What is CaaS (Commerce-As-A-Service) and How Can It Help E-commerce Businesses?
Commerce-as-a-Service is a natural development in the e-commerce world. It allows you to move your e-commerce data and computing into the cloud, making it portable and scalable whilst choosing the front-end of your choice.
This development will help e-commerce businesses to keep costs down whilst scaling their businesses. it also removes worries about security and hacking and moves some of the responsibility for PCI and GDPR compliance to the CaaS provider instead of you!
To see what a fantastic advance this is, let’s rewind the clock a little to look at how e-commerce sites were traditionally built.
You had two basic choices:
Self-hosted e-commerce sites are those which require the site owner to download software onto their servers and install a database to contain product, customer and ordering data.
They usually have a front-end (which has catalogue functionality that the customer uses to carry out their shopping/purchasing) and a back-end (used by the site owner to view stock, inventory, photography and customer orders.
Examples of self-hosted e-commerce platforms include Magento, Zen Cart, WooCommerce. These systems are often open source, meaning you can alter the code and customise it to your requirements. This is very advantageous for any e-commerce business that has any custom requirements. And in practice, once businesses grow to a certain size, they almost all have custom requirements.
One way of thinking about CaaS is as a headless e-commerce site.
Headless websites have been around for a while. Headless means that the data that drives your site (e.g., page content, categories, blog posts) is kept in a database as usual, but rather than being tightly interwoven with the website, the data is pushed and pulled via an API.
This means the data can be completely abstracted from the website, meaning developers are free to write their own front-end systems whilst still retaining the advantages of a site-owner-friendly admin system.
This website (dotwise.uk) is a headless website, which uses WordPress as the CMS but the front-end is not WordPress, it’s all custom code.
Hosted e-commerce sites don’t offer as much code customisation but they do away with the need to manage and host your own website. The e-commerce platform provides all that for you, keeping your software fully up-to-date with all the latest updates and security installed automatically for you. This leaves you free to concentrate on scaling and growing your business.
Commerce-as-a-Service, however, brings these two models closer together, combining the advantages of each.
With CaaS, your e-commerce data and e-commerce computing moves to “the cloud”, whilst your front-end software remains your responsibility.
So, you would be responsible for installing, designing, acnd maintaining your front-end website.
But your product data, inventory management, customer data and all other data is stored safely and securely by your CaaS provider, in the cloud.
Here are the advantages:
Flexibility and portability
Most of the product data is stored offsite on the CaaS servers.
You could completely change the front-end, even change which language it was written in, if you needed to.
Migrating from e-commerce platform to another e-commerce platform has in the past been an extremely painful process involving translating incompatible data from one format to another and rewriting all your software. CaaS makes migrations much simpler by keeping the data and the front-end separate. With CaaS you can (in theory) plug your data into a new website with a few mouse clicks and get a new site running quickly.
One great example is WordPress. Thousands of businesses love WordPress and have built their websites on it. But there were few choices when it came to e-commerce (WooCommerce is the biggest player). With CaaS you have the opportunity to keep what you love about WordPress but decouple the e-commerce functionality, freeing you from the constraints of using big e-commerce plugins such as WooCommerce.
Store customer data off your CMS and with the CaaS provider. Whereas with self-hosted e-commerce you are responsible for the security of your customer data. This is a huge responsibility and cannot be taken lightly.
If you take card payments on your site then you will also be faced with PCI compliance which can be cumbersome to impleement and maintain.
In CaaS, security issues around customer data and card data are handed off to your CaaS supplier, relieving you of the burden of keeping the data secure.
With self-hosted e-commerce, scalability can be an issue. Once your site outgrows its hosting environment you may have to move it (big hassle) or scale up your hosting. Also your hosting environment will normally need to be robust enough to cope with any spikes and seasonality. Usually it’s the database that is the speed bottleneck in your web hosting environment. Once you take the database out of the equation, scalability and spike management become much less of an issue.
Inter-connectivity and multi-channel inventory management
Almost all e-commerce operations are multi-channel. This means that the vendor sells through their own website plus online platforms such as eBay, Amazon, Not on the High Street (more). This can be a headache when it comes to stock inventory management. If you sell an item on eBay then your website stock must be decremented accordingly. Similarly when a product is returned by the customer and goes back into stock, the inventory must be incremented again and the item made available on all the selling channels. That’s a lot of data flowing back and forth and can be a huge headache for e-commerce businesses.
With CaaS, your data is moved to the cloud and it can be the responsibility of the CaaS provider to provide the connectivity between all the different platforms and channels.
Free up your server resources and move all commerce based operations to the CaaS provider, improving your site speeds. Since your database is very often the cause of speed bottlenecks on e-commerce sites, this means you could run a much faster website at a lower cost.
Easily create micro-sites to test new sales routes, markets, etc.
Headless commerce can be a great solution for most businesses, but it is always advisable to ensure the CaaS provider meets all of your requirements. Some instances which may create a roadblock are sites which support with multiple vendors (such as peer-to-peer selling sites and multi-vendor marketplaces), and possibly subscription/membership based sites.
Building a scalable e-commerce platform and fulfilment operation
When combined with other -as-a-service services such as outsourced multi-channel fulfilment (stock storage, order picking, packing and despatch) such as that provided by multi-channel fulfilment companies like Huboo. And scalable cloud-hosting such as that provided by AWS, Azure or Google, plus CDNs such as CloudFlare, you can build an extremely fast, scalable, secure e-commerce operation without actually touching any stock.