Does 2017 mark the end of big e-commerce solutions?
I have been observing the market for e-commerce solution editors for a few years now and this world is being recomposed: on the one hand, “small solutions”, in SAAS, for SMEs, and on the other the disappearance of “ big solutions ”for the benefit of specialized cross-channel applications. It is also the return of “custom dev», Front office side!
The e-commerce scope cleared by large publishers
The “big e-commerce solutions” like SAP Hybris, IBM Websphere, Oracle ATG, Intershop, were born for the most part 15 to 20 years ago, at a time when digital in companies was ERP. It was then necessary, to serve the new needs of the web, to partly replace the functions of the ERP. This made it possible not to directly expose a large number of visitors to the company’s IS, and to ensure a good level of service, while also providing flexibility to an IS that knew EDI but not yet APIs.
This is how these e-commerce solutions have integrated catalog management, customer and customer service management, an order manager, a promotions engine, etc.
Pure e-commerce functionality has become a convenience
As Philippe Humeau clearly shows in his white paper on e-commerce solutions, the functionalities that make up an e-commerce solution have gradually become standardized. It is now possible to access a great functional wealth (at least in B2C because B2B is more complex) with free or very low cost solutions (WooCommerce, Shopify, Prestashop…). These solutions are more and more accessible in SAAS (you pay a monthly subscription to access the solution which is updated and hosted).
As a result, “big solutions” have seen their functional lead over small solutions shrink in just a few years. They still have B2B functions, preview, workflows personalization, promotion engines or merchandising advanced, but the gap with “free” is not what it was even 5 years ago. Their point of strength remains robustness, scalability, native performance for large traffic.
Big e-commerce solutions caught in the omnichannel trap
These “big” publishers (IBM, Oracle, SAP, etc.) address a worldwide market of a few hundred redesigns per year. It is a small market, with long and expensive pre-sales.
However, most customers are retailers, which have store networks, and whose major challenge has become a seamless, omnichannel customer experience. Omnichannel implies that whatever the point of contact between the customer and the brand, its context and its information are accessible without interruption of the experience. It is therefore essential to have reliable and accessible information at all times (on the Web, mobile, at the store checkout, at the call center…) On stocks, prices, customer data, baskets, quotes, applicable promotions, orders, etc.
As robust and rich as they are, e-commerce “big solutions” come from e-commerce. They are less functionally rich than other vertical solutions which only deal with part of the subject: PIMs for products, DAMs for the media, OMS for orders, CRMs for customers, etc.
At the same time, “new technologies”, in particular API and microservices-oriented architectures, have become more democratic, making it possible to assemble expert bricks (PIM, OMS, CRM, etc.) with the store checkout, the e-commerce solution, etc. This is the path that most retailers nowadays.
Finally, the advent of SaaS has made it possible to completely open up certain markets to expert bricks such as the searchandising (the French are not left out with Algolia, Pertimm, Sparkow, or the very young Sensefuel), personalization and recommendation (here again we have French Tech start-ups like Nuukik, Early Birds, Antvoice, Netwave, Target2Sell … ), or AB Testing (AB Testy, Optimisely, etc.). It should also be noted that these 3 sub-markets are in the process of merging because they are closely linked.
How did the big e-commerce publishers react?
Most have bought back the expert bricks they lacked in order to have a “full service”, pre-integrated, seamless offer.
Hybris was originally a PIM, created its e-commerce brick, then bought out the WHO iCongo, before being bought by SAP, which integrated the whole into the ERP.
Oracle acquired in a few years Siebel (CRM), Peoplesoft (CRM), ATG (e-commerce), Endeca (searchandising), Eloqua (Marketing Automation) …
IBM created Websphere Commerce, then bought Sterling Commerce (OMS), Coremetrix (analytics), Unica (marketing automation, etc.)
Intershop bought the OMS Bakery, and developed an internal PIM.
The problem is that selling all of this offer “full serviceIs extremely complex.
What remains of the “big solution” e-commerce?
The omnichannel projects that the big guys are currently operating retailers aim to gradually undress the e-commerce solution to make it rely on expert omnichannel bricks.
These “multi-branch” integration projects are long and expensive, even though the initial “e-commerce” solutions have duplicate functions that will no longer be used, and have often themselves been complex to integrate (Websphere, Hybris , ATG, Intershop…).
Why then pay a high price for a “big solution” if in the end a large part of its initial utility, such as catalog management, merchandising, orders, baskets, etc?
It will be used for Web and mobile pages, perhaps providing part of the personalization, perhaps keeping part of the order funnel… But gradually these bricks are emerging from a purely “e-commerce” scope.
From e-commerce solution to CMS for wholesalers retailers
For the big ones retailers, I sense the gradual disappearance of “e-commerce solutions” in the information system, to replace them with something that looks more like a “CMS” (content management system).
It is about creating a Web / mobile front office on top of a layer of services accessible by API.
Several interesting solutions are available to retailers:
· Create a front “lightweight” in custom (.js frameworks are very successful)
· Create a front “lightweight»With an accelerator like ONGR or Sprykr
Adopt a CMS like Adobe Experience Manager which will allow you to manage customization and many advanced functions
All of these options can be integrated with historic e-commerce solutions, which makes it possible to make a transition: first we decommission the front office of the e-commerce solution to replace it with a lightweight front or a CMS, then in time 2 we decommission the other modules (catalog, customers, shopping cart, etc.) in favor of expert bricks.
So what trends for 2017?
For SMEs and “small e-merchants”, the trend is clear: adoption of a relatively low-cost SaaS e-commerce solution (convenience), and parallel sales on marketplaces via flow aggregators (Lengow, Neteven, Iziflux, Beezup…).
For the big ones retailers: gradual phasing out of large e-commerce solutions starting with the front office
For mid-size e-merchants, the compromises will be found at Magento which has just added an OMS to Magento 2, Demandware, or even IBM Websphere which has released a very affordable SaaS offer …
For B2B it’s another story, Intershop, Hybris or small players like OroCommerce still have a bright future ahead of them, the market not meeting the same challenges for the moment.
Francois Duranton in 2011 created the Expertime Consulting firm, which supports digital directors in their transformation and acceleration issues. Previously, he spent 7 years in the Redcats group leading digital projects, and 3 years in a mobility startup. His favorite subjects are project support for omnichannel commerce platforms, marketplaces, and business plan modeling. François Duranton, 39, graduated from ESCP Europe.
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