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.
Wow, do I have the perfect job for the right person. We have just posted a new position to join me in developing, creating, publishing, and delivering research and consulting services to inspire and guide eBusiness & Channel Strategy Professionals. This Associate Analyst will write and publish leading eCommerce and agile commerce research and become a critical member of Forrester’s eBusiness and channel strategy research team. They will also be out in front of our clients presenting research and helping them with challenging, important decisions.
The questions we are focused on at Forrester just keep getting more interesting and more strategic. There is so much more we can do to develop research on the technologies, services, and trends important to eCommerce and multichannel leaders across the globe. That’s why I am so excited about this. This person will help us scale our eBusiness technology research coverage and expand into important areas. (Don’t worry, there is a long list sitting right here to my left as I type this. You won’t get bored. Promise.)
This is a great opportunity to join a proven and growing research area on a fantastic team. If you are even remotely interested, check out the job description, and of course I encourage you to apply if you feel like this could be a good fit for you – or forward to that just-right person you know. This really is a great opportunity.
As Amazon.com has grown aggressively in recent years, expanded into diverse businesses, and achieved profitability, its impact on the eBusiness and retail sectors is greater now than ever before. For many businesses, Amazon is simultaneously a sales channel, a potential service provider, and a competitive threat. To explore this complex relationship and to understand Amazon both today and where they are going next, my colleague Sucharita Mulpuru and I conducted many interviews with retail industry leaders, former Amazon leadership, and industry thought leaders – culminating in our latest report.
In the report we look at Amazon’s significant influence on retailing in the US today, the key factors driving Amazon’s amazing growth, what we can expect from Amazon next, and how retailers can effectively compete and coexist with Amazon. We also look at Amazon’s vulnerabilities, including:
As customer behavior continues to evolve, and digital channels become ever more important to businesses, eBusiness budgets have been steadily rising since 2008. In 2010, the average company invested $34.4 million on their customer-facing online presence, and the average mobile and social spending both passed the $2 million per year mark. There has also strong growth is spending in eCommerce technology, with nearly two-thirds of eBusiness professionals citing an increase in eCommerce technology investment in 2011.
So where do firms stand today? Help us find out by taking our latest eBusiness & Channel Strategy Panel Survey on eBusiness budgets and commerce technology investment. It will take only about 10-15 minutes to complete. We invite Forrester clients and non-clients alike to participate in the survey. For non-clients, as a thank you for completing the survey you will be given a choice of one of three complimentary Forrester reports.
I really appreciate your help in understanding the state of eBusiness budgets and spending and we look forward to putting that research together for you.
China has become the leading emerging market for many Western brands and retailers. For many businesses, the growing spending power of high-income consumers and the middle class in China has become a compelling growth engine. For luxury brands, China is already a huge growth market, and many Western companies have had a brand presence in China for many years, albeit often with counterfeit products and even whole counterfeit stores. But as the economy grows in China and consumer thirst for foreign brands increases, companies will be compelled to consider an online direct-to-consumer presence due in-part to the following factors:
The scope of the Chinese market is immense. Not only is China one of the largest in the world by area, it already had more than 171 cities with more than 1 million inhabitants as of the country’s last census, which has likely increased markedly in the last 10 years. While launching physical stores in core markets such as Beijing, Shanghai, Chengdu, Guangzhou, and Shenzhen may be feasible, reaching even just the top-tier cities is extremely challenging operationally, particularly for a Western brand or retailer. eCommerce presents an important way to reach consumers across the entire country while complementing any decision to invest in core physical retail operations.
