Sep 29, 2015
The e-commerce systems used in Finland can be divided into three categories: 1) the systems employed by small e-stores; 2) content management systems with built-in e-commerce features; and 3) the systems used in large, highly integrated e-stores.
The smallest e-store setups are basically websites that showcase products costing up to a few hundred euros. The other end of the scale, in turn, features multi-million euro projects that involve a lot of work on backend systems and delivery chain, in addition to the actual e-store.
The price range of customer-facing parts in an e-store project typically reaches from a few thousand up to tens of thousands of euros. There is, however, considerable price fluctuation in this relatively immature market.
In large undertakings, where the costs may well run up to hundreds of thousands of euros, the bulk of work is often comprised of various system integrations, such as CRM, ERP and product information management. It is also worth noting that the systems mentioned in this review are specialized in implementing very different types of e-store concepts.
1) Systems employed by small e-stores
The e-commerce systems used in small e-stores in Finland include Kotisivukone, MyCashFlow, WooCommerce by WordPress, and Magento. There are also plenty of other systems with smaller market shares, such as the platform based on ePages by Vilkas, Prestashop or the osCommerce system.
The market for e-commerce systems aimed at small businesses has been severely fragmented for a long time. WordPress and, consequently, WooCommerce have been gaining some popularity in Finland during the past few years, and Magento has also become more visible on the market. Still, the number of options is overwhelming for anyone aspiring to set up a small e-store.
In addition to WordPress and Magento, the more established players on the market include the previously mentioned MyCashFlow, Kotisivukone and Vilkas. Projects budgeted under 30,000€ and aimed specifically at setting up a traditional, product-based e-store will usually go for these platforms. Typically with small, “classic” e-store sites, the product offering makes up the bulk of the content, the catalogue contains up to a few hundreds of items, and the system requirements often include catalogue and customer record management.
Kotisivukone is the simplest solution among the platforms mentioned above, making it possible to run a very basic e-store with annual operating costs as low as a few hundred euros. The solutions by Vilkas and MyCashFlow also come with a very reasonable price tag.
Projects with Magento and WordPress WooCommerce tend to be somewhat more costly – often upwards of 15,000€ – but in return they offer, for instance, a significantly wider range of customization options for the look and feel of the store. Magento projects also typically provide integration into a back-end system, such as fetching the pricing information from an ERP system.
2) Content management systems with built-in e-commerce features
Another significant category covers content management systems that include e-store features as a part of the whole solution. The most common ones in Finland are Kotisivukone, WordPress (with the WooCommerce features), Drupal (with the Drupal Commerce platform) and EPiServer (with the EPiServer Commerce platform).
The upside with content management solutions is that they provide a single system capable of managing a diverse website. This way the e-store can be a just a part of a larger site, and e-store products can even be listed and featured on the front page, just like any other content. The e-commerce features in content management systems have actually been designed with this type of services in mind, and they are especially well suited for brand stores (such as Suunto.com or Novitaknits.com).
As a rule, the more seamlessly the e-store and other content need to be integrated, the better it is to get the e-store features from the vendor providing the content management system. Kotisivukone is designed for the very simple needs of smaller SMBs. WooCommerce by WordPress is also a somewhat lightweight e-store offering, but it can be expanded with add-ons to meet more demanding needs. WordPress projects that include WooCommerce in a significant role typically cost between 20,000 and 40,000 euros.
Drupal and EPiServer usually compete for the larger online service and e-store projects, where the costs typically range from 50,000 to 300,000 euros.
There are, however, some e-store requirements that the e-commerce features of content management systems cannot meet. Their limitations usually become evident in very large e-stores, where the catalogues can contain tens of thousands of products and pricing is very dynamic and customer-specific.
3) E-commerce systems used in large, highly integrated e-stores
The third category contains the e-commerce systems used in large, highly integrated e-stores. These systems are primarily designed to meet the needs of large-scale retail businesses and B2B e-stores. The catalogues in these systems can contain hundreds of thousands of items, with product and stock balance information stored in tens of different backend systems. Payment and delivery processes are also often tightly integrated into other systems.
In Finland, the biggest players in this league are hybris, IBM WebSphere Commerce and Magento. The first two are especially heavy-duty systems, and their implementation costs invariably amount to hundreds of thousands of euros. Magento is still mainly for smaller use cases than IBM and hybris, but it is steadily gaining market share also in bigger use cases.
Many of the products in this category also contain several other features besides those needed to run an e-store. For example, the competitive assets in hybris systems include features for product information management and high-quality interfaces that make it possible to extend the e-store to various channels. IBM WebSphere is often integrated into other IBM product bundles, containing features such as marketing automation and analytics. These heavyweight systems clearly belong to a category of their own, and they are typically employed only in very large and complex e-stores.
Especially the e-store projects falling into this third category often involve several different backend systems and even changes to the organization structure in order to implement the desired e-commerce service.
It is typical for many large organizations to use this type of heavy e-commerce system to build, for example, a B2B e-store or a web shop for spare parts, whereas commercial consumer site implementations tend to utilize e-store features embedded in content management systems.
If the implementation project is large and demanding, an e-commerce system can also be used purely as a backend system (e.g. hybris), in which case another platform (e.g. Drupal, EPiServer, Sitecore) will handle the customer-facing service, content and user experience. In such projects, the implementation costs will easily climb to hundreds of thousands of euros, possibly even over a million.
From the buyer’s point of view, the e-commerce system market is a real jungle.
The diverse market is challenging for any buyer, from a large e-store to a tiny web boutique. The options abound, but high-quality comparative data is scarce. The costs can vary significantly between different systems and partners.
There are several good options out there, but it’s difficult to separate wheat from chaff. The competition between the systems has been quite harsh for the past few years and there are no signs of it slowing down – quite the opposite.
We hope that this review will help in bringing some method to the madness.