What is Cloud Commerce?
Cloud commerce, also known as cloud-based e-commerce, refers to the use of cloud-based technology to manage and scale data storage, hosting, and digital commerce applications. This includes various functions such as virtual payments, inventory management, and product information management, which are all managed through cloud-based systems. By leveraging the cloud, businesses can access greater scalability, flexibility, and security, enabling them to adapt to changing market conditions and rapidly expand their operations.
Cloud commerce is rapidly becoming the preferred option for businesses looking to improve their e-commerce capabilities, and it has become an essential component of digital transformation in the e-commerce industry. Organizations worldwide are spending more on cloud year by year. Synergy Research Group reports that the spend on cloud infrastructure services jumped 39% in Q2 2019 compared to the year before. From the organizations using cloud services, more than 75% say they have a cloud-first strategy, according to Gartner. And judging from the ongoing success of commerce cloud providers such as commercetools, commerce via the cloud grows sidelong. 88% of U.S.-based online retailers are currently re-platforming or expect to do so within the next two years.
But blindly following the competition never gets you the lead position. Why do companies take their e-commerce to the cloud?
Benefits of cloud commerce
The benefits for cloud apply for cloud commerce as well: scale capacity, easily cope with spikes, plug-and-play of new functionality and reduced complexity. As customer expectations rise, so does the need for a flexible solution that quickly enables new digital channels and specific services.
Cloud commerce meets these demands with the following benefits:
1. Speed of deployment
Compared to classic on-premise software, a cloud-based application can be quickly changed or upgraded. Building new functionality does not have to wait on never-ending discussions since there is no need to plan, procure, and install. Cloud commerce solutions can be deployed extremely quickly, which significantly reduces your time-to-market.
2. Enabling experimentation
From prototype to proof-of-concept, to MVP and the newest product in the market, the cloud enables you to experiment. Quickly turning ideas into applications that are further improved by iterations is crucial for digital success today. Experimentation gives you those valuable insights into customers’ behaviors fast and lean.
3. Everything as a service
Cloud applications typically come with an API. Simply by connecting input and output you can start using external data for entirely new use cases. For example, finding the corresponding street name to a postal code, payment options, logistical services, complete or filters assortments of retailers such as Walmart and BestBuy become easily available. And this goes, of course, in two ways: you can expose your own data to your users and customers to benefit from a network effect.
Compared to on-premise, the cloud offers less control. But control does not equal security, and cloud is generally considered to be more secure. The main reasons are greater technical expertise at the cloud provider, physical separation which makes physical attack far less likely, fewer vulnerabilities that are quicker fixed, better resiliency against unexpected catastrophes and newer technology.
5. Quick start
A credit card and some basic user credentials are really all that you need to start using a cloud service. There is usually a free test period to get to know the system. That’s a whole different experience compared to the process of acquiring and implementing an on-premises e-commerce solution.
Cloud Commerce to boost digital growth
In practice, choosing for commerce cloud changes many things. Speed, security, availability and reliability of your commerce are simply covered by your cloud vendor. Extreme spikes in sales due to seasonal traffic or successful promotions can be automatically scaled. Your digital marketing teams can get creative as new offers, promotions and even workflows can be easily implemented. Commerce teams can first try out an idea and check its suitability before having to work out every detail. Developers can start small, test and learn from the customer feedback and then scale very fast. New technologies, such as voice commerce and VR shopping can be tested without risking to impact your whole commerce infrastructure.
The cloud becomes the fabric on which your digital commerce platform is built, operated and grown. And that step brings you within range of completely transforming your organization.
The stepping stone to digital transformation
Bringing your commerce in the cloud shifts your focus from running business applications to running the business. Instead of re-inventing the wheel every day as new channels and business requirements emerge, you can drive innovation and focus on creating value for your customers. The main reason? The business agility of your organization increases. As technological and consumer trends speed up, organizations need to step up their IT and ability to respond to change.
IT is the main threshold that keeps the organization behind from reaching digital maturity. Typically, this happens in the shape of legacy or monolith software that takes a lot of time and attention to update and scale. Keeping IT in your control made sense in the time when technological advancements meant clear business benefits. But today, exactly because cloud enables rapid innovation and deployment for everybody, you’ll have to focus completely on how your business matches the customer’s needs. 24/7, omnichannel, personalized and relevant. Exactly what cloud commerce offers you now.