The Forrester Wave™: B2C Commerce Suites, Q2 2020 and Forrester Wave™: B2B Commerce Suites, Q2 2020 have been released. After careful review and analysis, we’ve generated some thoughts and insights on what it all means and reflections on our reactions to the Forrester Wave™: B2B Commerce Suites, Q2 2018.
In less than 2 years, SAP Commerce – the long-entrenched Leader in both B2C and B2B – fell in the rankings to a Strong Performer while Adobe and Salesforce became the new Leaders in both reports. Adobe Magento is especially noteworthy for increasing the strength of the current offer by ~33% in both reports at a time when many providers are not keeping pace with cloud-native products. Insite and Intershop, both Leaders in B2B for 2016 and 2018, posted weaker product strategy scores than in previous reports as the products are being modernized for a cloud delivery model. The recent acquisition of Insite by Episerver occurred after the Forrester evaluation had started, and the scoring reflects individual products rather than a combined offer.
The scoring factors remain substantially the same since 2018, and the high-level weighting is now the same for both B2C and B2B. At first glance, this may appear to reverse a trend toward scoring for separate B2C vs. B2B needs, especially as providers continue to achieve parity of core features for role management, catalog management, checkout, order management, and account management. However, we encourage a deeper exploration of the scoring differences between B2C and B2B including:
Sales channel support for instore and emerging channels in B2C vs. sales rep and service support in B2B.
- In B2C, the ability to support emerging sales channels including marketplaces, in-store, and pop-up touchpoints is 70% of the channel support score. As evidenced by an extensive presence across all sizes of retailers and all categories in the Internet Retailer 500, the offerings from Adobe Magento and Salesforce B2C Commerce (formerly Demandware) should be considered for sellers seeking to support rapidly changing business models, including pivots from omnichannel to pure digital sales, the rapid rise of buy-online-pickup-in-store (BOPIS), and rapid brand launches. Based on a mature and well-integrated product content management suite, SAP Commerce Cloud (formerly SAP Hybris) received the highest possible score based on extensive product feeds to marketplaces and social channels.
- In B2B, the ability to support complex field sales and service reps is 75% of the channel support score, reinforcing the importance of field sales to drive digital adoption. Adobe Magento has a native order management module and integrates well with a variety of industry-specific ERPs, but is not frequently used for complex buyer impersonations or quoting. Salesforce received the highest possible score for sales and service rep support, a direct result of providing seller tools in the native interfaces of the Salesforce sales cloud that many sellers use every day for pipeline management and sales reporting. Despite receiving average scores for seller support, we see robust demand and high satisfaction from SAP Commerce Cloud customers for assisted selling in a variety of direct and indirect models. The scoring in this category should be carefully examined and potentially reweighed for applicability to your situation.
Personalization of offers and experiences was table stakes in 2018, and the ante is increasing. Adobe has stated for years that “people buy experiences, not products” and the Magento product shines for personalization in both B2C and B2B. Our work with Transcat won the Magento B2B site of the year in 2019, and the site boasts highly-personalized experiences across new product sales, pre-owned sales, rentals, and calibration services served natively on Magento. Our industry-leading B2C Magento clients are growing well above industry averages driven by personalization of education, transactional buying, and subscription offers.
- Our B2B enterprise SAP Commerce Cloud customers provide personalization of quoting and buying experiences at scale for millions of SKUs based on selections of bill-to, sold-to, and ship-to locations. After receiving the lowest possible score for B2B personalization in 2018, the Salesforce B2B Commerce offering received the highest possible score for personalization in 2020 based on emerging Einstein (the Salesforce AI engine) personalization capabilities first released in B2C Commerce Cloud. Most interestingly, the new score was achieved without the new Salesforce CMS being included in the vendor assessment. We recommend that B2B customers desiring native personalization capabilities look closely at reference client implementations for evidence of personalization at scale and across industries.
Business intelligence and analytics did not receive the increase in scoring weight that we expected would be required as a foundation for personalization and optimization capabilities in the platforms. In B2C, no provider received a score above average, and all providers appear to have a strategy of enabling rapid integration with 3rd party software to provide enhanced analytics capabilities. In B2B, Salesforce B2B Commerce shines with native reporting provided by the sales cloud. Our recommendation is for customers to place low value on native business intelligence capabilities and as an alternate course of action to select 3rd party business intelligence and analytics tools aligned with desired maturity. In a closely related scoring category, AI and machine learning also did not receive an increase in weight from 2018 and is not covered extensively in this year’s report. While we see extensive interest in AI, our customers are not including AI or machine learning as a primary criterion in platform selection decisions.
The core commerce suite and commerce management capabilities have significant differences in scoring between B2C and B2B.
- In both reports, product information management (PIM) receives significant weighting with only SAP receiving top scores in both B2C and B2B. PIM is an area of obvious need for both B2C and B2B providers but is addressed with differing strategies. In B2C, we see a best of breed approach with dedicated PIM platforms frequently being addressed as “phase 2” and furthering the prior investments in B2C commerce. In B2B, we see a trend toward platforms providing lightweight PIM capabilities, as evidenced by Insite receiving a top score for PIM that will bolster the recent acquisition by Episerver. The entire PIM space is hot in B2B, with significant venture capital investment and Salesforce announcing a partnership with InRiver in 2019 to enhance B2B Commerce Cloud capabilities. We expect that PIM syndication in support of marketplaces will become of critical importance to most B2B manufacturers in the next few years.
