While we have seen before that customer experience management technologies are becoming increasingly sought after, running parallel to their development is the development of e-commerce suites that are increasingly sophisticated, that provide multi-touchpoint solutions and that are becoming increasingly agile, according to new Forrester research.
As in other consumer software spaces, the pack is led by a small number of vendors, but according to the recently published "Forrester Wave for e-Commerce 2012 Q3" their position as market leaders is far from secure.
e-Commerce Platforms Adapt
At the moment, the pack is led by IBM, hybris, Oracle and Demandware, but Forrester evaluated ten vendors in detail after applying a list of 75 criteria to an ever-growing market, and says that even though there are four leaders, the other six vendors are snapping at their heels, with a whole bunch of other vendors that didn’t make it into the Wave, jostling to be included.
And with increasing volatility in this market, it is likely that in the coming 12 months there will be considerable changes. In a world where the enterprise customer is king, vendors have to respond to expectations around online, mobile and social interaction capabilities.
Where they don’t respond to these client demands, and where technologies become outdated, less effective and expensive to maintain, those that provide better features, more effective business tools and solution flexibility will become tomorrow’s top performers.
Generally speaking, vendors in the e-commerce space need to provide strong site management, content management, order management and merchandizing tools to win clients.
Forrester Waver e-Commerce Q3 2012: e-Commerce activity
‘Significant’ e-Commerce Platforms
So who are the “significant” software providers in this space, according to Forrester? In alphabetical order they are: Demandware, Digital River, hybris, IBM, Intershop, Magento, Micros-Retail, Oracle (ATG), RedPrairie and SAP.
They are operating in a market where traditional retailers are under pressure to demonstrate even single digit growth for in-store trade, as more consumers are moving to online retailers.
In these circumstances many retailers have also turned online with 56% of companies stating that they will be spending 5% more on e-commerce technologies, and 18% saying that they will increase it by as much as 20%.
e-Commerce Market Drivers
This will be driven by growth in the online and mobile channels, with online sales expected to grow by 12% in the US and Europe. But there’s more at play here than just sales. Among the drivers here is the need for:
- Cross-touchpoint solutions: These are solutions that support retail, but also support marketing and service capabilities across all customer touchpoints. To achieve this, vendors must provide consistent platform capabilities to manage products, orders and customer data across sites, mobile sites, and applications and call center interfaces.
- Increased agility: In the face of an increasingly geographically and culturally fragmented internet -- referred to here as the Splinternet -- businesses are finding it increasingly difficult to market, sell and service customers across it. Even with the rise of HTML5 that will make the design of these experiences easier, it remains a challenge.
- Better order management: Retailers are under pressure now to provide better order management capabilities, which are now considered critical to driving customer experiences. The technologies also need to come with flexible integration with a diverse supply chain, and customer service interfaces.
- Support for multiple businesses and regions: Enterprises are increasingly looking for technologies that provide infrastructure to support multi-sites and multi-brand to businesses. This trend enables more specific and targeted marketing opportunities for customers.
e-Commerce Market Acquisitions
To enable this, there have been a large number of mergers and acquisitions in the space over the past two years. Notable among these is:
- IBM: Big Blue has been very busy in this space having bought Sterling Commerce, Coremetrics and Unica, and with which it has launched an aggressive product development strategy.
- Oracle: Already a major player the CRM space, Oracle has bought ATG, Endeca, RightNow Technologies and FatWire Solutions. It has used these products to clarify marketing and partner messages along with product portfolio rationalization.
- Micros-Retail: Micros-Retail bought Fry Multimedia, integrating the OCP product into Micros and splitting off Fry as a design shop.
- Demandware: Demandware launched an initial public offering, offering its SaaS business model and product strategy up for all to scrutinize and evaluate.
There were other acquisitions too, but these were the principal ones. According to Forrester, it’s not finished yet either. It says while there may not be much to buy, we can expect to see new partnerships and changing relationships as vendors responds to the need to become multi touchpoint solutions providing technology across all needs.
Forrester Wave e-Commerce 2012 Q3
B2C Commerce Suites Evolve
The result has been considerable evolution in platforms over the past two years since the last e-commerce Wave research. The evolution has been driven by customers' changing needs with dramatic improvements and advances in the product portfolio of those vendors that were evaluated.
Generally speaking, they have followed their clients move to, and requirements for, mutli touchpoint e-commerce, but there are also considerable differentiators across all models that were analyzed. Forrester uncovered a market where:
- IBM, hybris, Oracle, and Demandware lead the pack. IBM, hybris, Oracle are currently offering strong e-commerce capabilities as well as providing support for mult itouchpoints and multichannel requirements along with strong business management tools. The Sterling acquisition has put IBM in the lead in the order management space, while, hybris and Oracle are less strong here. Demandware offers a Saas solution with strong multi-site and merchandizing tools, but is still in the early days of development of an order management solution.
- Micros-Retail, Intershop, RedPrairie, and Digital River: All have strong e-commerce capabilities with multi-touch and multichannel capabilities of varying strengths. While they all offer moderately effective business management capabilities on top of this, there is considerable variation in abilities across product catalog management, WCM, order management and support for globalization. Micros-Retail offers strong mechanizing tools along with substantial site and content management tools. Intershop has made significant progress in this area, but is still well behind the leaders. RedPrairie has combined Escalate Retail Blue Martini product with its order management but is still waiting to see the returns for its investment in the e-commerce system.
- SAP and Magneto: While able to provide specific solutions for the right clients, they are still lagging behind the others in the B2C e-commerce space. SAP is unique in this analysis as its products are not meant to stand alone as a commerce platform. Instead it aims to help SAP's ERP/ CRM customers extend those products to include e-commerce capabilities. However, it still needs third-party CMS tools and lacks overall competitive capabilities.Magneto provides an open source solution in the Community Edition targeting small businesses and has had considerable success in this space. Its enterprise edition remains geared towards the small business space too with the extensions of bigger clients not hitting the mark.
This is only the tip of the iceberg. This is a quickly evolving space and like all other similar reports, Forrester recommends looking at all the vendors listed, and not just those that have made it into the Leaders segment.