The Next Wave of Ecommerce Platforms: Tackling the Omnichannel Challenge
In the last ten to fifteen years, there have been two primary ways in which ecommerce platform vendors have segmented their target customers and differentiated from each other:
- Customer size: small (mom and pop shops selling under $10 million), mid-market (anywhere from $10 million to $500 million in revenue), or enterprise (usually $1 billion and above).
- Customer business model: B2C, B2B, or in some cases, a combination of the two.
However, as ecommerce has matured and grown to be a multi-billion dollar industry, new ecommerce platform vendors are emerging. This next wave of vendors – let’s call them ecommerce 2.0 – are targeting more defined customer segments, such as brand manufacturers selling direct-to-consumer or online grocery stores. What’s more, ecommerce 2.0 vendors are filling a gap they see in the marketplace for solutions that help those specific customer types move to omnichannel delivery.
This next wave of ecommerce 2.0 vendors is heavily funded by private investors and staffed with management teams of ecommerce veterans. Many of these veterans either led some of the largest platform implementations in the first ecommerce wave or worked at ecommerce vendors such as hybris, Oracle or IBM. They are now applying their first-hand knowledge of ecommerce 1.0 technologies as well as the way some of the world’s largest companies implemented those technologies to building businesses competing with their former employers and partners.
As a research firm, we hold many briefings throughout the year with vendors of customer experience-related technologies. The following are three ecommerce platform vendors that for me are examples of the next wave of ecommerce platforms.
commercetools is headquartered in Germany and owned by REWE group, one of that country’s largest online retailers. In the last two years the company has expanded to the Americas, opening offices in NYC and Durham, North Carolina. commercetools’ senior executives held prior management roles at Oracle and hybris and led practices implementing those technologies.
commercetools grew out of its founders’ observation that as eretailers grew in the last decade, they were struggling adding features at the speed necessary to stay competitive. commercetools believed instead that a more flexible, Saas-based service model based on microservices architecture was needed, which would allow for more flexibility and speed in adding new features and distributing product data across channels.
commercetools’ target customer is an omnichannel B2C retailer that is midmarket or enterprise in size. The company has partnered with several major CMS vendors (Adobe, HippoBloomreach, Acquia). As more companies look for help integrating content and commerce, it would not be surprising to see commercetools merge or be acquired by one of their partners in the next six to twelve months.
Kibo, headquartered in Dallas, Texas, is owned by Vista Equity Group. The company is the result of multiple mergers and acquisitions of related commerce technologies over the last two years: MarketLive, Shopatron, Baynote, and Mozu.
Calling itself a “modern cloud commerce platform,”, Kibo’s leadership saw a need in the market for a solution that solved the divide between online and in-store, as retailers struggled keeping up with the speed that sales are moving online. Such a solution would provide a seamless experience for customers wherever they are, taking advantage of the fact that with smartphones, customers carry the point-of-sale with them wherever they go.
Kilo’s target customers are omnichannel retailers and branded manufacturers, mid market and lower-end enterprise in size.
Symphony Commerce is the newest of the group, having launched in 2013. Headquartered in San Francisco, the company is owned by investment firms including Bain Capital, FirstMark Capital, and CRV.
Symphony is offering what it calls “commerce as a service,” which includes order management and fulfillment as well as a storefront. The company sees branded commerce is getting more distributed: more channels, smaller more frequent orders, and less predictable. Branded manufacturers see potential new channels, but don’t know how to sell through them. For example: a sports drink can be sold not just in supermarkets and convenience stores, but also in gyms or at sports apparel stores.
The vendor landscape for ecommerce is changing rapidly, and quadrants and waves are out of date as soon as they are published. If your organization is considering upgrading, expanding, or replacing your ecommerce infrastructure, contact us. We can help you select the platform and implementation partner that best suits your needs.