Target and Toys R Us posted overall sales declines during the holidays.
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Unlike SAP, Oracle and IBM, Demandware doesn't aim to offer a full suite of technologies from logistics to customer service. Instead, its e-commerce platform is built to serve as a portal connecting a retailer's existing back-end software, according to chief operating officer Jeff Barnett. More than 70% of Demandware's customers already use technology from SAP, Oracle or IBM, he says.
"An e-commerce platform is an e-commerce platform, but it's really beneficial when you can integrate with the best technologies of all the third parties," says Naveen Gunti, director of technology for high-end menswear retailer and Demandware client Brooks Brothers Group Inc. In addition to connecting to its existing software, including an order management system from Micros Systems Inc., Brooks Brothers uses about a dozen extensions from Demandware's Link marketplace, he says. The Link Technology Partner program is akin to the Apple App Store, but for e-commerce functionality modules rather than apps.
For instance, Brooks Brothers tried and then installed a module from vendor ShopRunner, which provides free two-day shipping for retailers via a membership program. Because the integration between ShopRunner and Demandware was already built, the retailer was able to launch the service in less than two weeks, Gunti says. Without the Link marketplace, he estimates his technology team would have taken six to eight weeks to customize a ShopRunner extension.
Like many multichannel brands, Brooks Brothers focuses on selling in physical stores as well as online, and in many countries. Retailers are increasingly looking for providers that can manage all their e-commerce sites, both domestically and globally, writes Forrester analyst Zia Daniell Wigder in a recent report. Previously, vendors couldn't offer standardized functionality and support across international sites, she says. But today, top retailers and brands demand it, and they have a better sense of their current and future needs, she says; therefore, vendors that can meet all those needs are especially attractive.
SAP's acquisition of hybris this summer represents the end of a three-year era in which the top vendors built their commerce portfolios, according to Forrester analyst Peter Sheldon. "There will be future acquisitions for sure, but there are few independent vendors left now," he writes in a blog post. "The enterprise commerce space has entered a new phase of maturity."
Despite this milestone, the big players will have to adapt to changing market requirements, including the need to operate more complex technologies globally and on multiple channels, Sheldon says. IBM, Oracle, SAP and Demandware are poised to provide those capabilities. What remains to be seen is which ones will innovate the fastest to provide the best overall service, at the right price, for the largest e-commerce operations.
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