The evolution of ecommerce has accelerated during the 2020s due to the global pandemic and a dramatic shift in consumer shopping habits. As the competition between ecommerce brands intensifies, retailers try to find new ways to reach customers and compete with Amazon and other big retailers.
Many brands believe the best way to elevate their storefront and brand experience is through SaaS solutions. Salesforce helps brands improve customer acquisition and craft better customer journeys and conversion funnels. BigCommerce is an ecommerce business platform ideal for SMBs looking to build a simple ecommerce website without expensive developer support quickly.
While SaaS improves or facilitates many aspects of running an ecommerce business, relying solely on SaaS is not the best approach for profitably scaling an ecommerce business. Achieving sustained growth and performance enhancement requires continuous innovation and investment that SaaS alone cannot deliver. For insights on effective strategies, exploring a direct-to-consumer marketing approach can be invaluable.
Let’s dive into SaaS solutions, the disadvantages of SaaS by itself, and why Commerce-as-a-Service (CaaS) is the superior approach to running an ecommerce business.
What are Ecommerce SaaS Solutions?
Software-as-a-Service (SaaS) platforms are subscription-based services enabling merchants to access cloud-based applications. Whether it’s applications to improve product page optimization, facilitate 3PL ecommerce fulfillment, or platforms to host a website, SaaS solutions help brands elevate their ecommerce business.
There is explosive growth in ecommerce SaaS solutions, and the multi-billion dollar industry has a variety of providers, including:
- Oracle
- Salesforce
- Mulesoft
- Akamai
- Adobe Commerce
5 Disadvantages of SaaS Ecommerce Solutions and Why CaaS is the Better Approach
Every ecommerce business needs to use SaaS technology. Unfortunately, SaaS alone is not enough to run an ecommerce operation, and licensing SaaS on your own can lead to some time-consuming, expensive, and frustrating issues. Let’s discuss some of the common pitfalls of SaaS and why Commerce-as-a-Service (CaaS) is the superior way to scale an ecommerce business profitably.
1. Inflexible
The most significant advantage of many SaaS platforms is also their biggest disadvantage. Ecommerce brands can create a website utilizing intuitive, prebuilt templates. Although brands can quickly launch a store, there isn’t much room to customize your store outside the pre-configured capabilities and templates. Development teams cannot modify the core SaaS functionality and code to create a unique shopping experience ideal to a brand’s vision.
CaaS offers the capabilities of enterprise-level SaaS and the flexibility to modify your store. Our intelligent commerce platform and focus on retail innovation empower brands to adapt swiftly to changing consumer behaviors and market demands, ensuring they remain competitive in the ever-evolving ecommerce landscape.
Our smart tech and commerce suite supercharge our brands’ ecommerce stores with the latest SaaS upgrades instantaneously deployed through our Nogin commerce platform. You’ll never have to worry about updating your website with the newest technology to compete with big retailers again! At the same time, you can easily modify frontend or backend elements to align with your ecommerce goals and aesthetic.
2. Expensive
It’s tough to stay ahead of the technology and innovation needed to deliver a world-class ecommerce site. Many independent brands struggle to find a profitable path to license the SaaS they need and hire the support required to utilize the expensive tech.
Nogin offers a value-based pricing model to provide our clients with the SaaS, tech integrations, and resources they need to deliver an enterprise-level experience without the upfront costs.
We’ll handle the heavy lifting to implement and elevate your ecommerce business on our platform. Upgrades and optimizations are deployed across our brand network so you can finally access the SaaS you need without spending a fortune.
3. Customer Data Protection
One of the top concerns for ecommerce businesses is SaaS security. User data is often stored offsite, and cybercriminals can target the data centers. Staff and vendors may access SaaS services on outside connections and unsecured endpoint devices, which leaves customer data vulnerable to attack. In fact, 58% of world technology leaders in an Archive360 and Pulse survey state that SaaS vendors do not meet their security requirements.
Nogin’s platform has built-in enterprise-grade security, speed, uptime, and hosting. We offer native security protection, payments, information, applications, and external threat protection. We also comply with all data protection regulations, such as GDPR. Our platform also has advanced EDI software integration to process ecommerce transactions securely.
4. Research and Development
SaaS alone doesn’t begin to cover what an ecommerce brand will need to grow. Our vision from day one was to create an innovative new approach to ecommerce that would provide our clients with everything they need to future-proof their businesses. Nogin delivers a fast, low-cost, and efficient setup on our commerce platform.
Our clients access the cross-channel capabilities they need to serve and reach their customers. Enhanced by predictive analytics and intelligent algorithms, our brands can supercharge their business to improve conversions and exceed their ecommerce KPI goals. Continuous research and development is one of the pillars of our success and the growth of our clients under the Nogin banner.
