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Shopping for Flexibility inEcommerce Platforms

Speed, visibility, innovation,flexibility and comprehensive

WHITE PAPER | SHOPVISIBLE.COM

Market forces are pushing retailers to reactto consumer demands faster and moreeffectively than ever before. We askedretailers and consumer goods manufacturerswhy they recently changed their e-commerceplatforms and the need for flexibility cameto the forefront regardless of company size,product category, or online sales strategy.

What kind of flexibility? These companiesneed to strike quickly when opportunity arises,

responding to the wants and needs of thecustomerwherever that customer choosesto be.

They also want the flexibility to pursue

market opportunities by swiftly launchinghighly functional sites that specifically targeta vertical market opportunity, a hot productcategory, or a cross-border internationalsale. They seek the flexibility to sell-throughpartners by easily integrating innovative onlineapplications (e.g., social and mobile) into theirgo-to-market strategies.

Perhaps most importantly, retailers andmanufacturers require the flexibility to place

the power to connect with customers into thehands of the business user. Simply put, theywant their commerce platforms and partnersto empower their marketing and sales teams,not limit them.


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Shopping for Flexibility in Ecommerce Platforms 2

COPYRIGHT SHOPVISIBLE LLC | WWW.SHOPVISIBLE.COM | 866 493 7037

Executive Summaryetailers and consumer product brands needthe flexibility to be where the customer is; nowand tomorrow.

Increasingly, the customer is everywherenot just atshopping sites or on Facebook and email, but also oniPhones and Androids and couch-surfing iPads. To bethere, retailers and manufacturers need more flexiblecommerce platforms capable of extending their reachand effectiveness (e.g., via advanced search engineoptimization, marketing, and merchandising tools) and moreflexible technology partners with highly knowledgeable,innovative and future-oriented teams.

This white paper summarizes research conducted with retailers

and consumer goods manufacturers who have recentlyreplaced their e-commerce platform. The research exploredkey catalysts to change their platforms: the timely pursuit ofnew growth opportunities, their previous platforms lack ofscalability and flexibility, and the need for greater control overthe brand as retailer and manufacturers move in sync withtodays customer.

As more customers embrace digital commerce, theevolution of their shopping behavior and their expectationsmakes it increasingly difficult for e-retailers to deliver on

their brand promise.

Brands are struggling to find the right balance betweenbuilding the optimal online-shopping customer experienceand managing the brand experience. This is especially true

for manufacturers and laggard e- commerce retailers; whoare doubly challenged by the need to meet or exceed theonline consumer expectations set by established world-

class retailers.

However, the opportunity to play catch-up and engage todayscustomer is no longer a matter of simply implementing thelatest feature, functionality, cool website widget, or e-commercetechnology. The research found that the bar has been raisedregarding features and functionality that commerce platformpartners offer their online retail clients. As one executive put it,there isnt a huge difference on the front-end to any of them.

We found that this emerging status quo reinforces the needfor greater platform flexibility not just on the front-end but

the back-end as well. The study participants expressed theneed for extended functionalityand cited more agile andcomprehensive integration with order and content managementsystems as examples of ways more flexible platforms couldease their teams workload. To them, platform flexibilitymeans tighter integration with not only the digital hotspotswhere the customers are, but also with their service providers,channel partners, and product suppliers.

What does this mean for the e-commerce industry? Itvalidates what has become increasingly obvious to many:

the shopping experience is no longer just about youre-commerce site. You have to be where the customer istoday and will be tomorrowand your platform has to beflexible, innovative and user- friendly enough to take youthere and lead your innovation not hinder it.

R

The Challenges of Connecting withthe Connected ConsumerThe irony is obviousthe more connected consumers get,the harder it becomes to connect with them.

Mobile devices let the in-store shopper access ratingsand reviews and compare prices while they touch andfeel the goods. Social media connects friends and thelike-minded and lets them all share what they find, feel,and experience. The need to connect with the connectedcustomer is driving retailers and manufacturers to take a

long look at the shortcomings of their underlying platforms,applications, and the other systems that make theseconnections possible.

Too often, managing this technology taxes theresources that they should instead be using to market,merchandise and sell to the customer. A common themeamong those interviewed was that, as retailers andmanufacturers, the last thing that they want to do is to


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get into the software development business.

Inflexible Platforms Mean Missed MarketOpportunities

The research probed into motivations behind changingplatforms and participants spoke first to the missedrevenue opportunity.

