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 is a real revolution taking place in the online commercial sphere, which you will 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 been particularly convincing in tackling this omni-problem. The originally French software company has grown from a SaaS newcomer in 2004 to become a leading omni-channel e-commerce platform that is now at the centre of three major sectors: retail, digital commerce and cloud computing.
What is Salesforce Commerce Cloud?
Salesforce Commerce Cloud (formerly Demandware) helps retailers design, implement and manage their ecommerce sites in a customised way, with a focus on omni-channel experience, merchant empowerment and infinite shelf space.
What makes Salesforce Commerce Cloud different?
Demandware (with nearly 300 employees before its takeover) has since its inception ten years ago and IPO in March 2012 become an ambitious digital commerce competitor (42% year-on-year growth) and 630 live sites (57% year-on-year growth), 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 that question with a resounding 'yes'. While there have been bumps in the road, such as Finish Line running into 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 centre;
- Development Center: the module that customises the Commerce Cloud environment.
Salesforce's LINK programme offers a wide range 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. Commerce Cloud places a great deal of emphasis on the 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 perspective, they are fulfilling a long-standing desire in the market for technology providers to further leverage the success of their customers.
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 more complex, more mobile and faster, 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 is looking 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 is tackling this challenge through its cloud-based approach, which enables the company to deliver a continuous stream of innovation 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 depending on the size of the retailer. 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 $500m+revenue 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 asking for - and getting - more capabilities in the creation, syndication (broadcast rights) and publication of product information. More customisation 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 customisation of workflow and logic to differentiate the end-user experience; richer promotional capabilities; provision of templates to assist the merchant; more perspective, true customer insight; better editing capability, large-scale view, to facilitate changes to product selection, etc.; and more options for merchants to create, syndicate and publish product information. and more options for previewing a new page or website before launch.
Salesforce Commerce Cloud aims to strongly improve 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 this is part of the deal for every digital commerce provider, Salesforce Commerce Cloud seems to be one of the providers that is furthest ahead in terms of empowering merchants, unlike many other providers that more often opt 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 shop staff access to tablet-based solutions, ostensibly increasing in-store stock 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 have 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 shelf customer offer initiative. One of Staples' first omni-channel shops has just opened in Norwood, Massachusetts.
Competitors and alternatives to Salesforce Commerce Cloud
That's not to say that Demandware is alone in this sphere. There are plenty of other players in the space, and they are 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 optimise Demandware. This seems to be a turf war that 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 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