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Tech Change Ecommerce

How Could New Tech Change E-Commerce?

Staying abreast of tech developments is important for e-commerce store holders if they want to stay ahead of the curve. Any technology which reduces overheads improves store efficiency or improves customer service could potentially give early adopters a lead in the competitive e-commerce marketplace.

We look at three of the most exciting technologies to arrive on the scene over the last few years. We ask what application they might have for e-commerce and what challenges they present.

Cloud hosting: a scalable Pay-as-You-Go service

We start by looking at a relatively new technology that some e-commerce store providers are already using: cloud hosting. The benefits of cloud hosting are clear to see when you compare prices. Even a basic shared hosting platform for e-commerce is likely to cost at least $15 per month. For that, you will get a specified bandwidth limit.

Compare this to the pay-as-you-go model used by the big cloud providers. With the power of distributed computing resources behind it, you can focus on fulfilling orders without worrying about your site crashing. Configured correctly, your hosting will scale up to meet increased demand, temporarily increasing your hosting costs, and then scale back down again after the wave has passed. The overall cost can amount to as little as a few dollars a month. Payment is also taken in arrears which is an additional bonus in terms of cash flow control.

Technical hurdles

By hosting your e-commerce site with a big player like Google Cloud Platform, Microsoft Azure or AWS, cost reduction is virtually guaranteed. However, setting up and managing cloud hosting is not straightforward. Unless your IT department is familiar with cloud technology, it is easy to overprovision compute resource, choose the wrong type of storage or accidentally leave unused VMs spinning, costing you money.

Fortunately, help is available with experienced companies offering cloud migration solution services and managed e-commerce services. However, the costs of a managed service can be a little bit more than a standard e-commerce site host. You do tend to get top of the range support, security and performance management tools though (see the section on APMs below) and these companies will often handle all of the site migration too.

Application performance monitoring (APM)

An Achilles’ Heel of e-commerce stores has always been a dependency on third-party applications within its software stack. Apart from the main site vendor platforms (Amazon, eBay, etc.), these might include payment gateways, analytics tools, shipping modules, CRM software, social networks and more. Problems with any application or service within that stack can lead to a host of problems from slow page load times and page crashes to failed transactions.

Application Performance Monitoring software is designed to solve the problem by monitoring and recording all communications between the various components of the stack (e.g. API calls). By highlighting bottlenecks or failures, Application Performance Monitoring software can help system administrators to quickly perform root cause analyses and understand where dependencies are causing issues.

By using the data to optimize the technology stack, e-commerce store owners will be more capable of meeting performance standards and providing high-quality user experience.

Not only will this reduce the occurrence of abandoned transactions but the faster page load times will send out important search engine optimization (SEO) signals to Google, increasing the chances of high placement in search results pages.

Examples of Application Performance Monitoring software include AppDynamics, NewRelic, and Dynatrace. Some of the data collected by APM tools include bandwidth consumption, client CPU utilization, data throughput, and memory demands.

Of most use to the person making sense of the data is the provision of a single dashboard on which all relevant information is displayed. This is one advancement which really doesn’t have a downside.

Blockchain and cryptocurrency: e-commerce applications

Blockchain technology is perhaps the most fascinating of all of the new technologies likely to impact on e-commerce in the future. There are two main ways in which the blockchain might affect e-commerce site owners: reducing returns and overhauling online payments.

Returns are the bane of e-commerce site owners lives, adding up to hundreds of billions of dollars a year. Returns are driven on the one hand by poor quality products and, on the other, by fraudulent buyers. The blockchain could plug both of these holes.

In a nutshell, a blockchain is a decentralized ledger which all parties in a supply chain can access, in real-time, simultaneously. How will this help reduce the impact of returns? Imagine if one of your suppliers decides to change one of their suppliers and the quality of their product goes downhill. Instead of having to launch a lengthy investigation following a spike in returns, you could simply consult the blockchain, point out the details to your supplier and confirm liability. Likewise, with all buyer-seller transactions recorded on the blockchain, patterns of fraud can more easily be detected.

Blockchain tech first came to public attention due to BitCoin, the cryptocurrency which is both created, traded and secured using blockchain technology. Although BitCoin itself has struggled to become a mainstream currency, there is still a lot of work going on behind the scenes by big players. For example, Facebook’s secretive ‘Project Libra’ is thought to be researching the potential of a fiat-backed Facebook cryptocurrency. With its 2.4 billion strong user base, Facebook could well make waves if it launched a coin into the e-commerce marketplace.

A young, volatile technology

The main drawback of the blockchain is that, unlike the previous technologies, it has not matured yet. While the interest in its potential is very real, its eventual application to e-commerce can only be speculated upon.

As for cryptocurrencies, the initial hype over their importance has lulled and the world still awaits its emergence as a stable, mainstream alternative to existing currencies. There is certainly no urgent reason for e-commerce store owners to start looking into accepting crypto on their sites. Facebook themselves have only so far confirmed that they ‘have a team’ working on their digital coin project.

E-commerce is a competitive sector and this is only likely to intensify. Store owners should keep their eyes on developments in the three technologies featured in this article. They could one day soon hold the key to business success.


About the author

Ben Ferguson

Ben Ferguson is the Senior Network Architect and Vice President of Shamrock Consulting Group, the leader in technical procurement for telecommunications, AWS cost reduction, data communications, SD-WAN solutions provider, dark fiber procurement and cloud services.

Since his departure from Biochemical research in 2004, he has built core competencies around enterprise-wide area network architecture, high-density data center deployments, public and private cloud deployments, and Voice over IP telephony.

Ben has designed hundreds of wide-area networks for some of the largest companies in the world. When he takes the occasional break from designing networks, he enjoys surfing, golf, working out, trying new restaurants and spending time with his wife Linsey and his dog, Hamilton.

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