With REWE digital, the REWE Group was already an expert in the complexities of online grocery retail. With flexible concepts such as Click & Collect and the food delivery service, they were exceptionally prepared during the pandemic. When the first lockdown was imposed in the spring of 2020, they were able to double the amount stores offering online services within a very short time – from around 500 to 1,000.
REWE digital, as a long-standing partner of commercetools, has already laid the foundation for successful eCommerce. At the same time, they developed their brilliant fulfillment software in-house. Both components complement each other seamlessly and, thus, enable the brand’s continued success. Dirk Hoerig, founder and CEO of commercetools, gives his insights into the advantages that working with a large player offers a start-up, and how marketplace concepts can be flexibly implemented with commercetools.
Dirk Hoerig, Gründer und CEO commercetools
1. The collaboration between REWE digital and commercetools was particularly intense in the early years. The American venture capitalist Insight Partners is now the main investor of commercetools and commercetools is a completely global company. What lessons have you learned from working with REWE digital?
Dirk Hoerig: In many ways, we’ve benefited a lot. On the one hand, REWE delivery service has been working with our software right from the start, so that we were able to further develop our technology and test it again and again in a very demanding retail environment. While many start-ups start out with rather small-scale customers with simple requirements, we had set ourselves the goal of being successful in the enterprise segment i.e. in the large customer segment. The “online groceries” area, with its complex requirements when it comes to product catalogs, data volume, scaling, order volume, and cross-channel and omnichannel models, etc. covers almost all possible challenges – true to the motto: If you can do food, you can too (almost) everything else.
We had here direct access to a lot of knowledge that we used to further develop our technology. Hundreds of companies worldwide benefit from this today. In addition, we had and still have (REWE digital is still a partner and also a member of our advisory board) professional support and backing for our entrepreneurial ambitions. That opened up a multitude of opportunities for us – such as entering the American market early on and building strategic partnerships, such as with Google.
2. Why is commercetools particularly suitable for marketplace concepts? How do MACH principles simplify the complex processes that prevail there?
Dirk Hoerig: Operating a “real” marketplace is extremely complex. It starts with the connection of the marketplace participants (different product data and structures, different qualities, consolidation of the same items, automation, process management, etc.) and ends with the handling of mixed shopping baskets from different suppliers. These multi-layered processes have to function smoothly for the customer without any loss of quality or service.
Our flexible microservices architecture helps immensely because it enables individual business models to be implemented digitally. You have to imagine the architecture of our platform as a LEGO kit, in which the individual trading functions are not only added brick by brick, but also adapted. In addition, we keep operations agile and limitlessly scalable through our API and cloud infrastructure. And finally, thanks to the multi-client capability of our database, all marketplace dealers can be activated individually – this enables the necessary flexibility in data management. With its architecture, our platform is a good answer – especially for more complex requirements.
3. Nowadays, commercetools exists worldwide. What are the next steps? What are your corporate goals for the next few years?
Dirk Hoerig: We are currently focusing primarily on North America, Europe and Australia/New Zealand, and this is where the greatest growth focus will certainly be in the next two years. Our sales in the USA are already about the same as in Europe. We are very proud of that, because so far only a few software companies from Germany have successfully conquered the American market. We anticipate that over USD $20 billion in trading volume (GMV) will be processed through our platform by 2021. That is about 100 percent more than in 2020 and already at very good values.
We want to become the leading provider of eCommerce software in the enterprise segment by 2023. Analysts like Gartner, Forrester and IDC already see us in the top five – but we still have a lot to do here. In the B2B area in particular, we will invest even more than before. Further data centers will also be added in the next few years in order to be even closer to our customers physically. We will also make one or two investments in the APAC region.
This interview is the third part of our blog series on commerce solutions in the food industry. In part one, you can find insights into flexible software solutions in the grocery trade in an interview with Dr. Robert Zores, CTO at REWE digital and further details on clever fulfillment in conversation with Björn Dröschel, Managing Director Product & Technology at fulfillmenttools in part three.