Are Online Retailers Also Tech Companies?
If you run an online store you might not consider your business as being a tech company. Truth is, there’s a strong argument to be made that you are actually running a tech company that also happens to sell products. After reading this article, maybe you’ll agree. In any case, it’ll give you something to think about.
What is a tech company?
What exactly constitutes a “tech company” is debatable. Some would argue that a tech company is only a company that sells technology. Others would argue that it could also be a company that aggressively incorporates technology into the running of the business or to gain advantage over competitors. These companies would not simply be using technology, but building the technology that they need to operate. “Building the technology” is the key point to this argument and is what makes all the difference.
Do online retailers actually build technology?
You bet they do, or at least some do. Many online retail platforms, the software running the website, allow for custom software development to add functionality to the platform or to integrate the platform with other software. This is where “building the technology” comes in. If you’re running an online store and you need some functionality or integration that doesn’t exist, it’s up to you to build it. If you’re now involved in building technology, wouldn’t that make you a tech company? I think so.
For online retailers that do build technology, it’s typically not a one-time practice. It’s something that’s planned for and budgeted into their annual operating costs. This is driven by a desire to automate systems, improve or replace pieces of functionality, prioritize cutting-edge technology, and just generally staying current technologically. These retailers realize that innovating features and functionality needs to be a priority because it can, among other reasons, mean happier customers and increased sales.
Are ALL online retailers technology companies?
No. Many smaller retailers get by using pre-built SaaS platforms such as Shopify or Wix. These platforms are plug-and-play, meaning you sign up for the service and can get started selling products quickly. There’s not a lot of “custom” that you can do with these platforms. Because you’re not able to innovate new software development, you’re not a tech company.
On the other hand, many platforms (specifically in the open source realm such as Drupal Commerce and Magento) give you complete control of your code. Utilizing an ecommerce platform like this allows for continuous innovation and all of the good things that come with it. If you do innovate and build on to your platform, I’d say you’re a technology company.
If you’re not innovating on your platform now and this article has made you curious, you might be wondering if your platform supports custom development? Do some research or talk to us to find out. If you're not able to do what you need with your current platform then you may need to replatform. Again, we can help you understand your options, or take a look at this article to help you get started.