In conversation with Tom Ebling on the Future of the Retail Business
BY TEMEL KAHYAOGLU
(Published in The Produktkulturmagazin issue 3 2016)
With its software provided as a software-as-a-service solution, Demandware enables retailers to establish a user-friendly, scalable web presence. Tom Ebling, CEO of Demandware, explains the role innovation will play in this highly dynamic market, what the future of the retail business will be and what impact the merger with the industry giant Salesforce will have on the company that was founded in 2004.
An increasing fusion of online and offline experiences can be observed in the retail sector. How do you respond to this trend and which relevant solutions do you provide for your customers?
Our standard portfolio includes an application named “Digital Store Solution”, which retailers can use to provide their customers with additional services. For instance, if the requested colour or size of a specific piece of clothing is unavailable in the store, it can be ordered directly via internet and delivered to the customer’s home. Online customers sometimes prefer to pick up their products at their local retail store. In addition to solutions for this concept, we also provide a service that retailers can use to notify their customers about specific campaigns or offers as soon as they are near a store. Although there are multiple options for this, we use the interface between the physical and the digital shopping environment to achieve optimum customer loyalty.
What sets your offers apart from those of your competitors?
Our unique selling point is based on three aspects. One is something we call “continuous innovation” within our system because it is updated between eight and ten times per year. Our customers benefit from this because they have constant access to a new and improved service. In contrast, other providers have update intervals ranging between 12 and 24 months. Furthermore, we provide an extremely reliable platform. Due to the enormous amount of transactions and an associated annual volume of 15 billion dollars, we have a lot of experience related to maintaining platform performance, and the system itself is highly flexible and resilient. Our applications maintain their speed and stability, even if there are sudden peaks in the amount of traffic and sales operations. Our business model clearly is another significant factor. Due to our participation in sales, it is in our own interest that our customers are successful, grow and generate even more sales. We provide many new features without charge because we believe that our customers and we ourselves will benefit from this – a classical win-win situation. In addition, our Customer Success Managers take care that our platform is optimally used and configured. Customers therefore can give a “customised experience” to their customers based on essentially the same platform. This is our formula for success.
How will the merger with Salesforce contribute to Demandware’s future success?
I am convinced that this will give us another significant boost in growth because it will extend our reach into entirely new markets, both in a geographical and industry vertical sense.
Looking at the development of different ways of advertising, there is a strong trend towards content commerce solutions. In which way is Demandware pursuing this?
For instance, we have used our technology for “buyable pins” on Pinterest. As our APIs enable transactions from everywhere, they can also take place within a content stream. End customers can click on a product and buy it there without having to leave the website. This technology yields numerous innovative opportunities to sell. For instance, one of our customers, GoPro, uses this technology in its so-called shoppable videos.
What about the geographical borders of markets? What distinguishes the German market? Are there any specific features that you or your customers have to consider?
Experience has shown that German retailers are more reluctant to accept cloud-based technologies. Although the German e-commerce market is still significantly behind the US or UK market, it is catching up steadily. Differences can also be observed regarding customer behaviour including online payment. In Germany, customers can buy on account and pay later, which would be unthinkable in the U.S. In addition, return rates across retail are much higher in Germany. Retailers must be prepared for this when they target the German market. Many American companies therefore forego Germany and Europe completely.
How do you observe and evaluate the actions of other companies including Amazon, Player and Zalando?
We are very much interested in such companies because they have an extreme impact on the expectations of the end customers. A small web shop will be unable to keep up with large, financially powerful portals like Amazon or Zalando, with only its own resources. However, with our assistance and technology we can change this. Although we do not run after each trend, we keep an eye on the market and our competitors in order to decide which trends should be implemented because they are interesting for our customers. Nonetheless, we take care not to give up our original focus. For instance, we would not walk down the value chain and deal with delivery logistics although we do have the option to attach new, innovative delivery systems to our platform via an API if we think they are relevant. Examples include UberRUSH, Google Express and other concepts that may emerge in this segment in the years to come.
Could you describe a specific scenario? How will shopping be experienced in the future?
Shopping will feel like stealing because customers entering a shop will not pay at the checkout anymore. Instead, payment will be done by the consumer’s cell phone upon leaving the store. Retailers must be prepared to be present where consumers want them – maybe on WeChat or Pinterest. This “democratization of commerce”, as we call it, will increasingly blur the distinction between marketing and commerce (real transactions). Although relevant forecasts can never be 100 percent correct, we are able to react to these trends very fast. We can transform any developments and trends that we consider as relevant or significant with our technology in order to provide them to all our customers in one go.
How do you invest in your own innovation DNA and sustainability?
First, we motivate our developers to step outside. This includes visiting conferences where they can meet existing and future customers. Apart from learning what the customers at the other end of the platform want, they will ideally come up with new ideas. By presenting those ideas on conferences, they have the chance to get early feedback. This, in turn, allows us to decide whether it makes sense to further invest in these ideas. Hackathons and prototyping also play an important role for these processes. As one of our current main investments, our “Memory Store” is a unified point of sale technology that stores the preferences of customers both online and offline. We will soon provide this solution in Europe. Apart from this, we try to focus on our existing core competencies and to extend them continuously. According to our company philosophy, customer satisfaction clearly is a top-priority objective.
Tom Ebling has been President and General Director at Demandware since December 2009. Among other things, his previous career positions included being General Director of TorrentSystems, Inc. Furthermore, he held various management positions at Marcam Solutions, Inc. Currently, Ebling is General Director of Tracelink, a private biosciences cloud company.
Demandware, a Salesforce company and sector-leading provider of enterprise cloud commerce solutions, enables globally-leading traders to innovatively active in a complex, consumer-oriented world.
Picture credits © Mike Petrucci/Unsplash