In 2025, 92% of ecommerce businesses will prioritize cost savings — but only a few will unlock the full potential of innovation by addressing their tech stack’s total cost of ownership (TCO). 

The tables are set for a big innovation leap this year, with technology to transform your ecommerce business, like:

• Generative AI to streamline marketing efforts 
• Agentic AI — AI that works on its own, without human prompting — to improve ERP software and supply chain management 
• Augmented reality (AR), virtual reality (VR), and machine learning to prioritize and personalize the mobile shopping experience

If you’re not set up to capitalize on this new technology, your ecommerce brand risks falling behind. Often, it’s that big tech stack price tag — your TCO — that stands in the way.

The best way to optimize your budget without sacrificing innovation? Lower the TCO of your ecommerce tech stack. Reducing TCO frees up resources and ensures your business stays agile enough to invest in innovations that will define your brand in 2025 and beyond.

That makes TCO more than a cost-savings benefit — it’s a competitive advantage.

Here’s how to make it happen.

Why TCO will be a critical metric for ecommerce leaders in 2025

Ecommerce businesses are walking into 2025 with some baggage. Tech sprawl — the addition of more and more technology without easy integration — still plagues ecommerce brands. As tech stacks grow, tech sprawl becomes a bigger problem for both budget and efficiency.

According to Forrester’s Q2 2024 Tech Pulse Survey, 77% of US technology decision-makers report moderate to extensive levels of technology sprawl. It’s not just the source of IT’s nightmares — sprawl shrinks tight budgets and makes it harder to adapt to new technologies as they come. You can liken it to turning a cruise ship when your competitor is in a speed boat. 

McKinsey highlights that “Traditionally, tech infrastructure has been seen as an issue for ‘IT to manage,’ but technology has become so foundational to a company’s ability to compete that top companies now treat it as a source of strategic advantage.” For businesses that want to stay ahead, treating tech infrastructure as a strategic asset — rather than a cost center — is no longer optional.

Mark Adams, GM and SVP EMEA at BigCommerce, told Bloomberg, “Technology disruption leads to greater efficiency and should lead to lower cost-to-operate and relatively lower cost-to-scale.” This is when reducing TCO becomes critical. A streamlined and optimized tech stack ensures your resources are focused on innovation, not managing inefficiencies.

The ability to spend smarter — not more or less — will determine your brand’s ability to keep up with emerging innovations and thrive.

How lowering TCO drives growth and efficiency

Beyond the financial win of lowering your TCO, it sets the stage for more competitive operations. Here’s how:

• Improved margins: Lowering operating costs improves margins and reduces the burden on revenue. This gives your business the opportunity to focus on growth and innovation instead of just trying to cover costs.some text
  • Pro tip: Take a look at your subscription services — they’re a top tech sprawl culprit.

• Streamlined technology and processes: A lower TCO typically means fewer apps in your tech stack, streamlining processes. With fewer apps to manage, onboarding new employees becomes faster, and the software you keep works more efficiently together.some text
  • Pro tip: Consolidate platforms by choosing tools with built-in integrations or multi-functional capabilities.

• More resources for innovation: With higher margins, companies can reinvest in areas like marketing, new technologies, and product development. Instead of playing catch-up, you’ll have the resources to push your business forward.some text
  • Pro tip: Use cost savings to experiment with emerging technologies, like AI-driven personalization or AR for mobile shopping.

What you need to know about calculating TCO

The monthly price tag on your software is just one part of the TCO equation. A variety of hidden and ongoing costs can impact on your budget. Here’s a breakdown of the key factors: 

• Platform costs: The upfront and ongoing price tag for your software subscription or license.some text
  • Examples: Monthly subscription fees, premium feature add-ons
• Implementation costs: Expenses related to setup, customization, and onboarding — including the time and resources spent getting your team up to speed.some text
  • Examples: Developer fees, data migration, team training
• Operational costs: The ongoing costs of maintaining and upgrading your tech stack, IT support, and even downtime when things don’t go as planned.some text
  • Examples: Software updates, IT support contracts
• Performance and efficiency costs: Hidden costs like productivity loss, scalability expenses, and the challenges of integrating various tools into a seamless workflow.some text
  • Examples: Lost sales from downtime, integration challenges
• Risk and replacement costs: Expenses tied to security risks, data breaches, or the eventual need to replace obsolete software.some text
  • Examples: Data breaches, compliance fines, unplanned migrations

There’s no perfect equation for calculating TCO. Calculating your true TCO is especially complex for rapidly growing businesses, so look for TCO calculators to give you a leg up.

Proven strategies to lower your tech stack’s TCO

Reducing your tech stack’s TCO is a priority for staying competitive in 2025. According to Spiceworks, the top 4 out of 5 cost-saving measures businesses plan include: 

• Decommissioning unnecessary infrastructure (38%)
• Re-evaluating current vendors or contracts (37%)
• Adopting solutions that automate tasks or improve efficiency (34%)
• Consolidating redundant technologies (29%)

Each of these strategies focuses on minimizing inefficiencies while maximizing operational output. For ecommerce brands, a well-managed tech stack will be the backbone of efficient operations and the gateway to innovation in the years ahead.

How to lower your current tech stack TCO

Start by looking at the tech you have and making strategic adjustments. 

