Victoria’s Secret Opts for On-demand E-commerce Solutions
It’s a sure sign of changing times when a $1.3 billion direct-to-customer, multichannel business decides to switch to a software-as-a-service platform. Victoria’s Secret has announced that it intends to do just that by the end of 2007, using a platform developed by n2N Commerce, the e-commerce group spun off from Limited Brands (not coincidentally, the parent company of Victoria’s Secret).
Many on-demand solutions currently available are less than three years old, and they are catching on fast. Several years ago you needed a large capital outlay to redesign and maintain a Web site. Back when the application service provider model first appeared, the marketplace wasn’t quite ready for it in many ways. People still felt they could build an e-commerce solution cheaper and more efficiently in-house.
Companies find it harder to keep up with the rapid changes today, and it’s tougher to find and pay for people with the type of skill set to keep a system running. It’s a question of “Should I invest my money in purchasing a system, and then have to have to hire the staff and pay them as well to maintain the system, or is my time better spent focusing on core of business?” Lots of companies will happily pay someone else for that service.
This on-demand or software as a service solution means you no longer have to have that large capital outlay; there are lower up-front costs to get you into the model and up and running. Many of the on-demand models are based on a monthly or annual percent of revenue. No longer does a multichannel retailer have to build the e-commerce solution from scratch. Some of today’s on-demand solutions are customizable and are providing the type of functionality that traditionally had to be built from scratch or purchased and integrated into one’s own e-commerce solution.
The big news related to the n2N model is the scale involved. Prior to this, only small- to medium-sized companies have used on-demand solutions. N2N’s goal is to be the first cross-channel, on-demand, e-commerce software solution designed for large multichannel retailers. It has partnered with several e-commerce technology companies who will help develop applications: Allurent, Demandware (which is already used by Gardener’s Supply and Vermont Teddy Bear), and ChoiceStream.