April 16, 2015

E-Commerce Agility 2015

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Download the report: http://www.l2inc.com/research/e-commerce-agility

Agility, or the ability to respond rapidly to innovations in the digital realm, may be what separates winners from losers in the e-commerce wars. And platform choices play a key role.

Cloud and in-house solutions each represent 26 percent of the 82 brands examined in L2’s Intelligence Report: E-Commerce Agility. On-premise, or third party licensed software, installed on a customer’s server and maintained by the customer’s IT department, comprise 48 percent.

Cloud solutions often result in a more robust response to marketplace shifts, however data and security issues are a concern.

While considered more secure, On-premise platforms have challenges, as the initial site build-out is customized and can lock a business into practices that may become dated.

With adequate management and capital support, in-house platforms can offer a competitive advantage. However, costs continue to rise as they compete with third-party solutions that often access financial markets to fund robust product development.

The analogy here would be an F-1 car, a superior car if you can afford to build and maintain. The question is, would you be better off with a $150K Porsche that has 90% of the performance and is easier to maintain? Companies are grappling with this as the benchmark for what should be in-house continues to rise.

There appears to be a link to financial performance and site rankings. L2 data indicates cloud brands, on average, enjoy the greatest sales and earnings growth, and higher overall site rankings, driven by Innovation and Content, Customer Service, and Search.

This study looks at 82 brands across six sectors and examines their degrees of agility. Members can download the full report at L2inc.com.

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