• Conduct a software audit: Inventory all the tools in your tech stack. Which ones are underused or unnecessary? Include energy costs, operating costs, maintenance, hosting, broadband, etc. — get as granular as necessary to feel good about your decisions. 
• Consolidate: Where are the redundancies? For example, do you pay for a separate email provider when your CMS already offers email capabilities? Also, check to see if there are features you don’t use that you can eliminate to reduce your monthly fees.
• Automate tasks across platforms: Eliminate double work and manual entry with automation. Bonus points: It also lowers your tech stack’s complexity.

What to look for when picking your next ecommerce solution

Lowering your TCO doesn’t mean you have to make ruthless cuts. Sometimes, the best way to reduce costs is to replace old infrastructure that’s holding you back. Here’s what to prioritize when evaluating your next ecommerce solution.

• Streamlined setup: Choose tools with minimal setup requirements to reduce time-to-market. The faster you get ROI, the less downtime and inefficiency impact your TCO.
• Built-in maintenance and compliance: SaaS platforms often include ongoing support, maintenance, and security in their fees. For instance, Tapcart provides this support, helping clients avoid additional expenses for development time or lost sales due to downtime.
• Seamless integrations: Opt for tools that integrate easily with your existing systems. This minimizes the need for support and development resources, reduces inefficiencies, and creates more opportunities for automation.
• Low downtime: Look for uptime guarantees above 99%. Less downtime means higher productivity for your team, and fewer missed sales opportunities if the software is customer-facing.
• Advanced personalization: Tools that enable better customer retention through personalization, like targeted notifications, can amplify ROI. For example, Tapcart helps brands transform mobile app investments into high-conversion assets.
• Scalable software: Pricing models that charge per user or per seat can become a hidden TCO culprit. Avoid the pricing trap by looking for software that charges by the feature, not the user. This keeps costs predictable as your team and your customer base grow.
• Future readiness: Beyond scalability, how future-ready is your current software? Invest in tools designed to evolve alongside your needs. For instance, Tapcart’s App Studio allows for flexibility and updates to accommodate emerging tech like AR and ML, ensuring your business stays ahead of trends.

Lowering your tech stack’s TCO is about cutting inefficiencies now to unlock flexibility for the future. The right approach helps your brand reduce costs while staying ready to adapt and grow.

How leading brands lowered their TCO with Tapcart

G FUEL cut costs by switching from a custom app

G FUEL reduced their TCO by switching from a custom-built app to Tapcart. Their custom app required costly developer involvement for every update, slowing operations and driving up expenses. Tapcart’s platform eliminated these bottlenecks, allowing G FUEL to manage their app in-house, make real-time updates, and streamline product launches.

“Compared to our previous app, the ease of use is monumental. Especially the way that we can change things on the fly.” — Victoria Hana, Senior Ecommerce Manager at G FUEL

Key benefits included:

• Lower costs: Eliminated developer fees.
• Streamlined operations: Reduced manual work with scheduling tools.
• Improved agility: Enabled instant updates and customizations.

In just one year, G FUEL’s app now generates 20% of their total online revenue, exemplifying how switching from old infrastructure to a new, more efficient platform reduces costs and drives growth.

Beekman 1802 drives ROI with cost-effective push notifications

Beekman 1802 leveraged Tapcart’s built-in push notification capabilities to save on SMS and paid advertising costs while driving customer engagement and conversions. By focusing on operational efficiency, the brand achieved an impressive 37x return on investment (ROI).

“[A mobile app] is a great opportunity to reach out to a very high-value target set of individuals and engage with just a single push notification, and do so in a way that is very quick and easy to mobilize.” — David Baker, Chief Digital Officer at Beekman 1802

Key benefits included:

• No additional costs: Push notifications replaced more expensive communication channels.
• Increased conversions: A 31% higher conversion rate on the app compared to the website.
• Improved efficiency: Faster communication with customers and reduced reliance on paid media.

In just a few months, Beekman 1802’s app users demonstrated higher engagement, retention, and average order values, proving that Tapcart’s features deliver measurable cost savings and revenue growth.

Set the foundation for innovation in 2025

At the most basic level, lowering your tech stack’s TCO will help you cut costs — but it can do so much more. It helps your ecommerce brand create space for bold ideas and innovations so you can grow and thrive in a competitive market. 

Start your transformation today by calculating how low your TCO can go with Tapcart.

Explore how App Studio can help you exceed user expectations and crush your business goals.

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Frequently asked questions about TCO

Here are some additional FAQs about total cost of ownership (TCO) to help you better understand the concept. 

What is total cost of ownership (TCO)? 

Total cost of ownership is the total sum that goes into owning a product. This includes both direct costs, like subscription fees, implementation costs, and hardware, and indirect costs, like onboarding, maintenance, and electricity.

Why is conversion rate integral to TCO?

TCO includes opportunity costs — what are you missing out on by having inferior technology? Conversion rates impact your revenue, so technology that doesn’t boost CVR hinders revenue growth and should be included in your TCO calculations.

What are the benefits of native functionality in platforms like Tapcart?

Native functionality delivers faster app performance while unlocking mobile-specific features, creating a better experience for your team and customers.

What tools or systems typically have a high TCO in ecommerce?

Outdated or overly complex enterprise systems and platforms with hidden costs related to scaling, integrations, or customizations are common culprits.

How can I reduce TCO in my ecommerce business?

Streamlining your tech stack is a great start—eliminate redundant tools and choose scalable, low-maintenance platforms like cloud-based or SaaS solutions. Automating manual processes also boosts efficiency while keeping costs down.