After many, many months of analysis and hard work, we are very pleased to have published the 2012 edition of the B2C Commerce Suites report – or the artist formerly known as the “eCommerce Platform Wave”. Some high-level conclusions:
- Investment in commerce technology & platforms remains strong. Fifty-six percent of businesses are increasing their investments in commerce technology, with 18% increasing it more than 20% in 2012 from 2011. A whopping 46% percent of companies are considering a change in their commerce platform in the next two years.
- Interest in cross-touchpoint solutions is on the rise. The way we now need to think of eBusiness technology has fundamentally changed. No longer are businesses selecting a set of solutions and technologies to launch a site; they are now selecting technologies that can support marketing, shopping, buying, and service capabilities across a multitude of customer touchpoints. To accomplish this, today’s solutions must enable consistent core platform capabilities to manage products, orders, and customer data, integrating consistently with enterprise systems. At the same time, solutions must be open and flexible to power websites, mobile sites, applications, call center interfaces, and in-store options. This represents a significant evolution from the requirements that these solutions have needed to support in the past.
- Better order management to handle increased fulfillment complexity is crucial. Today’s direct-to-consumer businesses are increasingly leveraging multiple fulfillment centers and drop-ship vendors while adding cross-channel capabilities like ship-to-store and in-store pickup. Wal-Mart has even enabled customers to order online and then pay with cash when picking up the order in a store. As a result, orders will no longer be fulfilled from a single fulfillment center. Tomorrow’s orders will be sourced from a wide variety of locations that include not only the fulfillment center but also drop-ship vendors, distributors, stores, and third-party logistics providers that may either regionally stage high-demand products or support seasonal inventory volumes — or both. Order management capabilities are now critical to driving a high-quality consumer experience.
- Support for multiple businesses and regions is now a must-have. Today’s multichannel businesses are increasingly multisite and multibrand businesses. This trend enables more specific and targeted marketing opportunities for customers; they can also benefit from search engine optimization (SEO) by enabling the use of more specific terms and metadata to target related search terms. Innovative merchandising and marketing in areas like flash sales, social commerce, and mobile commerce are also driving forces behind the need to support a diverse set of sites and customer touchpoints from a common infrastructure. Meanwhile, global commerce has emerged from being a nice-to-have requirement to a must-have one — even though many organizations may not yet be ready to fully invest in standalone sites and businesses for new global markets. For many businesses, international markets present a long-term opportunity to grow and diversify their global retail operations and/or brands.
High-Level Wave Findings:
- IBM, hybris, Oracle, and Demandware lead the pack. IBM, hybris, and Oracle offer strong eCommerce capabilities, the ability to support multiple touchpoints and multichannel requirements, and strong or very strong business management tools. IBM has the lead in order management capabilities with its Sterling Commerce solution, whereas hybris and Oracle have less mature solutions in this area. Demandware offers a SaaS solution with strong multisite and effective merchandising tools, but its order management solution is nascent and aimed at smaller and less complex clients at this stage. IBM, hybris, and Oracle offer traditional software application licensing models but have also worked to add flexibility that utilizes third-party hosted/managed or SaaS models.
- Micros-Retail, Intershop, RedPrairie, and Digital River offer compelling solutions. Each of these vendors offers strong eCommerce capabilities, with varying multitouchpoint and multichannel capabilities. Each offers strong to moderately strong eCommerce features and moderately effective business management tools, but the vendors vary considerably in areas such as product catalog management, WCM, order management, and support for globalization/internationalization. Intershop has made significant strides, largely through leveraging its relationship with GSI and their joint ‘next-generation’ V11 project, but the company still lags the market leaders. Micros-Retail offers strong merchandising tools, differentiated testing, and effective site and content management tools. RedPrairie has combined the former Escalate Retail Blue Martini product with its order management system (OMS), call center, and supply chain solutions, but it has yet to see the benefit of its investment in the core eCommerce solution. Digital River is largely geared toward smaller enterprise or midmarket clients, and it continues to focus on consumer electronics, software, and manufacturing clients.
- SAP and Magento lag behind. These two vendors can offer well-placed solutions for the right client, but they lag behind the competition as solutions for the enterprise B2C eCommerce client. SAP’s solution is unique in this evaluation as the product is not intended to really stand alone as a commerce platform; rather, it aims to help SAP’s ERP/CRM customers extend that product to support eCommerce. While holding promise in terms of reducing integration complexity and simplifying the management of the solution — especially for on-premises, IT-led programs — the combined solution requires third-party CMS tools and lacks overall competitive capabilities when compared with the wider market. Magento is a commercial open source solution which has enjoyed remarkable success since it launched its open source product (Magneto Community Edition) targeting small businesses five years ago. However at its core, the “enterprise edition” remains geared toward these smaller clients, with the extensions that target more sophisticated clients still falling short.
Chose A Vendor Carefully
I am tracking more than 210 different vendors in the commerce platform space, and this does not even account for commerce service providers, integrators, agencies and consultancies many of whom offer their own solutions or package up third-party solutions some of which are included in this report. Even with the significant consolidation over the last few years we continue to see significant diversity and fragmentation in the market.
While this report’s goal is to help client navigate the choices available to them in this market, do not make the mistake of taking the top vendors in this (or any) evaluation and talking only with them. You must do the work to identify your business goals, brand and service differentiators, desired customer experience, technology strategy, operations capabilities, and strategic objectives. And you must take these vendors through a thorough scenario-based evaluation process before making a thoughtful and confident vendor selection decision. You will be living with this decision for 5 to 10 years. Forrester and others provide services in support of this effort. I encourage you to explore them. And… do not ignore the importance of commerce services providers who implement and support many of these solutions. That may be an even more important decision than the technology you select.
Additional Research: For clients, coverage of SMB focused solutions is available here, B2B focused solutions coverage is available here, and digital goods focused solutions are available here, by my colleague Peter Sheldon. The Forrester Wave: Commerce Services Providers, Q1 2012 is available here.
Acknowledgements:Many, many people were involved in this Wave report, but I would especially like to thank Lily Varon for her patience and tireless attention to detail, Peter Sheldon for his insightful contributions, and the product and marketing teams from the solution providers who participated.