Mike Sharp, Chief Product Officer at commercetools, addresses key findings from the Commerce Innovation Report, providing context as to why business leaders still struggle with technology and offering insight into modern commerce solutions.
Last March, as part of the Naysayer campaign, commercetools' first brand awareness initiative, we commissioned a study that surveyed 300 non-technical business decision-makers. Our goal was to collect insights on the digital commerce challenges they face and learn more about how the experiences they deliver to customers align with their own expectations as consumers.
The results were, at best, disheartening. The findings concluded that leaders continue to struggle to deliver the omnichannel experiences consumers expect — ones that can ensure they meet corporate goals and retain a competitive edge — and that the culprit is the technology solutions at their disposal. What’s particularly interesting is that these same leaders are all too aware it’s a huge problem that needs to be solved, with almost three-quarters (73%) of them stating they are “likely or very likely” to take their business as a consumer elsewhere when a brand doesn’t have the shopping experience they expect.
We pulled three key statistics from the report that we’d like to see change and asked Mike Sharp, our Vice President of Product Strategy, to provide some context as to why these challenges still exist, how leaders can solve them to better position their company for growth and future success and what commercetools is doing to help.
The mission of commercetools is to “challenge and change the world of commerce.” And, while by introducing the headless approach and MACH™ architecture as well as spearheading the adoption of composable commerce, we’re successfully challenging the status quo world of commerce, this statistic proves just how difficult it is to truly change it.
Mike turned to statistic #2 to help explain the problem. “One reason business leaders have reservations is that 68% of them think it's going to take three months to even get a new solution or longer, best case scenario.” He pointed out that most of them have only experienced a traditional platform migration. “So, they feel they’re stuck with their monolith system. Their perception is, ‘The last time I replatformed, it was a disaster. It took twice as long and cost twice as much as expected. I just can't do it again.’”
However, as Mike explained, this is exactly why commercetools exists. “The efforts we're leading are to reinvent commerce and reinvent how best-in-class commerce portfolios are put together so that businesses can deliver awesome digital experiences to their customers. commercetools is here to offer a better way to do product development and innovation around commerce capabilities — it’s APIs, it’s composable commerce —it’s flexible, agile, individual pieces that you can scale.”
While commercetools consistently reinforces this message, Mike said the company is adapting its narrative to remove the reservations of business leaders, turn this statistic around and drive positive change. “We have to hear their concerns and then say, 'What if we told you the reality is a little bit different than your perception? What if we have a way to deliver composable commerce that is more pre-integrated across vendors? What if we can bring the right partners that have done migrations from whatever platform you're on today to commercetools and they can ease your journey? What if we told you that you can incrementally stage your migration instead of having to do a big bang? If these things are true, would you still think about it the same way?'”
Because commercetools is built with microservices it is easier for us to choose and select our microservices, integrate them into our current platform and retire it component by component. Its API, headless architecture solved our immediate problem — migrating our 20-year-old monolithic application.
Director of Technology, Nuts.com
While Mike acknowledged that some leaders will still say “No,” he said most know that business success today is largely dependent on constant innovation and evolution and that sometimes they have to take a leap of faith. “Some will say, ‘Oh, that's interesting. Yes, if these things are true and I'll get speed, agility, flexibility and scalability, and save money at the same time, then yes, I’m interested.’ These are the ones that can help us spur change.”
As if this statistic isn’t disturbing enough, about a third (34%) of the respondents claimed that at their company it actually takes six months or more. Why is this? Well, there are multiple reasons, but 31% said it’s because more people are involved in decision-making now as compared to 2019 — and only 7% reported the number of stakeholders has decreased.
In Mike’s opinion, the blame can again be placed on the legacy platforms companies are running on. ”Everything is rigid and tightly coupled inside one big box, so making changes is complicated, messy and has a lot of moving parts. You've got to make sure that something you change in one place doesn't break something else that's happening in another.” Plus, he pointed out, “In this legacy world, every new solution requires extensive change management. If 17 different people have to sign off on the thing you want to do, it lengthens the process and makes any innovation in your business much riskier, so businesses do less of it.”
He added that the architecture of composable commerce establishes an open, decoupled environment. “Instead of working inside an inflexible box, you have individual APIs providing different functionalities. This makes it easy to move very quickly because you don't have to worry about spillover. You don't have to worry about accidentally causing a big problem for yourself downstream because you're not messing with the whole box. You’re interacting with individual APIs that do specific things for you.”
The commercetools microservices, API-based, headless approach makes us faster. We went from releasing updates every 2 to 3 months to multiple releases a week. This helps us meet the needs of the business and keep up with market demands.
VP OF ENTERPRISE ARCHITECTURE, COMMERCE AND INTEGRATION, EXPRESS
Instead of questioning whether such drastic improvements are truly possible with composable commerce, Mike reiterated that leaders should embrace the journey with the knowledge that the risks and the costs won’t be as bad as they think.“On the other side, what you get is more flexibility, speed and ability to innovate than you've ever had before in your business. You get the ability to do daily releases and launch new products in days, not months — that’s how strong the benefits are to businesses.
This sad statistic reinforces the fact that business leaders are clearly aware that the commerce experiences they’re delivering are not on par with their competition. And, it’s important to note the reasons respondents gave as 52% of them shared that their jealousy stems from their competitors having more budget (52%) to deliver innovation.
The thing business leaders often don’t realize is once they migrate to a modern composable solution, they will no longer have to dedicate budget to continually maintaining, repairing and upgrading an outdated legacy platform. When it comes time to consider making a change to a next-generation commerce environment, Mike believes that often they’re just doing an ROI calculation. “They think, ‘Is it worth it? Can I put it off? Maybe I can squeeze out another year on the solution I have.’ Every time they push back replatforming, they’re putting their company at a greater disadvantage.”
This mentality is why it’s important for commercetools to raise the bar on promoting the ROI composable commerce delivers. “Everything about composable commerce helps you lower costs over the long term, but we have to make it easy. We can turn things around by offering a 'have your cake and eat your cake' scenario so businesses can feel comfortable — give them proof that we can lower the risk, lower the effort, lower the cost AND lower the complexity of moving to a best-of-breed commerce solution anchored on commercetools.”
We’ve lowered our operations costs, reduced time-to-market, made it easier to recruit talented employees and vastly improved our mobile experience. We received an award for the best German connected retail solution and…we’re just getting started.
SENIOR MANAGER, NON-FOOD ECOMMERCE, SALLING GROUP
In considering all the findings in the report, Mike said what concerns him most is that business leaders acknowledged not adopting modern commerce solutions is negatively impacting their business. “Customer experience, sales and customer loyalty are all less than they could and should be, and it’s all because they can’t quickly introduce new products, they can’t pivot, they’re just kind of stuck,” he stressed.
“There's a reason why this report was connected to the Naysayer campaign because it’s legacy technology that’s limiting the ability to innovate. It basically proves that business leaders believe what their monolith platform has been telling them, which is, '‘Nope, you can’t do that, it’s not possible, it’s going to take too long.’ — Well, that was the reality at one time, but as I said before, this is why we exist.”
To gain additional insights and get tips on how you can flip the script and help us change the world of commerce, download the 2022 Commerce Innovation Report.