Salesforce made its largest acquisition ever yesterday, acquiring Demandware for $2.8B.
At first glance these two software vendors compliment each other well because there is so little redundancy -- Demandware filling a commerce gap in the Salesforce portfolio. However, it’s more complicated than that. From the DX platform angle, Salesforce is acquiring a competitor.
On paper, calling these two competitors is an apples and oranges comparison:
Emotions are at the basis of how customers perceive experiences – and why they choose to stay loyal to certain brands. But, not all emotions are equal: Different emotions lead to unique behavioral outcomes depending on context, emotional intensity, and even industry.
For example, in our latest study, my colleague Tom McCann and I measured the emotional impact of CX among banks and retailers in Australia. We discovered that feeling valued is one of the most powerful emotions driving loyalty toward a bank: Australian customers who feel that their bank puts them first are willing to pay a premium for the bank’s experience and are more forgiving when something goes wrong. However, among retail customers, valued is good – but happy is better. Australian retailers that leave customers in a cheery mood are more likely to retain their shoppers and turn their customers into advocates.
And what makes Australian shoppers happy? Forrester’s Consumer Technographics® survey data shows that details in the experience go a long way. For instance, customers are pleased with perceptibly low prices or special deals, stocked inventory, and pleasant customer service reps.
In my earlier blog post, I talked about why you should attend this year's Digital Transformation Mumbai 2016 Forum. With the event just around the corner, I'm very much looking forward to the various sessions that we have in store that will help India's most senior business leaders understand Forrester's research on the customer-obsessed operating model, which will provide a blueprint for organizations on their digital transformation journey.
As I prepared for my role as Forum Chair, I spoke to Paul Cobban, Chief Operating Officer, Technology and Operations at DBS Bank, about his views on the need to be customer-obsessed and what DBS is doing to digitally transform themselves.
I hope to see you at the St Regis Mumbai in less than 2 weeks – register here! In the meantime, here's a sneak peek of what to expect from Paul's session at the Forum.
Q: How has the age of the customer impacted the financial services industry? How have you seen consumer needs evolve?
Salesforce announced today their intent to acquire Demandware for $2.8 billion – its largest acquisition to date. This move adds commerce to its CRM portfolio. It's an acquisition long due, with the question of why it took Salesforce so long to fill their gaping hole in CRM functionality – commerce functionality that its formidable CRM competitors such as Oracle and SAP already have - and that Microsoft sorely lacks.
Demandware offers an enterprise cloud commerce suite (digital commerce, order management, point-of-sale, store operations), and together, in conjunction with other Salesforce clouds – marketing, sales, service, communities, analytics and IoT – allows companies to support the end-to-end customer journey which include scenarios like asking a product question during an online purchasing process, or purchase a purchase a product or service during an online customer service interaction.
The positives of this acquisitions are:
It's a software category with a bright future. The market for B2C commerce suite technology is mature, yet it is growing, and set to exceed more than $2.1 billion in the US alone by 2019. This acquisition allows Salesforce to tap into a growing market, and coupled with their IoT cloud, allows them to also explore personal, high touch retail experiences.
I attended a software-related conference recently; I’m not going to say which one as this is about something I observed at the conference, not about the conference itself. Being a software conference, the conference organizers did a lot of the expected digital stuff: registration, reminder emails and conference check-in. Up to the end of the registration process, everything I did with respect to the conference was handled electronically. The first time I went analog was after I picked up my geek badge (conference credentials) from the printer and went over to a human who handed me my badge holder, backpack and requisite stack of sponsor advertisements.
I dutifully loaded the conference app and proceeded to manage my interaction with the event (session schedule, location of special events and so on) through the app. When attending conference keynotes and sessions of interest, I carried my smartphone and tablet, nothing more, and that’s when it got interesting.
One of the things the conference gave me during registration was a pen. I’m a digital guy; I didn’t have any reason to use a pen, so I dropped it on the desk in my hotel room and carried on. As I approached any conference session, the gatekeeper outside the session would try to hand me an evaluation form. Yes, a paper evaluation form. This is what started me thinking about what happens when you only do digital half-way.
Being digital is like jumping out of an airplane: Once you’re out that door, there’s no getting back in the plane.
In this case, the conference had an app, so I expected to do session evaluations in the app. At each session, I politely informed the gatekeeper that I didn’t have a pen, so I couldn’t do the evaluation. They got to know me and eventually started letting me know they’d have a pen for me the next time, but never seemed to come up with one.
Customers today are hyper-connected and their connectivity is rewriting the rules of business. Access to mobility, social networks, wearable devices, connected cars and hotels managed by robots are rapidly changing the behaviors of how customers engage and purchase. Think how you watch a film, shop or order a taxi.
