A couple of notes on my product review of Demandware eCommerce Winter '10, the current release of the ecommerce platform introduced in 2005 by Woburn, MA-based Demandware, Inc. Demandware targets companies that generate between $20 million and $500 million in online revenues in the retail, consumer brand manufacturing, and media and entertainment industry segments. To date, the ecommerce stores for about 100 brands of these firms have been deployed on Demandware eCommerce stores. Demandware offers subscription licenses for hosted multi-tenant deployments. License fees are based on a percentage of Gross Merchandise Value (GMV) less taxes and shipping from each transaction. Expect to spend somewhere between $200,000 to $700,000 a year in license fees and somewhere between $200,000 and $600,000 for implementation services. You can see by these license fees and implementation cost ranges that Demandware has customers at the edges of its targets markets.
Ok. So what about the product? Most of the activities that customers want to perform are supported by packaged services. Merchandising facilities are very good. There’s packaged integration with both Certona and MyBuys recommendation engines. Analytic functionality is excellent. Facilities for assisted service are a bit limited.
Two features stand out: SiteGenesis and Active Merchandising. SiteGenesis is the new sample site or started store. It's a combination of an apparel retailer and a department store. Demandware used its experiences with Barneys New York, Nine West, s.Oliver, Jones New York, lucy Activewear, and Timberland to build it, and it includes something like 250 apparel-specific features. SiteGenesis also implements ALL of Demandware eCommerce—ecommerce services for customers and agents, merchandising features (even the integration with external recommendation engines), customer data, product data, and Web content. (Note that the Web content is template-based Web pages built on HTML, a set of proprietary tags, and CSS.) Merchants can reuse every bit of SiteGenesis in their stores, or they can use SiteGenesis as the foundation to their stores and tailor it to their requirements.
Active merchandising is metrics-driven and analytics-driven merchandising, and Demandware eCommerce predefines the metrics, collects the data for them, and continually calculates and updates their values for every customer and every product in an ecommerce store. Active merchandising has 18 predefined customer metrics, including average order size, products abandoned, and lifetime value; and 17 predefined product metrics, including average sales price, look to book, and conversion rates. Yes, conversion rates. These metrics are called Active Data. Merchandisers can use any or all of these metrics to target promotions and content and to control the presentation of search results. Then they can see the results of their efforts in the recalculated values of the metrics. So, next time, they can refine their targeting and start the offer, measure, refine and loop again. It’s fabulous stuff. We’ve never seen anything like it.
Demandware eCommerce Platform Winter ’10
Metrics-Driven Merchandising and a Comprehensive Sample Store Strengthen an Attractive SaaS Ecommerce Platform
By Mitchell I. Kramer, Sr. VP and Sr. Consultant, March 25, 2010
