Why SaaS Isn’t Enough to Grow an Ecommerce Business

October 12, 2022 |
Reading Time: 5 minutes
5 disadvantages of saas ecommerce

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.

Although SaaS improves or facilitates many aspects of running an ecommerce business, SaaS alone is not ideal for profitably scaling an ecommerce business. Continuous improvement to the performance of your ecommerce business will take continuous innovation and investment that SaaS alone cannot provide.

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 omnichannel infrastructure allow our brands to have the best of both worlds.

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, however, is one of the pillars of our success and the success of our clients under the Nogin banner.

Each brand operating on our Nogin commerce platform is plugged into our Luminate network, which tests, analyzes, and deploys superior ecommerce tactics based on the best strategies across our brands which amass over $1 billion in annual Gross Merchandise Value (GMV). Big retailers like Amazon dominate the ecommerce market due to their commitment and investment in R&D to reveal how to serve their customers better and drive higher conversions.

SaaS alone will never give the insights needed for independent ecommerce brands to scale their business. Our Luminate network offers enterprise-level research and development capabilities to help our brands improve their P&L and scale their business.

5. Scalability

SaaS, like all technology, constantly evolves. As businesses need to scale up their capabilities as they grow, they may need to update their SaaS or employ new staff to manage, operate, and utilize their expensive licensed tech. 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: