E-commerce: how Salesforce Commerce Cloud buys Demandware and gets a head start
Whether you call it e-commerce, online sales, ecommerce or any other term, there's a real revolution taking place in the Internet commercial sphere, which you'll discover in this ecommerce guide. As consumers continually seek a near-perfect online shopping experience, publishers are struggling to deliver what should be an impeccable omnichannel experience.
Salesforce acquires Demandware in 2016
Demandware, acquired by Salesforce in 2016 and renamed Commerce Cloud, has proved particularly convincing in tackling this omni-problem. The originally French software company has grown from an online software (SaaS) newcomer in 2004 to become a leading omni-channel e-commerce platform that is today at the center of three major sectors: retail, digital commerce and cloud computing.
What is Salesforce Commerce Cloud?
Salesforce Commerce Cloud (formerly Demandware) helps merchants design, implement and manage their ecommerce sites in a customized way, with a focus on omni-channel experience, merchant autonomy and infinite shelving.
What makes Salesforce Commerce Cloud different?
Demandware (with nearly 300 employees prior to its takeover) has since its inception ten years ago and IPO in March 2012 become an ambitious competitor in digital commerce (42% year-on-year growth) and 630 live sites (57% year-on-year increase), while its revenues have grown from around $36 million in 2010 to nearly $80 million in 2012.
Salesforce Commerce Cloud has taken the lead with its cloud platform, while others continue to question whether the cloud is ready for direct-to-consumer processes. Salesforce Commerce Cloud has answered this question with a resounding "yes". While there have been a few bumps in the road, such as Finish Line's problems with a $1.4 billion sportswear chain, the strong growth of Salesforce Commerce Cloud and customers such as Tory Burch, Adidas, Bestseller, Carter's, Brooks Brothers, Pier1 Imports, Panasonic and others are testament to the durability of the Salesforce Commerce Cloud architecture.
Salesforce Commerce Cloud focuses on delivering a unified, multi-tenant solution for managing all direct-to-consumer processes from a single web-based platform. The Salesforce Commerce Cloud solution comprises three components:
- Commerce Center: controls the digital commerce experience across all channels;
- Control Center: the operational and administrative control center;
- Development Center: the module for customizing the Commerce Cloud environment.
Salesforce's LINK program offers a vast array of plug-in-play partner solutions around email marketing, ratings and reviews, social technology, tax, advertising and payment technology solutions.
Of course, we can't overlook Commerce Cloud's subscription-based pricing model, derived from revenues generated by the merchant's site. In this way, Commerce Cloud places great emphasis on gross merchandise value (GMV). Critics will say that this model means that retailers hand over a percentage of their gross revenues, on an ongoing basis, to Salesforce. From Salesforce's point of view, they are fulfilling a long-standing desire in the market for technology providers to further leverage their customers' success.
Although our discussion with Commerce Cloud was wide-ranging, three themes emerged for us: the omni-channel experience, merchant autonomy and the infinite shelf.
1. The omni-channel experience
The advent of the omni-channel experience obviously involves almost all consumers. A graphic from another Oracle / ATG supplier illustrates the challenge:
As our world becomes increasingly complex, mobile and fast-paced, we consumers expect the user experience to keep pace and at the same time become easier. Few consumers understand why their experience should suffer as they try to make better decisions faster and through more channels of interaction.
A market leader like Salesforce can't ignore these challenges and seeks to solve them, and it's natural, but reassuring, to see them as one of Demandware's core missions.
At Magento's Imagine 2012 conference, Katherine Brodie (C. Wonder), James Horne (Balance Internet) and Bernardine Wu (FitForCommerce) presented a slightly different way of approaching the same problem:
Whatever representation or graphic best illustrates the problem for you, the challenge is to make it as simple and transparent as possible so that your customer consumes via the channel of their choice, and starts and finishes any given transaction via different channels at different times.
Demandware tackles this challenge with its cloud-based approach, which enables the company to deliver a continuous stream of innovations to all its customers through a series of rolling releases around six times a year.
Is this important for retailers? Steven Keith Platt, director and researcher at the Platt Retail Institute (PRI), points out in recent research findings that it does matter, although it differs according to retailer size. While 43% of companies responding to Platt's research report are undertaking or planning an omnichannel marketing initiative (OMI) over the next three years, 83% of retailers in the $500 million-plusrevenue group are already creating or considering implementing an omnichannel strategy.
2. Retailer autonomy
Demandware believes that one of the keys to the digital commerce sphere is enabling the merchant to have more control and capability. But what does this really mean?
Merchants are demanding - and getting - more capabilities for the creation, syndication (broadcast rights) and publication of product information. More customization in these areas across channels, customers and geographies; greater flexibility in creating, modifying, configuring and extending system logic across multiple channels and devices; creation and customization of workflow and logic to differentiate the end-user experience; richer promotional capabilities; provision of templates to assist the merchant; more perspective, from true customer insight; better editing capability, large-scale view, to facilitate changes to product selection, etc. and more options for previewing a new page or website before launch.
Salesforce Commerce Cloud aims to strongly perfect what affects the customer and uses in-house development, while leveraging the capabilities of its LINK partners to offer more autonomy to the merchant. And while that's part of the deal for every digital commerce provider, Salesforce Commerce Cloud seems to be one of the providers that's furthest ahead in terms of empowering merchants, unlike many other providers who more often opt, first, for an authoritarian, control-first approach to working with merchants.
3. The Infinite Ray concept
Rob Garf, VP of Product and Solutions Marketing, also told us about Commerce Cloud's Infinite Shelf concept, which will give store staff access to tablet-based solutions, ostensibly increasing in-store inventory with online inventory where appropriate for better customer service. Demandware reports steady progress in this area, with customers likely to go online in the coming months.
The "infinite shelf" concept has been around for some time. We've been talking to customers about this concept since 2007, focusing on the use of in-store kiosks. While technological advances have now moved the debate forward to include current technologies, such as tablets and other handheld devices, kiosks are still part of the conversation.
Staples, for example, in its most recent quarterly newsletter, talked about its plan, as part of its omni-channel strategy, to expand the use of in-store kiosks during an experimental infinite-radius customer offer initiative. One of Staples' first omni-channel stores has just opened in Norwood, Massachusetts.
Competitors and alternatives to Salesforce Commerce Cloud
This is not to say that Demandware is alone in this sphere. There are plenty of other players in the space, and they're not sitting idly by: IBM Websphere Commerce, Oracle / ATG, Elastic Path Software, eBay / Magento and Hybris, Starmount, Digital River and eBay (formerly GSI Commerce, an outsourcer for e-commerce-related business activities), MarketLive and Venda (providers of on-demand hosted subscription services).
NetSuite has announced the acquisition of OrderMotion, with at least some apparent motivation to use the technology to optimize Demandware. This seems to be a turf war we should have anticipated: the cloud-based ERP software solution aspires to be a digital commerce system versus a digital commerce system that may or may not care to be an ERP system. During Demandware's last quarterly conference call, CEO Thomas Ebling reportedly didn't even answer an analyst's question about NetSuite as a competitor.
All of which makes things interesting in the e-commerce sphere. TEC is keeping a close eye on this topic, and we'd love to talk to you about your plans for digital commerce, either as an end-user or as a publisher. All I know is that SkyMall is now a Salesforce Commerce Cloud customer, which will provide customers with the easiest and most enjoyable experience possible.
Article translated from French