The disruptive power in the hands of newly tech-savvy customers is forcing every business to evolve into a digital business or perish.
Infrastructure is at the center of the Digital Transformation
The digital transformation requires that organizations evolve their underlying technology infrastructure investments to fuel a business technology (BT) agenda, with technology designed to win, serve, and retain customers. Infrastructure – whether it is managed internally or hidden behind some cloud service – is a big part of the digital in digital business. I&O leaders can no longer simply focus on the same old approach to infrastructure. Internal business operations, or systems of record will remain important, but the emphasis must shift more to systems powering the newer digital customer experience
We are all aware that software is at the center of transitioning every successful business today. This software focus fueled a rapid expansion of cloud services and many argue that there is no longer a necessity to own hardware. This has turned the infrastructure world upside down. Hardware speeds and feeds no longer dominate infrastructure and operations (I&O) professionals' criteria. In some use cases, qualities like the fastest packet-processing chip or largest disk capacity are critical, but they matter less to many of the systems of engagement in the BT agenda. As you design your BT services, be aware of which solution is right for optimizing the customer experience.
When we think about the public cloud, the list of credible providers can sometimes seem rather short.
(The Great Wall of China. Source: Paul Miller)
In North America, Europe, and elsewhere, the same few names tend to dominate. But not in China. There, big local brands continue to command impressive market share. And now they're looking to expand into new territories, including Europe.
Huawei hardware and Huawei's distribution of the OpenStack open source cloud platform power T-Systems' Open Telekom Cloud. This was launched, with some fanfare, at CeBIT in Hannover.
Alibaba Cloud, which leads the Chinese public cloud market, is also coming to Europe this year.
In my latest report, I take a look at what both Alibaba and Huawei bring to Europe's public cloud market, and ask whether they can repeat their domestic success in this market.
TL;DR - it would be unwise to discount either of them.
Three of the four leading vendors – Adobe, Salesforce, and Oracle – base their CCCM solutions on email service provider acquisitions. All have expanded their cross-channel coverage, and their customer data management and analytics functionality continues to evolve. Conversely, SAS is the only leader among traditional CCCM vendors, because of its customer data management and analytics prowess, as well as evolving digital marketing capabilities.
IBM is a strong performer because of its enterprise CCCM and digital marketing capabilities, but it has yet to fully integrate its acquired assets. Similarly, Selligent is currently integrating its CCCM and digital marketing capabilities for the mid-market. Pitney Bowes and Pegasystems offer solid analytics and RTIM capabilities, though they lag the leaders when it comes to outbound digital marketing. SmartFocus, Emarsys, and Experian are challenging established CCCM and digital marketing vendors with their interaction-focused solutions. RedPoint Global offers customer data management and marketing automation to support CCCM execution.
Two weeks ago, I was lucky enough to spend 10 days in Italy on a vacation with my wife and some friends. As we walked the Path of the Gods, made our own Neapolitan pizze, and enjoyed the gorgeous views of the Amalfi coast, different people in our group would pay for a limoncello here or a glass of aglianico there. As such, our financial activity was a mix of different individuals spending various amounts for a range of stuff. But our group was often too busy having fun to carefully track who paid how much for what and when.
Enter Splitwise* a non-bank mobile app that lets groups of people easily track their spending and settle their short-term debts to each other (see screenshots below). We used it throughout our trip, and it was a breeze.
But why didn’t a bank build this kind of convenient digital offering first? Or why don't more financial providers integrate with Splitwise and other disruptors to build ecosystems of values for their customers? Many bank executives and digital banking teams say their goal is to help customers better manage their finances (and increase retention and engagement by doing so). But too few financial institutions have focused on what Forrester calls the shared finances opportunity. Forrester defines shared finances as:
Any situation in which a person acts as an observer of, partner in, or proxy for another person's finances.
Moonlighting as a contributor to our CMO role's research, I've just published a major new report about how virtual reality will affect marketers, collaborating with Forrester's lead on digital disruption, James McQuivey, PhD.
CMOs and other marketers have four choices when it comes to virtual reality (VR). Most of you should wait and see, because there's no business imperative to invest scarce time and resources in VR this year. But there are three other choices available to digital predators – that is, CMOs at companies that want to shape trends, not follow them:
Crawl – The Coachella music festival went a step beyond providing an event app: they handed out thousands of cardboard VR headsets to attendees. Since festival-goers can't be everywhere at once, they can catch shows that happened on other stages, extending and rounding out the benefits of attendance. They recognized that consumers don't yet own their own VR devices, so they gave them out as part of the experience to deepen engagement.