State of the E-Commerce Shopping Cart Market

What does the shopping cart market look like these days? Let me describe it to you.

But first let me apologize for the term "shopping cart." Modern systems comprise entire sophisticated ordering and fulfillment systems. Others add full catalog and website management systems. But the term "shopping cart" still sticks in the industry vocabulary. In this document I'll be using it to refer to all e-commerce systems.

Four Types of Programs

I see four major types of e-commerce programs on the market. Of 223 apparently active shopping cart vendors I found:

• Licensed Standalone Stores (102)
• Hosted Ordering Systems (45)
• Hosted Store-Building Systems (65)
• Outsourced and Third-Party Order Handling Systems (11)

Licensed Standalone Stores comprise a lot of the solo developer designed carts. They usually have some kind of catalog-building system with dynamically generated pages. Most of the earlier carts were written in Perl; the newer ones prefer PHP, ASP, and ColdFusion that make it easier to tie into powerful databases.

Only a minority of the standalone carts seem under active development. Since the sales model is a one-time licensing fee, income may not be sufficient to pay for ongoing improvements. Two good indicators of active development are the presence of real-time UPS/FedEx/USPS shipping estimates in the software and a built-in affiliate program. Both are becoming common with the better systems.

Hosted applications come in three main varieties:

Hosted Ordering Systems handle all of the ordering activities, but usually require a merchant account for real-time credit card processing. Many of these are pretty minimal, but several are quite sophisticated and impressive. HTML order buttons for each product are generated by the hosted ordering system and are then pasted into product pages in the merchant's main website. For merchants with just a few products, one of these systems is all you need.

Hosted Store-Building Systems handle the ordering activities and add a content management system that builds template-generated product pages from the product database. Some of these are dynamically-generated on-the-fly pages that aren't very search engine friendly, but, increasingly, vendors are creating alternatives with static HTML webpages that can be easily indexed by search engine spiders.

Third-Party Order Handling Systems have come of age in the last several years. For small merchants obtaining a merchant credit card account and payment gateway can be expensive or impossible -- especially for international merchants. To the rescue come 2CheckOut, CCNow, Kagi, ClickBank, and PayPal. While PayPal is the least expensive by far, 2CheckOut has the advantage of low price as well as versatility. Since it can be installed with the same configuration as the popular Authorize.net payment gateway, merchants can employ any shopping cart program they like without having to handle the transaction themselves.

Outsourced E-Commerce is offered by a few systems that handle the entire e-commerce function. For companies that don't want to be bothered, this can be great. Outsourcing e-commerce is no doubt more widespread than I have shown, since nearly all fulfillment houses offer this kind of service.

Consolidations Are Minor

I was wrong about consolidations. Years ago I predicted that a massive consolidation of the shopping cart software market would take place, and recommended that developers stay with the better known, more successful carts. The consolidation did happen, but it certainly wasn't massive.

True, a number of the larger e-commerce applications have gone out of business (or been absorbed in an acquisition and then discontinued) such as Pandesic, iCat, Actra, Cartalog, eCongo, and Open Market. Of my list of 150 shopping carts from five years ago, nearly 60 are gone or renamed. Some shopping carts changed ownership, but little real consolidation took place, so far as I can see. Digital River is one of the larger consolidators, having acquired DigiBuy, FreeMerchant, and CCNow. EVS Holding Company has GoEMerchant and TriftEStore. One of the more significant e-commerce consolidators is eBay, which acquired PayPal, which is emerging as a key e-commerce payment alternative in a majority of the shopping carts I've seen. But, overall, consolidations seem relatively minor.

Lights Are On but Nobody's Home

I found a number of e-commerce sites that didn't look like they had been remodeled since the late 90s. Many sport copyright dates several years old, indication that the lights are on, but nobody is home -- that these sites haven't been actively tended for years. Some may be serving existing customers, but they've stopped marketing -- if they ever did.

Hosting Services and Solo Programmers

Many small cart vendors seem to be maintaining their carts and improving them. Many web hosting services have their own branded cart, though many of these haven't been improved for several years. Programmers, who wrote a shopping cart program a few years ago, still include it among other programs they're developing.

Rebranding

Several carts are rebranded and sold by resellers. For example, 1ShoppingCart is sold as 1AutomationWiz, KickStartCart.com, NetOffice Toolbox, and Professional Cart Solutions. Kurant StoreSense is sold through hosting services and other companies under a different name. JMS Online Systems offers several branded carts to web hosting services.

I'm Pretty Happy with What I See

I can remember the bad old days of e-commerce programs when a basic cart with rudimentary tax and shipping calculations was state-of-the-art. I am impressed with the latest generation of shopping cart/e-commerce programs. Merchants have a very fine selection of rather sophisticated carts to choose from. Bravo!