing up. As a quick example, your conversion rate is 2% if 2 out of 100 visitors buy from your store.There are hundreds of articlesout there on how to improveconversion rates –– because itis just that important. There’s somuch emphasis on conversionYour shopping cart platform, ifit is fully integrated with yourrate because it directly affects yourmarketing solution, can generatebusiness’s bottom line. Regardlessyour conversion rate for you,of how much effort you spendon driving traffic to your store, ifmost visitors don’t end up buying,without needing to manually pullinformation from multiple sources.it’s all wasted. That said, it’s reallyimportant to make sure you know what your conversion rate is at all times and keep tabs onwhether it’s improving and if you should stay the course or not.20
Shopping Cart AbandonmentWhen your conversion rate is low, you need to understand how many visitors had an inclinationto buy. To do this, you’ll want to examine your store’s cart abandonment.This metric indicates the percentage of visitors who added products to their shopping cart butdid not complete the checkout process. The lower your cart abandonment rate, the better. Asa quick example, your shopping cart abandonment is 75% if 75 out of 100 visitors with a cartleave without buying.Cart abandonment is the closestyoucometoearningrealcustomers before they leave yoursite. Adding to the cart typicallyindicates an intent to purchase.The fact that they leave withoutbuying means you lost potentialcustomers. It gets especially badif you paid a lot of money to getTechnology is a critical part ofassessing your cart abandonmentmetrics. Your shopping cart platformshould be able to tell you thisinformation, so you can act on it.these visitors to your store. Making sure your cart abandonment is low is key to improving yourconversion rate.Average Order Value (AOV)You should monitor how much money each order brings in to see how much revenue you cangenerate. That’s what AOV tells you.This is the average size of an order on your store. The higher the average order value, the better.For example, your AOV is 35 per order if you made 140 from 4 orders.By monitoring AOV, you can figure out how much revenue you can generate from your current21
traffic and conversion rate. Being able to predict revenue is a big deal for any business. Ifmost of your orders are really small, that means you have to get a lot more people to buy inorder to achieve your target. It’s important to have at least a few high value orders so that youroverall average is on the higher side.ChurnIf your LTV is low, it could be that many of your customers buy once and never return. This ismeasured by what is referred to as “churn.”Churn is the percentage of your customers who do not come back to your site. The lower thechurn, the better. For example, a churn rate of 80% means 80 out of 100 customers do not comeback to buy from your store.As we have seen, to ensure a high profit, it’s important to influence your customers to keepcoming back to purchase. That means you want your churn to be low so that once you acquirea customer, they continue to come back and purchase again and again. Lower churn meanshigher LTV and a healthier business overall.Once you start measuring your ecommerce store performance and using data to drive yourbusiness decisions and strategies, you’ll be well on the way to enterprise-level success! Nobig box retailer takes action without measuring the impact and neither should you. Monitoryour metrics, pivot when and where necessary and make the most of your both your time andmoney in order to build a successful brand.22
ConclusionIn the current democratization of ecommerce, the barrier to entry has lowered. Technology ishere to help you grow, as long as you keep an eye to how it can help you scale in the long-term.It can help you ensure reliability and uptime, create a mobile solution, address online securityconcerns, and have a shipping and logistics strategy that can scale.And, more than just lowering the barrier to entry, technology has made it is easier than ever toscale as an ecommerce company and disrupt the big box brands. Smaller ecommerce companiesare more agile than larger brands and can meet consumers where they are, on a faster timeline.This adaptability is critical to the ability of your ecommerce company to grow and scale.23
See What Inbound MarketingCan Do for YouIncrease Revenue / Decrease Abandoned Carts / Increase Repeat Purchase RateHubSpot: The Industry Leading Inbound Marketing SoftwareSet it and forget it then measure and optimize, this is what Hubspot allows youto do for your business. Create email campaigns to generate lifetime value, usecontent to pull in new customers and measure every single click, form submissionand more.Request a Hubspot demoBigcommerce: The Cloud Platform for Fast-Growing BrandsBigger results with less hassles, that’s the Bigcommerce promise. With some of theworld’s fastest growing small and mid-sized brands quickly scaling to more than 1million in revenue, learn how our tools can help your business confidently grow.Request a Bigcommerce demo24
Level 1 is the most strict in terms of DSS requirements, where Level 4 is the least strict. Almost all small and medium sized businesses (SMBs) classify as the lower Level 3 or Level 4 merchant, however, this does not preclude the necessity to maintain compliance with the same diligence as larger organizations. In fact, it's a costly .
