March 03, 2014, 3:19 PM — In 2012, French cosmetics company Clarins launched an e-commerce site in China, aiming to grow its global revenue in an expanding Chinese consumer market. Before, the company had sold its lotions and potions in China through other outlets.
Now the trick was to stay true to its global brand identity while creating a website tailored for Chinese customers, says Laurent Malaveille, executive vice president for global digital, CRM and e-commerce.
A cloud-based e-commerce platform helps meet that business goal, Malaveille says, because Clarins can effectively outsource the day-to-day technical operation of the system. This leaves the e-commerce group time to focus on the features that are key to Clarins' success in online sales, such as its loyalty program. The Chinese site saw double-digit sales growth in the first six months after launch.
Clarins now runs 12 e-commerce sites globally, each customized for local tastes and run on a software-as-a-service (SaaS) e-commerce platform from Demandware. Clarins signed up to use Demandware in late 2010 and dropped IBM's WebSphere e-commerce software.
Clarins wanted to move quickly into many international markets without having to add a lot of IT staff to handle the expansion--or the upgrade projects that traditional on-premise, licensed software would eventually require, Malaveille says.
Another factor in Clarins' decision to go with SaaS was that, as a cloud offering, it can easily handle the company's traffic surges during holidays and promotions. A SaaS architecture can rapidly scale as the company launches new country-specific websites, Malaveille says.
Clarins can take advantage of new features on a rolling basis, as Demandware makes them available, without undergoing a major upgrade project, he says. As a result, Clarins can expand e-commerce activities without having to add staff for maintenance.
Cloud computing expands the possibilities for configuring e-commerce, says Peter Sheldon, an analyst at Forrester. Retailers typically choose among four options: SaaS, on-premise, on-demand or hosted software.
In the on-demand setup, a retailer has a dedicated instance of an application that is hosted in the cloud. There are no automatic upgrades, but companies can customize the software and integrate it with back-end systems, Sheldon says. In a hosted setup, a third party manages the software but the retailer usually owns it.
For Clarins, choosing to go the SaaS route means upgrades and new features can be delivered automatically--a key selling point for many retailers, Sheldon says. "You never have to worry about being on a legacy version," he says.
An important reason for choosing Demandware, Malaveille says, was that Clarins can build and integrate custom features. For example, the company developed its own point-based customer rewards system, "We didn't want to be trapped into one set of functions," he says. Using SaaS "has empowered our [IT] team to run our business in a more dynamic way."
Read more about e-commerce in CIO's E-commerce Drilldown.