Focus on SEO, Open Source to Boost Online Sales
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Online retailers looking to cut costs during a recession while still improving the online customer experience are advised to switch their e-commerce software to non-customized platforms and funnel the savings into functions such as search engine optimization (SEO), according to research released today by Gartner.
E-commerce firms should consider commercial, off-the-shelf, or open source software as a replacement for current custom Web development initiatives to save up to 35 per cent of their ongoing maintenance and license costs, according to the report "Cost Cutting in E-Commerce, 2009" by Gartner.
These savings can then be used to direct custom development efforts toward functions likely to have an impact on differentiating customers' online experience, such as SEO," says Gene Alvarez, research vice president at Gartner.
Except for market leaders, such as Amazon and eBay, custom development is likely to be a waste of effort and money because it supports functions that do not enable a differentiated online customer experience. For example, a developer who supports a commodity function, such as shopping cart management, would be better to develop rich Internet shopping capabilities or improve site design for search engine optimization so that the site can rank higher in a Google-based search, Alvarez said in a statement.
The report comes out at a time when other research groups are showing e-commerce sales are leveling off while e-tailers struggle with smaller budgets as they try to retain customers and improve the online shopping experience.
IT organizations responsible for e-commerce are challenged in 2009 to improve online customer experiences to make up for closed locations and lost sales personnel, while cutting IT expenditures by five to 25 percent, according to Gartner.
To that end, Gartner identified five tips for meeting that challenge for IT leaders in charge of e-commerce operations in the current souring economy. The report also outlines associated savings estimates for large enterprises with e-commerce budgets of more than $1 million for software and services, and for small enterprises with budgets of less than $1 million.
First on the list of suggestions is to use off-the-shelf products that are not custom developed for commodity functions, such as shopping cart management, search, product merchandising and management and to replace these with commercial or open-source e-commerce applications.
Gartner estimates that large enterprises can save 35 percent of ongoing maintenance and license costs, and small enterprises can save 25 percent of these costs in 2009, and 20 percent in the future. The one-time cost to implement this strategy is $250,000 to $350,000 in software, on average, with a one-time cost for implementation services, according to Garnter.
Next page: Seeking ROI.