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18 May 2010

Outdated technology holds back e-commerce 2.0

40 per cent of online shops stuck in modernisation backlog

E-commerce faces a technological generation change

E-shops no longer satisfy customer expectations    
Over the past ten years, four out of ten online shops have barely advanced technically – although customers have. They no longer expect a simple product show, but want to be part of the e-commerce community themselves. E-shops are often insufficiently prepared for new business models like social commerce. Only a small number have exploited the technical possibilities and established themselves as truly interactive shops. These are the results of an e-shop survey conducted by novomind, who asked 200 decision makers in the e-commerce industry.

Many new business models fail due to outdated technology    
Sixty per cent of online retailers want to modernise this year, for example through investing in additional Web 2.0 functions. However, it is often their technology that holds them back. Many online shops have evolved over the years, only developing as and when new technological building blocks become available. However, sophisticated interactive functions such as configuring custom products, and virtual changing rooms in fashion stores, are often no longer possible using technology from the early days of e-commerce. Either that or they don’t make financial sense – upgrading whole IT systems requires considerable investment in reprogramming and new servers.

New e-shop concepts an advantage
That’s where providers of Facebook-generation shop concepts are gaining ground. E-shop systems that were developed in the Web 2.0 era already contain all the components for retail in the social media age. At the same time they employ today’s widespread standards, such as powerful 64-bit technology. The survey shows that the newer the technology, the more successful the online retailer. Nine out of ten operators of Internet shops that went live in 2007 or later consider their shop sales successful or very successful. By comparison, e-shops that started before 2002, and that are still largely based on technology dating from that time, satisfy only 72 per cent of their managers.

Background information    
The study entitled “Technical and business evolution of e-shops” is based on a CATI survey (Computer-Assisted Telephone Interview). On behalf of novomind AG, a total of 200 decision makers working in the IT area of online shops were asked in November 2009 about the functions that are used or planned in their e-shops. The survey also examined a cross-section of 15 German-language e-shops whose shop systems have been relaunched during the past 12 months.

novomind AG:

Since 1999, Hamburg company novomind has been developing innovative e-business solutions for the modern Internet world in four e-business disciplines: e-commerce (e-shops and zoom server), ePDM (electronic product management), e-marketplace (marketplace integration) and e-communication (solutions for contact and service centres).

novomind is a European technology leader in every service segment and covers the whole digital value-adding chain in retail and electronic customer communication. The Hamburg-based software house is the fastest growing company in the fields of electronic customer communication and mail management.

novomind also provides comprehensive consultancy services for people choosing a suitable IT system for e-commerce. Established licence software like IBM WebSphere Commerce Server and INTERSHOP ENFINITY is considered, as are custom-made novomind solutions based on novomind iSHOP.
novomind AG is currently assisting more than 80 companies including Citibank, Der Club Bertelsmann, Deutsche Rentenversicherung Bund, Ernsting’s family, EnBW, gebrüder götz, OTTO and QVC.