Adobe recently announced its partnership with hybris. This deal has been a poorly kept secret as Adobe waited to make public announcements at its customer summit even after it has been out selling the joint solution and working with partners. Adobe is integrating the hybris commerce platform with Adobe's Web Experience Management (WEM) solutions, an artist formerly known as Day CQ5. This is intended to add commerce capabilities to the CMS/CXM solution represented by WEM. Companies should consider a number of things when evaluating this product relationship between hybris and Adobe, including:
It seems online marketplaces are cropping up everywhere. Retailers, software companies, media companies, and consumer electronics makers are using marketplaces as a means to enhance and augment their own offerings with products made, owned, and distributed by third-party retailers, distributors, developers, and brands. The most successful examples of these today are of course Amazon’s Marketplace, eBay, Apple’s App Store, and Valve’s Steamworks. But based on numerous inquiries of late, soon we will see many, many more marketplaces online. Key reasons why we are seeing the proliferation of marketplaces in the next 18-24 months:
For retailers, it’s about growing the assortment without the inventory risk. Larger scale pure-play online retailers and multichannel retailers look to the significant growth of Amazon.com’s marketplace — which today comprises approximately 35% of Amazon’s gross retail sales — and wonder if they could also benefit from a marketplace. Adding a marketplace provides the opportunity to extend the product assortment and available pool of inventory without taking on the inventory risk and expense of merchandising, buying, warehousing, and shipping an assortment in unproven categories. For some it may be even a way to bring licensed products under a brand umbrella. Amazon’s model is to take roughly half the margin of the products sold — based on expected margin by category — as the fair value of driving that demand, but they bear none of the inventory sourcing, carrying, or logistical costs.
IBM announced today that it is selling its $1.15B Retail Store Solutions (RSS) business delivering and supporting retail point-of-service (POS) terminals to Toshiba for a reported $850 million. IBM will continue to have a nearly 20% stake in the new company formed by the deal, with plans of divesting that over the next three years. With retail being such a core vertical market for IBM, the deal begs some questions.
Why would IBM sell such a significant business in a core vertical market?
Channel-centric solutions are on the endangered species list. While I do not expect to see a bunch of stories out of Eugene, Oregon about protests over the environment for retail POS systems,* the market for POS systems has changed dramatically over the last few years. Retail store systems have become a maintenance business with little growth. Retailers are closing stores, distressed commercial retail real estate is everywhere but the top luxury malls and downtown cores, and there is very little incentive for retailers to upgrade or replace retail systems today, in part because . . .
Over the last few years we have seen a shift in client requirements. Commerce solution programs and eCommerce platform projects have begun to reflect a change in how companies are beginning to do business, and in next generation capability needs they have that encompass:
Managing orders across a diverse set of customer touchpoints. It is no longer just about the web. Today’s eBusiness is taking orders through the web, through the mobile web, through mobile apps, through marketplaces, through the contact center, and increasingly through mobile POS, sales force enablement tools, and self-service kiosks. A single order pipeline, enabled through APIs and integration tools will enable consistent order processing with security and control.
Enabling complex fulfillment and supply chain scenarios. No longer are orders going to be fulfilled from a single fulfillment center (FC). Tomorrow's orders will be sourced from a wide variety of locations that include that FC, but also include vendor drop-shippers, distributors, stores, and third-party logistics providers who may either regionally stage high-demand products or support seasonal inventory volumes, or both. Business logic and real-time decisioning is critical to driving a high quality consumer experience and a profitable order. The benefits here are multiple, including lower transportation costs and faster time to delivery.
After many months of analysis and hard work, we are very pleased to have published the Global Commerce Services Provider Wave report late last week. As I wrote about recently, selecting the right services firm can make or break your project, and therefore your business. As commerce programs that reach across customer touchpoints get more complex and risky, the process of selecting a services provider has become increasingly critical to businesses' success or failure. Yesterday's relatively simple eCommerce projects have become today's customer experience, business, and technology transformation programs. To help clients find a consulting and implementation partner my colleague Peter Sheldon and I looked at offerings from the top twelve services firms supporting clients in implementing commerce platforms, order management systems, and related commerce technologies.
What we evaluated in each firm:
Channel strategy. In the era of agile commerce, clients need support integrating the customer experience, evolving business processes, optimizing organizational design, and implementing technology across digitally enabled customer touchpoints.