Customers.com Technologies

Oracle to Acquire ATG

Big news in ecommerce last week. On November 2, Oracle announced its intention to acquire ATG. This is a $1 billion acquisition that will close during 1Q2011 when Oracle buys all of ATG’s stock at $6.00 per share. $1 billion is about five times ATG’s current revenue. The $6.00 price per share is almost a 50 percent premium over recent share prices.

The companies describe the rationale for the acquisition as their approach to addressing the requirement for cross-channel commerce, a requirement driven by a convergence of online and traditional commerce. That approach is a unified CRM, retail and commerce platform. Oracle has the CRM and retail systems. ATG brings the commerce, commerce that includes merchandising and customer service as well as the traditional catalog, shopping cart, transaction processing, and account management.

The rationale makes sense. There is absolutely a cross-channel commerce requirement. Ecommerce suppliers had begun to address in the past two or three years with merchandising, shopping carts, and transaction support on mobile channels, social channels. They’ve also begun to support the contact center channel with offerings that put the standard ecommerce applications on agents desktops with added capabilities for order management, returns and refunds, and account management. ATG Commerce already supported mobile and social channels. ATG Commerce Service Center, an add-on feature, provided contact center support. (We evaluated it in March 2008.) However, ATG Commerce does not provide the marketing, sales, customer service, and account management capabilities of CRM systems. It also does not have the order management and distribution capabilities of retail systems. That’s the stuff that Oracle brings to the deal. In time, a unified, cross-channel commerce, CRM, and retail platform could result.

Aldrich Review of Loomia Recommendation Engine

Susan Aldrich is our long-time search, findability, and merchandising expert. For the past two years, she has been focusing her attention on recommendation engines. That's because these platforms have become an incredibly versatile tool for both B2C and B2B marketers. Once used primarily to boost sales on a Web site (other people who bought this, also bought this), recommendations are now used to provide a personalized experience to small groups of customers, or even to individuals. They are used to support outbound email marketing and other campaigns. They are used to support multi-channel interactions. They are used to provide personalized Web experiences, and to improve navigation. And they are used to ensure that the offers you receive — whether via email or Web serendipity — are the ones you are most likely to welcome and act upon.

This month's in-depth product review is of the Loomia Recommendation engine which is available as a SaaS offering. Loomia's customers include the Wall Street Journal, ABC.es, Thomson Reuters, Time, Harvard Business Review, Travelocity, Fancast, DailyCandy.com, BlogTalk Radio, Audible, and Panasonic.

One criticism Sue has for this current implementation of Loomia is that it doesn't yet support customer segmentation. On the other hand, there's a lot you can do using the built-in business rules and analytics. Another drawback is that there are few tools for marketers to do the tweaking themselves. On the plus side, Loomia is a full service organization and does a good job of continuously tweaking their clients' recommendations to generate better and better results for customers and for clients.

Here is Sue's product review:

Loomia Recommendations
Customized Solutions for Deep Content, Video, and Ecommerce
By Susan E. Aldrich, Sr. VP and Sr. Consultant, August 19, 2010

IBM WebSphere Commerce Version 7.0 Evaluation: A Big Report for a Big Product

This week, we publish our product review on IBM WebSphere Commerce Version 7.0. It’s a big report. It’s a big product. In this report, “We recommend WebSphere Commerce as the B2C ecommerce platform to organizations that have the time, skills, and IT resources required to harness its size, power, and flexibility. WebSphere Commerce is large—large enough to provide everything you need for B2C ecommerce.” We’ve made similar recommendations in our product reviews for previous versions, too. WebSphere Commerce has always been the ecommerce platform with the richest, most flexible functionality, but it has never been the ecommerce platform for the faint of heart or for the light of IT resources. 

But version 7.0 and 7.0 Feature Pack 1 (which was introduced in the middle of our publishing process) include features that really can shorten and simplify implementation time, staff, and cost. The B2C starter store and its mobile implementation are the keys.

The B2C starter store is a comprehensive implementation of WebSphere Commerce functionality delivered through a Web 2.0 UI. Merchants can reuse the ecommerce resources of B2C starter store within their sites or can base their ecommerce implementations on them and customize their features to support their ecommerce processes and their brands and styles. It’s huge step forward from the old and dated Consumer Direct starter store of many previous versions. The Mobile implementation of B2C starter store contains a subset of the functionality in the B2C starter store optimized for common mobile HTML Web browsers.