The digital sales opportunity is clearly a priority for thesebrands. They want to opportunistically pursue newonline sales initiatives (e.g., quickly launching a rich andengaging Back to School site) or grow e- commercerevenues by connecting with customers off-site (e.g.,via social networks, social commerce sites, comparisonshopping engines, or through online marketplaces).Complicating the pursuit of these opportunities are earlygeneration e-commerce platforms.

Many of the executives interviewed have realizedthat supporting the existing in-house e-commerceinfrastructure is not aligned with their corecompetencies. They understand that the speed ofchange demanded by consumers (and resultingrequirement for faster speed-to-market) does notfit their resource allocation and technology budget.Numerous executives pointed to the web site-centrictechnology foundation upon which they had built their

e-commerce business as an obstacle to future growth.

They discussed the frustration of spottingopportunities (e.g., a surge in the popularity of aproduct among trendsetters or promoting top sellerson Facebook) but not being nimble enough to convertopportunities into revenue (e.g., resources committedelsewhere, difficult to offset build costs).

In many cases, by the time that they could turn on anew digital commerce initiative, first mover advantageshad been lost.

Equally frustrating was the need to deploy additionalresources to keep up with new technologies thathad not been (or could not be) integrated with theirplatform.

Connecting the Brands Promise with CustomersExpectations

Ensuring brand consistency wherever the customer

chooses toshop is anotherchallenge theexecutivesdiscussed.

They spoke tohow inflexibleplatforms canfurther burdentheir companiesincreasinglydifficult tasksof messagingconsistently andof delivering thecross-channel shopping experience that the customerexpects.

Throughout the evolution of shopping, from store-centric days to the rise of web-centric cross-channelshopping, it has gotten increasingly challenging tomove the customer through the conversion funneland to understand which points of influence impactconversion disproportionately. In simpler times, brandsnot only had a good idea of where the customer was,but they also knew what influenced them the most.The brand was ubiquitous because being whereit mattered did not mean having to be in too many

places. It was a lot easier to be customer-centric whenyou knew where the customer was.

Today the customer is the ubiquitous one. Shoppersare everywhere at once, in multiple channelssimultaneously and consuming a diverse collectionof branded and unbranded information through aproliferation of conduits. The influencersbe theysearch and product comparison engines, bloggers,social networks, or social commerce sitesareequally diverse, specialized, and fragmented.

As a result, good retailers take commerce to wherepeople live, work, and play. The leaders with whomwe spoke voiced their continuing concerns thattheir respective brands are still not delivering whatcustomers expectin large part because theirplatforms are too rigid to convert vision into reality.

Their platforms cannot keep up with the customer. Bythe time the latest customer innovation launches, theyalready expect something ahead of the curve.

Platform providerscan no longer be asilent bystander, butmust take on the roleof an active partner



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Driving Demand for New Platforms:Connecting with Channel PartnersThe executives also point to the challenge of integrating

their digital commerce initiatives with commercesystems of channel partners and dealer networks.Manufacturers especially feel this pain point.

The bigger barrier was the need for their e-commerceplatform to scale sufficiently to support existing systemsand both the direct-to-consumer business and thebusiness-to-business commerce processes necessary toserve their wholesale channel partners.

As one manufacturer put it, Our biggest challenges[relate to] understanding the [platform] requirementson an overall big picture perspective. We need to builddirect-to-consumer and business- to-business on oneplatform. So the platform has to be open enough tosupport my big box vendors that want us to drop ship[e-commerce fulfillment].

Other manufacturers mentioned that they still mustmanage issues related to channel conflict. They have

found that the best way to deal with channel conflict

is to make sure they invest in tools and technologiesthat help their channel partners grow their ownonline sales.

These manufacturers want a platform that allows themto sell direct and support the online business of theirtraditional retail partners, as well emerging pureplaychannel partners. They want robust, user- friendlyplatforms with tools that can help them easily and quicklypublish either an entire product catalog or a targetedsubset of the catalog to all of their online marketing andsales partners.

Manufacturers and online retailers that work withcomparison shopping engines, online malls, e-marketplaces, etc. are also seeking comprehensivecommerce platforms that can seamlessly connect them tothese partners. Success in todays business environmentmeans reaching customers everywhere they areshopping online.

Another Customer Disconnect:Organizational and Cultural BarriersMany of the interviews centered on how the inflexiblearchitecture of commerce platforms prevents retailersand manufacturers from taking advantage of sellingopportunities. However, the executives also discussedhow organizational dynamics prevent them fromconnecting with customers.