- Despite producing a significant share of revenue on most B2C sites and B2B parts sites, the site search capability represents only 5% of the weighted score for commerce management. In B2C, the importance of search-influenced revenue is well understood and the native search engines typically are capable of being customized to produce relevant results with high conversion. In B2B, site search is not always as important as rebuy experiences, but sellers still need a search engine capable of being tuned to selectively index and present content based on authentication. Salesforce was the only provider to receive the highest score possible in B2B search, primarily based on the strength of AppExchange partners Coveo and Bloomreach rather than the native search capabilities. The scoring in the search tools subcategory should be carefully examined for native capabilities vs. partner capabilities and potentially reweighted for applicability to B2C impulse shopping or B2B role-based buying.
The scoring factor for delivery model has increased six fold since the last report and is almost exclusively weighted to API-first architectures and cloud offerings. Most platforms have work to do in transforming the delivery model from on-premise monolith to single-tenant and multi-tenant API on demand. While the end state continues to trend toward multi-tenant Software-as-a-Service (Saas) delivery models, we are seeing demand for the specialized single-tenant and on-premise solutions that can separate data and infrastructure for regulated industries. We expect that the cloud delivery models will continue to dominate in all but niche situations.
The delivery and extensibility ecosystem scoring now places a higher value on extension marketplaces than implementation partners. While we believe that certified extensions offer tremendous value when implemented properly and maintained purposefully, extensions alone cannot solve for the unique business and technology challenges facing modern digital merchants and B2B sellers. Partnerships with experienced agencies and integrators enable software providers to deliver value beyond configurations available in admin tools. This is especially true for long-tenured partners such as Gorilla that were active in the extension marketplaces from the start, continue to develop extensions, and provide development of extensions for other technology partners. In addition to technical leadership for extensions, Gorilla provides end-to-end services in commerce strategy, technology selection, implementation, and operations that complement our partners. We strongly recommend that platform selections include the participation of a trusted vendor partner.
Our thoughts on several of the Commerce Suite providers covered in the Wave include:
- SAP Commerce Cloud fell out of the Leader group despite receiving among the highest scores for strong core capabilities well suited to a variety of selling models. We predicted that SAP would remain a leader in the Wave based on proven scalability, an extensive partner ecosystem, and a highly credible roadmap that includes integrating CPQ. The partner ecosystem for SAP remains strong, and the roadmap is highly credible from being created with partners and customers. We see tremendous demand for the SAP Commerce Cloud across all customer needs including upgrades, replatforming, and new entrants to commerce. As noted by Forrester, SAP Commerce Cloud is undergoing a multiyear modernization into the cloud and upgrades can be complex. The challenges of supporting customers in a variety of delivery models including on-premise and multiple cloud offerings are reflected in a scoring model that heavily favors cloud delivery.
- We predicted that Magento would be a strong candidate to become a B2B Leader in 2020. Our prediction was too conservative, with Magento earning a Leader score in both reports, the highest overall strategy score for B2B, and the highest strength of offering score for B2C. The Adobe Magento product continues to capture market share based on core features, extensibility, a deep partner network, and recognition for the different and unique needs of B2C and B2B sellers. We expect that Adobe will continue to go to market with solutions that combine Magento with Adobe Experience Manager, Adobe Analytics, and the new Adobe Experience Platform being positioned as the best parts of a data management platform (DMP) and customer data platform (CDP).
- Salesforce B2C Commerce remains a Leader in B2C based on a cloud-first delivery model, strong personalization, and extensibility. Aligned with our prediction, Salesforce B2B Commerce is now a Leader, and should have strong consideration from existing Salesforce customers utilizing their sales cloud or service cloud seeking to enable rapid MVPs. Salesforce continues to invest heavily into the product management and development teams to address feature and scalability concerns. In the B2B offering, product gaps in CMS, site search, and site performance can be addressed with proven partners such as Coveo and Bloombreach. Additional integration of native Salesforce sales cloud features such as CPQ or integration of marketing cloud features such as customer journeys into commerce is a natural evolution of the platform.
- Insite and Episerver were assessed individually in the 2020 report, with both providers regressing in scoring compared to previous reports. Insite continues to provide a leading B2B feature set in commerce for small and medium enterprises, although the AI and machine learning capabilities lag competitors. More widely known in B2C, Episerver provides compelling personalization through a leading CMS, while building capabilities in transactional commerce. The combined company will showcase the strength of Episerver’s CMS and Insite’s commerce engine.
What about Shopify?
Despite claiming 1MM customers, annual revenue over $1B USD, and a market cap over $100B, the Shopify offerings are not included in the 2020 reports for either B2C or B2B. We believe the omission of Shopify from the assessment excludes a viable platform for many B2C businesses, especially merchants with low complexity needs. Many of our CPG clients consider Shopify well suited for single brand, low SKU count, rapid MVPs and popup sites. Our B2B clients consider Shopify well suited to address niche needs such as obsolete equipment that may not be well suited for sale on a primary brand site. Forrester does not acknowledge the exclusion, and Shopify was listed in the precursor NowTech Report, so it is unclear why the platform was omitted from these Waves. We expect that Shopify will continue to provide a compelling option for B2C merchants and will continue to develop B2B capabilities, especially for small and medium businesses.