Recommendations: Avail Behavioral Merchandising

By Susan E. Aldrich
Sr. VP and Sr. Consultant, Patricia Seybold Group

Our analysis of Avail Behavioral Merchandising is our third review of a recommendation solution using our Recommendation Evaluation Framework, Version 1. The target market for Avail Behavioral Merchandising, as for RichRelevance Recommendations and Omniture Recommendations, is ecommerce, especially retail ecommerce. As is often the case, retailers are in the lead in adopting a technology that has so much impact on the customer experience—and on their bottom lines. Recommendations not only deliver the most interesting content in general, they can deliver the most interesting content specific to this visitor in this context. And for a merchant, delivering the most interesting content means enticing customers to buy more now, rather than get frustrated or bored and leave. Avail’s clients typically see revenue increases ranging from 5 to 30 percent per visitor. Not surprisingly, Avail has had very strong growth in the ecommerce market.

Avail Behavioral Merchandising is among the more mature recommendation offerings, on the market since 2001. This maturity is apparent in its UI, which has advanced features such as preview and test capabilities. Avail Behavioral Merchandising also has some unique capabilities that open new possibilities for merchants to work together, including collaborative merchandising and syndicated merchandising. Avail Intelligence is based in Sweden and has mostly European clients, a demonstration of its multinational and multicurrency capabilities.

IBM WebSphere Commerce Version 7.0, Strengthening a Strong Offering

IBM WebSphere Commerce Version 7.0 is the new and current release of the ecommerce software platform offering of IBM Corporation. This is a major new version that was introduced on October 30, 2009. It includes a wealth of new and enhanced capabilities. The scope and scale of improvements is so broad and so deep that we’ve focused this report on what’s new and improved in the offering. The best new capabilities are:

• The B2C starter store starter store is a comprehensive implementation of WebSphere Commerce functionality delivered through a Web 2.0 UI. Merchants can reuse the ecommerce resources of B2C starter store within their sites or can base their ecommerce implementations on them and customize their features to support their ecommerce processes and their brands and styles.

• WebSphere Commerce Version 7.0 has an implementation of the B2C starter store for mobile devices. It offers a completely reusable appropriate subset of the capabilities of the Web starter store.

• Dialog activities is an event-driven marketing and merchandising facility that supports the delivery of SMS and email messages in response to customer activities.

• Social commerce facilities support social media, social profiles, ratings and reviews, and photo galleries via widget-based access to social service providers. They support marketing, merchandising, and community building.

• Integration, a key strength in previous versions, is even better in Version 7.0. Improvements include additional Web Services (exposing all WebSphere Commerce functionality), continuing SOA transformation, improved integration with WebSphere MQ and WebSphere portal, and improved facilities for integration with distributed order management systems.

• Analytic functionality is provided by Coremetrics. Instrumentation is automatic and comprehensive. Many predefined reports are packaged.

Investing in Personal Recommendations

By Susan E. Aldrich
Sr. VP and Sr. Consultant, Patricia Seybold Group

Recommendations are hot—just ask the vendors of recommendation solutions. Recommendations are hot—according to the potential buyers we surveyed early this year. All of our respondents are interested in deploying recommendations at some point, and almost half plan to deploy in the next 18 months.

What are recommendations for? That's a simpler, and possibly harder question. Our respondents have clearly heard the message that recommendations help revenue and improve the customer experience. Interestingly, most North American respondents also see recommendations as a tool for personalization—for the user experiences of both customers and employees. Europeans, famously less exuberant [though not, as we see from the financial news, more rational] think the jury is still out on personalization.

Exuberant Americans will take their recommendation technology any way it's served: home grown, commercial on-premise software, or SaaS. Europeans, who shipped most of their cowboys westward over the past three centuries, do not want any home grown software, thank you very much; leave that "do it my way" impulse to the cowboys. Our European respondents really just want recommendations technology the way technology is supposed to be delivered, via commercial on-premise software. That SaaS thing, hmm, not so sure about that. This reluctance is a shame—what could be better than having a vendor striving to win your love and esteem daily? Even after you sign the contract? The beauty of SaaS, with the loving client care, ease of implementation, and low up-front cost will win the skeptics over eventually.

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!

Venda Enterprise: SaaS Ecommerce Platform

I just reviewed Venda Enterprise, the ecommerce platform from NY-based Venda. Venda targets brand-conscious retailers and businesses selling direct to consumers with annual online revenues from $5 million to $100 million. To date, 140 of them have deployed their stores—hosted multi-tenant/SaaS style—on the platform. Many of Venda’s customers do not have large technology organizations. Business users can configure and do most of the set up for their Venda ecommerce sites. You’ve got to consider it seriously if you’re an online retailer.