Brands on our CaaS platform leverage the power of our Luminate theme, a comprehensive technology stack pre-integrated with the best Shopify apps along with partner integrations and exclusive features developed specifically for Intelligent Commerce. Our dedicated site optimizers are constantly working to improve each application, leveraging tactics gained from managing over 150 brands and $1 billion in total gross merchandise value (GMV) over the past decade. Big retailers, such as Amazon, dominate the ecommerce market because they are committed to investing in research and development. This allows them to discover new ways to better serve their customers and increase their sales.
Relying solely on SaaS will not provide the necessary insights for you to grow successfully. With our Luminate theme, we offer clients a practical method for conducting research and development, allowing them to improve their profit and loss statement and offer a better online shopping experience.
5. Scalability
SaaS, like all technology, constantly evolves. As businesses scale and grow, they may need to update their SaaS or hire new staff to manage, operate, and utilize their licensed tech. To streamline this process and enhance overall efficiency, implementing data-driven marketing can offer deeper insights and more effective solutions, reducing the complexities associated with scaling. They may start to see success as orders increase, but as they gain new customers, they will need to find more support and SaaS solutions to help their business grow. Unfortunately, the complexity and implementation of team management and SaaS deployment will likely create new challenges and eat into profit margins.
CaaS solves the common scalability challenges ecommerce brands face. Our clients can migrate to our Nogin commerce platform in a fraction of the time of traditional enterprise-level business platforms. Once they are on, they never have to worry about replatforming or backend management.
As our team launches new innovations and features on our commerce platform, the new capabilities are automatically deployed to your brand, so you’ll never have to worry about outdated tech again. Our value-based pricing also allows brands to access the tech, resources, and support they need to scale their business without risky upfront costs.
If Running an Ecommerce on Your Own is Becoming a Major Headache, You Don’t Need Aspirin: You Need Nogin
Access the SaaS you need and much more with Nogin. Our tech is just part of what makes CaaS the superior ecommerce solution for independent brands. Dive into the research behind CaaS and check out the Coresight Research Reports below:
- Part One: Evolving State of Ecommerce
- Part Two: Solving Profitability Issues in Ecommerce
- Part Three: Optimizing Ecommerce Infrastructure
SaaS in eCommerce FAQ
What is SaaS in eCommerce?
SaaS (Software-as-a-Service) in eCommerce refers to cloud-based applications provided on a subscription basis that help online businesses manage various aspects of their operations. Examples include platforms for building eCommerce websites, managing customer relationships, and optimizing product listings.
What is the difference between PaaS and SaaS eCommerce?
PaaS (Platform-as-a-Service) provides a platform allowing customers to develop, run, and manage applications without the complexity of building and maintaining the underlying infrastructure. SaaS, on the other hand, delivers ready-to-use software over the internet. In eCommerce, SaaS might be a complete eCommerce solution like Shopify, whereas PaaS might provide a platform for developing custom eCommerce applications.
What are some examples of SaaS?
Examples of SaaS include Salesforce (CRM), BigCommerce (eCommerce platform), Google Workspace (productivity tools), and Adobe Creative Cloud (creative software).
What is the SaaS strategy?
The SaaS strategy involves providing software solutions on a subscription basis, focusing on ease of access, scalability, and continuous updates. SaaS companies aim to deliver high-value features, maintain robust security, and provide excellent customer support to retain subscribers.
What type of business is SaaS?
SaaS businesses provide cloud-based software solutions accessible via the internet. They charge customers on a subscription basis, often offering various pricing tiers based on features, usage, or number of users.
How do SaaS products work?
SaaS products work by hosting the software on remote servers, which users access via the internet. Customers pay a subscription fee for access, and the SaaS provider manages software updates, security, and infrastructure.
Is Shopify a SaaS or PaaS?
Shopify is a SaaS platform. It provides ready-to-use eCommerce solutions, enabling users to create and manage online stores without needing to develop custom applications.
How does a SaaS make money?
SaaS companies make money through subscription fees. Customers pay monthly or annually to access the software. Additional revenue streams may include premium features, add-ons, and usage-based pricing.
What is SaaS for beginners?
SaaS for beginners refers to user-friendly, cloud-based software solutions that require minimal technical expertise to use. These services are designed to be easily accessible, often with intuitive interfaces and comprehensive support resources.
What are the disadvantages of Shopify?
Disadvantages of Shopify include limited customization options compared to self-hosted solutions, transaction fees unless using Shopify Payments, and potential challenges with scaling for very large or complex businesses. Some users may also find the costs for additional apps and themes to be high.