The manufacturers specifically mentioned theircompanys traditional product-focused culture hinderingthe pursuit of innovative and customer-centrice-commerce initiatives. One e-commerce veteranhired to significantly grow a well-known brandedmanufacturers e-commerce business explained thathe had to first deal with the companys product-centricculture. As a branded manufacturer, we simply haventtouched the customer. When you talk internally, it isvery product- focused around here.

His challenge has been to get his product andcategory managers to broaden their traditionallyproduct- centric mindset so that they can betterappreciate how e-commerce best practices createvalue for the consumer. A flexible, user-friendlycommerce platform could serve as a tangible, hands-on tool to help his team understand the benefits ofa direct-to-consumer online operation and at thesame time connect his brand with shoppers visitingthe corporate website, the online outlet store, itsFacebook site, and other sites out there.

In addition to a commerce platform that could push theproduct catalog to digital commerce partners, he waslooking for easier access to digital tools (e.g., emailmarketing, social media, search engine optimization/marketing, etc.) that his team could use to market and



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sell to customers.

To illustrate the internal disconnect, the executivecited a decision by his product managers to launcha new product on Facebook. The product team didnot initially plan to connect the product launch to the

companys e-commerce site or to the companys othere-commerce initiatives.

A flexible platform would serve as a bridge of sortsconnecting his product-centric team members withtodays customers, who are increasingly lessconcerned about where (or from whom) they buy aproduct and more interested in the product itself.

Such a commerce platform would provide his teamwith the tools needed to build and quickly launch anengaging landing page that would support the Facebookproduct launch and that would also integrate theFacebook promotion with the broader product launchand the overall product and brand strategies.

The Push for Go-to-Market Flexibility is RefiningCommerce Platform Selection Criteria

The idea that a commerce platform now representsa primary means through which a brand can reach acustomer is increasingly resonating with companies. Wefound that this commitment is especially strong among

organizations whose executive leadership is committedto customer-first engagement strategies.

Of all of the platform-selection criteria that emergedfrom the research, this need for a more flexiblecommerce platform that helps companies control theirbrand as they connect with customers came throughloud and clear. One comment captured the sentiment,Were looking for the flexibility to ownthe brand [and not] be at someone elses mercy.

Retailers and manufacturers also want a commerce

platform that does not require them to depend heavilyon IT to implement rich sites, targeted landing pages,robust micro sites, or to push out email and viralcampaigns. The executives want platforms that letmarketers and merchandisers do what they do bestknow where the customer is going and get there ontime and on message. We also asked the studysparticipants to look to the future and share theiropinions on what e-commerce platform providers willneed to address. They spoke of the need for a single

platform withinnovativecapabilitiespre-built into theplatform. Theywant the platform

to provide (orintegrate easilywith) tried andtrue marketingtools as wellas the latestfeatures andfunctionalities.[We need]seamlessintegrationwith marketingfunctionalities.They also want flexible back-end integration tooperational systems such as order management andthird-party fulfillment systems. As one respondent putit, You cant separate the selling machine from theinventory management machine. What executivesdo not want was equally clear. They do not want tooverbuy as some had in the past. Many admitted thattheir in-house market-sizing efforts were not diligentenough and contributed to buying more platform thanthe business required.

When they launch a new platform, they do not want toface the challenges of past implementations: namelydealing with disparate systems; underestimatingresource requirements required during the launchphase; and underestimating the maintenance costs andresource requirements that they will face in the future.

They do not want their platform to be a moat withinwhich their information technology team builds animpenetrable fortress. Although they do want ITto have access to the platform APIs necessary to

innovate and turn on a dime, they also want a partnerwho can do the heavy IT lifting as necessary.

In the end, the consensus among the executives wasclear: platform suppliers need to focus on makingplatforms more functional and easier to use. They wantrobust functionality, but equally important they want theflexibility to change with the market and move to wherethe customer is heading. This is the key take-away fromthe study.

What do future-focusedexecutives expect fromcommerce solution providers?

Quotes like Search engineoptimization requires atremendous amount ofarchitectural considerationand Mobile and social areon the horizon both speak tothe desire for solutions withinnovative capabilities pre-builtinto the platform.



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The executives in the study do not want to have to guesswhere the customer will be tomorrow. Nor do they want tofind that their platform cannot get them there or that it getsthem there too late. They want a comprehensive platformthat keeps them in lockstep with the customer and helpsthem deliver their brand.

They want a partner that understands the future. Theywant a partner that has designed and built a platformfrom the bottom-up; one that is flexible enough tointegrate the tools of continuous innovation. They wanttheir brand to easily co-exist where the consumers live,work, and playtoday and tomorrow.



How can the commerce platformcommunity help my business?