I found an advantage to SaaS deployment in my research on Venda Enterprise. In addition to using the product documentation, speaking with customers, and speaking with developers, product marketing managers, and executives, I got “hands-on” the product. Venda gave me credentials to access a sample site that was a replica of the BBC shop. I used the Venda Control Panel (VCP) to create and modify categories and products, to manage promotions, to build Web pages—all the tasks that administrators and merchandisers perform to deploy and maintain a Venda Enterprise site. The experience took me back to when I installed and used every product I evaluated—RDBMS, app dev tools, and ecommerce platforms.

I found Venda Enterprise to be a very appealing platform. It supports most of the ecommerce activities that customers want to perform with packaged, configurable, or easily customizable services and data. It packages a wealth of the mechanisms that merchandisers need to influence customer behavior, not only the promotions and content targeting that we’ve come to expect, but also a recommendation engine and facilities to support affiliates and referrals. Venda Enterprise also packages an almost-complete Web content management system that includes a very large set of reusable Web content items. Web content developers might not be needed to deploy a store.

The platform is not perfect. It's missing reports that you need to monitor, analyze, and refine its rich services and merchandising. Also, it doesn’t support customer segments very well.

My evaluation is more than sixty pages long. Don’t be daunted. It contains the information and analysis that you’ll need to evaluate Venda Enterprise. Here’s my approach. First, I state the ecommerce requirements for supporting customer activities and merchandising activities. Next, I describe and then analyze the platform’s services, data, content, and customizable facilities that address those requirements. The result is a complete, comprehensive, and actionable evaluation. I take the time to understand the product. I don’t ask vendors to fill-out feature-function questionnaires. I don’t rely on their demos. I prove everything we state. No generalizations. No unsubstantiated statements. No fluff.

Venda Enterprise
Excellent Merchandising and Customer Service with SaaS Deployment for Retailers
By Mitchell I. Kramer, Sr. VP and Sr. Consultant, Patricia Seybold Group, February 11, 2010

http://www.customers.com/Venda_Enterprise.aspx

Deep Dive: ElasticPath Commerce—A Serious Canadian Contender for Your Ecommerce Platform

What do these companies and their Web sites have in common?

• Aeroplan

http://www.aeroplan.com/mrch

• Avis Budget Group

• Bond+Bond

http://www.noelleeming.co.nz/

• Comcast

• Comark

http://www.bootlegger.com

• Cort

• Garmin

• Hockey Canada

• Hudson’s Bay Company

• Jaguar

• Netshoes

http://www.shopcruzeiro.com.br
http://www.fascar.com.br
http://www.promo.netshoes.com.br

• New York City Ballet

• OTE

• Sony Ericsson

• Time Inc.

• Trygg Netthandel

• Vancouver 2010 Winter Olympics

http://www.vancouver2010.com/store-us

• Symantec

• Wholesale Sports

They all use ElasticPath Commerce as their ecommerce platform. These companies chose to build their ecommerce sites on Elastic Path Commerce, leveraging its packaged functionality and open source components but customizing its facilities to address specialized requirements. ElasticPath is available in on-premise, hosted single-tenant, our outsourced deployment options. The best fit for this offering would be organizations that want to do customization and integration and are comfortable with Java and open source development, yet are happy to have business users configure and manage merchandising, assisted service, and personalization.

The packaged functionality includes a nice administration and configuration toolset called Commerce Manager (CM). It’s easy to learn and easy to use. Administrators use it to configure Elastic Path Commerce software and administrators and merchandisers use it to create and manage just about every ecommerce resource—customer accounts, products, and promotions for example. CSRs use the tool to perform a wide range of assisted customer service activities. The Commerce Manager tool reduces the role that developers have to play in deploying and maintaining an Elastic Path Commerce store. It allows developers to focus on customizing ecommerce services and integrating external applications.

We found the packaged assisted service capabilities to be quite comprehensive: CSRs can edit orders, split orders, handle returns processing, place orders on hold, remove holds from orders, among other things. Other features worth mentioning:

Elastic Path’s Dynamic Content allows personalization of content and offers based on business rules. On the surface, personalization takes the typical rules-based content targeting approach to personalization that other ecommerce solutions offer, but Elastic Path’s Dynamic Content is easier to use and more flexible and more powerful than other personalization systems that we’ve evaluated.

Merchandising features are reasonably robust, including:

• Product Bundles which allow merchandisers to combine several Products in a single Product offered for one price.

• Price Lists which separate pricing data from product data and allow merchandisers to offer different prices to different customers using pricing rules.

The biggest missing capabilities? There’s currently no support for customer segmentation. While you can target offers based on gender, age and search terms, there’s no way to create reusable customer segments.

Read the full report.