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Demandware Exchange: Go Big or Go Home

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Last week was my first time attending Demandware Exchange, and probably not coincidentally, I picked a good time. The company had a lot of announcements to make, and many were things I typically get very interested in.

So first, if you’re still thinking of Demandware as the little eCommerce company that tends to run the websites of fashion retailers, you’d be wrong. And everything Demandware did at the conference seemed designed to specifically dispel that notion. I can’t speak to years past, but this year, Demandware appeared to be saying it was more than ready for the big leagues, and while that old image is a kind of heritage, it is only a piece of the company’s future.

Bit by bit, Demandware positioned itself to dispel its myths: it’s not just an eCommerce platform, it’s commerce. Not just fashion, but all kinds of retail, and big companies too. And not just a SaaS provider, but a thought leader in the space. Let’s take a look at them one by one.

Not eCommerce. Commerce.

Demandware announced their digital store solution, which is currently a “surround ” strategy for POS. Endless aisle, assisted selling, online ordering, all in an employee’s hands. Maybe not the transaction right now, but not out of the question in the future.

At breakfast the day after the big show-and-tell on digital store, the table where I sat reflected what RSR tends to see from retailers at conferences: the usual glassy-eyed “I stayed out too late last night ” and generally genial but not intensely networking crowd. Except that when someone asked me what I thought was the high point of the day before, and I said the digital store stuff, it was like every person at the table had just been jolted with a cattle prod. Everyone became animated about the topic, talking about how their stores needed it and they were really excited to be able to contemplate a future where they had one view of the customer, but also one platform for interacting with customers too.

Were they ready for it though? Not really. WiFi in stores, the hardware investment of tablets in employees hands, navigating the politics of who gets to define that experience – those were all barriers slowing them down. So the fact that Demandware’s digital store is more assisted selling than mobile POS appears to be fine with them. They’re not quite ready to take on that monster yet. But the idea of it? Another thing entirely, and they were all very excited about dropping the e from eCommerce.

Not Fashion. All Kinds of Brands

For this topic, I think the operative word here is “brands “. The companies that are attracted to Demandware’s platform aren’t just fashion retailers any more, but they are companies that are intensely interested in the customer experience. They don’t necessarily think of themselves as retailers first. They think of themselves as brands. And even if they’re selling hard goods or food, they’re more interested in translating a brand promise into an experience no matter what channel consumers engage in. That’s a solid basis for Demandware’s future growth.

So a warning for those looking to dismiss Demandware as “that fashion eCommerce platform ” – be careful. It’s not as true as you think. And even in grocery, that most laggardly and non-customer experience kind of vertical ( “the best service is self service and we don’t sell online “), there are retailers that are thinking about how to change the game – how to use experience to win, and how to best bring that experience to life in the digital realm. In that scenario, having a solution company with a track record on delivering differentiated customer experiences is going to be very helpful.

Not SaaS for SaaS’s Sake

In the analyst meeting, Demandware spent a good deal of time on the SaaS delivery model. I won’t rehash all the things about SaaS that Demandware emphasized (there were quite a few) but I will pick on two points.

One, I’m constantly amazed at the number of retailers who would rather size their hardware, bandwidth, and content delivery against their largest traffic day (usually sometime in November or December – the days leading up to the shipping cutoff for Christmas tend to get pretty crazy), and then sit on that capacity for the whole rest of the year. Demandware didn’t even mention this particular advantage for the SaaS delivery model – that you only pay for what you use, and your expectation is that your service provider can scale up to meet your demand, even when it’s unexpected. But it appears that part of the reason for this is because customers have moved on in their thinking.

Or rather, moved back. Demandware did spend quite a bit of time talking about leverage and speed of innovation as benefits to SaaS, as well as “managed customization “. In the message they deliver to retailers, it seems they are finding themselves defending against the traditionalist IT viewpoint of wanting to own it, modify it, customize the hell out of it – and then version-lock themselves into expensive and lengthy upgrades that erode a lot of the benefits of buying the software in the first place.

I’m sure I’m somewhat naïve about this, as I no longer live implementations every day, but I thought development and implementation methodologies, supported by new technology architectures, made it possible to implement solutions in a way that enabled customizations more like add-ons, through extensive use of API’s and future-proofed for upgrades. So I’m not frustrated with Demandware’s message about how to avoid making stupid implementation mistakes. I’m frustrated that the message is not being heard. And I worry that it’s the business users who need to hear it most – and aren’t receptive to it.

Beating the Big Drum

I see a lot of user conferences. Some of them are carefully orchestrated. Some of them are focused on celebrating customers. Some are more chaotic free-for-alls that are planned as much by customers as by the vendors themselves. Every company has to decide its approach depending on its cultural DNA, its customers, and what kind of message they need to convey. What I’m trying to say is, when it comes to user conferences, you can classify me as “jaded observer “. I’ve seen Cirque du Soleil performers, I’ve seen people on motorcycles drive onto the stage, I’ve seen a flash mob emerge from the crowd. I’ve even seen an audience turn on the keynote presenter (not me, thank the stars).

I would classify Demandware’s conference as the “carefully orchestrated ” kind. Not that they weren’t there to celebrate their customers – there was plenty of that going on, trust me. And not that they weren’t more interested in hearing their customers talk than their own people. But Demandware had an agenda. That agenda appeared to be to make sure that everyone knows that the company is ready to go big – and is, in fact, well down that road.

Smoke machines and kaito drummers aside, I think I can say, mission accomplished.

Newsletter Articles April 15, 2014
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