They need to focus on making platformsfunctional and easy to use. Werespending too much time managing thebeast instead of selling!

Conclusion: Knowledge is Power.Flexibility is Strength.

As we spoke with the executives in the study, it becameclear that they see platform flexibility and ease- of-useas the enabler of customer strategies. They know their

job is to get closer to customers and they see the latestgeneration of commerce platforms as a crucial means to

strengthen the bond between their brand and customers.

After years of driving traffic to their websites andspending millions to improve the shopping experience,they see the customer is once again on the move. Theyhave to be where the customer is going and they want apartner to help them get there.

They have learned from past mistakes. Manyexecutives initially overbought, resulting in negativeimpact on company resources. These costly oversightsdelayed market entry and added unwanted costs.

Given todays economic climate, they cannot make thismistake again.

No one has to sell senior executives on the value that

digital commerce initiatives can create. They get it. Infact, every participant in the study said that the directiveto use digital commerce to get closer to the customercame directly from the top.

Use this study to validate how flexible commerceplatforms can help your brand connect with customers,wherever they choose to shop.

Connecting with tomorrows customer will require quickand easy integration with innovative technologies andapplications as well as with critical back-office partners.

Look for platforms designed to offer digital marketersand merchandisers robust yet easy-to-use tools. Makesure your platform can scale up or scale down based onmarket dynamics.

Can a commerce platform help a brand make sure itspromise to the customer is realized? Not only can it doso, it must.

Senior E-commerce Executive


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COPYRIGHT SHOPVISIBLE LLC | WWW SHOPVISIBLE COM | 866 493 7037

About the StudyObjectives

The objectives of this research study are to:

Help understand changing market forces, e-commercestrategies deployed by retailers and consumer goodsmanufacturers, and the role of platform partnerships Understand the process, criteria, and experience thatconsumer goods manufacturers and retailers have undergoneduring recent platform conversions

Methodology

To gain the deep insights that achieving these objectives

required, researchers, strategist, and analysts at J.C.Williams Group and The Research Trust enlistedthe help of senior executives at leading retailers andconsumer product manufacturers. The team held one-on-one interviews with senior executives in July andAugust 2010. The executives interviewed were mainlydirectors and vice presidents for e- commerce anddirect marketing. All those interviewed had undergonea platform change or were currently in the midst of an

enterprise-wide system change.

Interviewee Profile

The majority of companies interviewed earned revenuesbetween $5$50 million. When switching over from theiroriginal platform, the companies were leaving platforms built onproprietary code, moving off another service platform, or hadno previous platform. Most of the companies interviewed hadbeen in the e-commerce space prior to a platform change.

When deciding to switch or purchase a brand new platform,retailers and manufacturers took some or all of the followingsteps: conducting a business assessment; evaluating the

available software solutions; issuing a request for proposal;and/or meeting with a pre-determined short-list of vendors fordiscussions and demonstrations. The final decision-makers inthe decision to make a platform change were typically seniorlevel executives (e.g., president).

The timeframe to implement the platform solutionfromthe time the vendor partner was determined to platformlaunchon average ranged from four to nine months.

About the authors

J.C. Williams Group (www.jcwg.com) is a boutique retail-consulting firm with recognition in the fields of strategicplanning, retail branding, research, technology, and multi-channel retailing. With offices in Chicago and Toronto, J.C.

Williams Group provides practical, creative, and in-depth knowledge of retailing. Internationally, the firm is a member ofThe Ebeltoft Group (www.ebeltoftgroup.com), an international consortium of retail consulting firms.

The Research Trust (www.researchtrust.com), a consulting partner to the J.C. Williams Group and OkamuraConsulting, specializes in the development and execution of best practices programs. Programs include a mix of

strategic planning, primary and secondary research, quantitative and qualitative analysis, thought leadership, marketeducation and communications.

ShopVisible delivers evolving commerce solutions for clients--companies who are seeking better experiences andrelationships with their customers enabled by agile, extensible, and seamless technology. For ShopVisible, commerceis more than a well-facilitated transaction; its an entire ecosystem of people, processes and technologies comingtogether. Our on-demand SaaS commerce platform provides the innovation and adaptive structure to help companies

and their communities thrive everywhere.

Our commitment to innovation and continuous enhancement to the platform is why ShopVisible is the chosen partnerfor companies like London Fog, Tempur-Pedic, Office Depot Canada, and Bluemercury.

Join us on the journey as we evolve commerce. Lets create a thriving ecosystem for your customers and yourcompany together. Learn more at www.ShopVisible.com.

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