Customers.com Technologies

Demandware eCommerce Platform

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

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Our 2009 Update on Key Ecommerce Suppliers and Products

We’ve been publishing quarterly customer service supplier and product updates for the past five years. These reports have been quite well received by our readers and by the suppliers that we cover in them. Now that we have our ecommerce research ramped up to a full set of product reviews of the offerings of the leading ecommerce platforms, we thought the time was right for an ecommerce supplier and product update. The suppliers were a bit reluctant to participate in quarterly updates but were all behind an annual one. So, this week, we publish the 2009 Ecommerce Supplier and Product Update.

Like our customer service updates, the ecommerce update examines the ecommerce market and the customer growth, product activity, and company performance of the leading ecommerce platform suppliers. The leaders are (alphabetically) ATG, Demandware, Elastic Path, hybris, IBM, and Venda. It’s a diverse set of companies with a diverse set of ecommerce platform offerings. There are some similarities. For example, both Elastic Path and hybris offer platforms designed for heavy customization and deep integration. Coincidentally, both also make great use of open source components, and both offer on-premise and hosted deployment. Demandware and Venda are also similar. Both target retailers with a hundred million or so in online revenue. Both offer hosted multi-tenant deployments. The platforms are reasonably similar in functionality, too. ATG and IBM are the graybeards of the space. Both have offered ecommerce platforms since the mid-1990s.

Come to think of it, I’m a graybeard, too. My first product reviews of ATG Dynamo Commerce and IBM Net.Commerce were published in 1996 and 1997. Yikes! That makes me an analyst and an historian.

2009 was a very good year for ecommerce and for all these suppliers across all three dimensions of customer growth, product activity, and company performance. Get the details in the report.

On the topic of those details, I am so appreciative of the ecommerce suppliers’ willingness to share sensitive data about customer growth and company performance. The publicly held suppliers, ATG and IBM, don’t disclose this level of information in their regulatory filings. The privately held suppliers don’t typically disclose any of it. Perhaps all of them wanted to “strut their stuff” after a very good year. Whatever the reason, thanks to all of them. We now have a benchmark to help calibrate ecommerce performance in the future.

Enjoy the report!