Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA Tel: +1 617.613.6000 | Fax: +1 617.613.5000 | www.forrester.com Market Overview: Full-Service eCommerce Solutions by Lily Varon and Peter Sheldon, March 10, 2015 | Updated: September 2, 2015 For: eBusiness & Channel Strategy Professionals KEY TAKEAWAYS Many Firms Don’t Want To Manage The Entire eCommerce Business Themselves A segment of retailers, CPGs, and branded manufacturers are outsourcing all or parts of their eCommerce operations to full-service eCommerce solution providers. Drivers for going this route include a lack of internal resources, selling direct online for the first time, launching new brands or product lines, and entering new international markets. Full-Service eCommerce Solutions Continue To Evolve Full-service solutions have undergone quite a few iterations as the eCommerce market has matured. Today, these solutions are becoming more modular, integration-friendly, and transparent in their pricing models. The Full-Service eCommerce Solution Provider Landscape Is Diverse e vendors outlined in this report are: arvato, BrandShop, Digital River, eBay Enterprise, Newgistics, Onestop, PFSweb, and Speed Commerce. Additionally, this report includes a brief overview of players specializing in particular verticals or markets: Baozun, Mena360, Singapore Post, and Yoox Group.
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Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA
Market Overview: Full-Service eCommerce Solutionsby Lily Varon and Peter Sheldon, March 10, 2015 | Updated: September 2, 2015
For: eBusiness & Channel Strategy Professionals
KEY TAKEAWAYS
Many Firms Don’t Want To Manage The Entire eCommerce Business ThemselvesA segment of retailers, CPGs, and branded manufacturers are outsourcing all or parts of their eCommerce operations to full-service eCommerce solution providers. Drivers for going this route include a lack of internal resources, selling direct online for the first time, launching new brands or product lines, and entering new international markets.
Full-Service eCommerce Solutions Continue To EvolveFull-service solutions have undergone quite a few iterations as the eCommerce market has matured. Today, these solutions are becoming more modular, integration-friendly, and transparent in their pricing models.
The Full-Service eCommerce Solution Provider Landscape Is DiverseThe vendors outlined in this report are: arvato, BrandShop, Digital River, eBay Enterprise, Newgistics, Onestop, PFSweb, and Speed Commerce. Additionally, this report includes a brief overview of players specializing in particular verticals or markets: Baozun, Mena360, Singapore Post, and Yoox Group.
Running an eCommerce operation in today’s fast-paced, highly competitive marketplace is hard, and it just keeps getting harder. eBusinesses must execute many functional areas well — from demand generation and running the website through fulfillment and customer care — in order to drive profitable sales and offer great customer service. Fail in any of these capacities and eBusinesses risk damaging the brand and stifling business growth. eBusiness leaders with limited resources, competencies, and capabilities in-house to deliver on these complex commerce initiatives are seeking partners to manage all or parts of the eCommerce operations for them. This report will help eBusiness professionals understand the landscape of vendors available to manage and streamline any or all aspects of the complex eCommerce processes.
Table Of Contents
What Type Of Company Is Looking For A Full-Service Solution?
Full-Service eCommerce Solutions Continue To Evolve
The Full-Service eCommerce Solution Vendor Landscape Is Diverse
RECOMMENDATIONS
Approach The Full-Service Relationship Like An Open Partnership
WHAT IT MEANS
Full Service Is No Longer An All-Or-Nothing, Long-Term Commitment
Supplemental Material
Notes & Resources
Forrester interviewed and surveyed 11 vendor companies, including arvato, Baozun,BrandShop, Digital River, eBay Enterprise, Newgistics, Onestop Internet, PFSweb, Singapore Post, Speed Commerce, and Yoox Group.
Related Research Documents
The Forrester Wave™: B2C Commerce Suites, Q1 2015January 13, 2015
Commerce Technology Investment And Platform Trends — 2014September 22, 2014
The Forrester Wave™: Omnichannel Order Management, Q3 2014July 29, 2014
Market Overview: Full-Service eCommerce Solutionsby Lily Varon and Peter Sheldonwith Zia Daniell Wigder, Rebecca Katz, and Diana Gold
WHAT TYPE OF COMPANY IS LOOKING FOR A FULL-SERVICE SOLUTION?
eBusiness leaders are under tremendous pressure to deliver in the face of aggressive business growth plans, competitive threats, and digitally-empowered consumer demands. When you add evolving sales and service channels and ever-more global markets on the road map to the mix, even eBusiness leaders with hefty budgets and a do-it-yourself attitude acknowledge that they could use a little help. Together with their counterparts in business technology (BT), eBusiness professionals must work to identify the right external partners to help them win, serve, and retain customers.1
Many Firms Don’t Want To Manage The Entire eCommerce Business Themselves
eCommerce is becoming more important as way of doing business, but the break-neck pace of change in technology and consumer expectations also means eCommerce is becoming harder to manage. A small but significant portion of retailers, CPGs, and branded manufacturers are completely outsourcing their eCommerce operations to a full-service eCommerce solution provider (see Figure 1). Firms looking to partner with a full-service solution typically exhibit some or all of the following characteristics:
■ They are launching DTC (direct-to-consumer) eCommerce for the first time. While eCommerce is table stakes in retail, many industries have lagged behind. Leading CPG firms and branded manufacturers have had eCommerce strategies for years, but many midmarket companies in these industries are just getting started. As such, these firms face the daunting task of building up the eCommerce organization from soup to nuts, including the technology and operational expertise needed to run an eCommerce business. Many of these firms turn to full-service eCommerce solution providers for help getting up and running online for the first time.
■ They lack internal resources. Running an eCommerce operation requires competencies across a slew of functional areas, from demand generation and running the website through fulfillment and customer care. If a firm is lacking expertise, technologies, or resources across any of the many areas necessary to run an eCommerce operation effectively, they can rely on a full-service partner to pick up the slack. Additionally, given the seasonality of most direct-to-consumer categories, firms needing to support spikes in traffic around the holidays but lacking the resources to manage it in-house will look to a full-service partner for a high level of scalability.
■ They want to expand into new markets or launch new brands or product lines. Aggressive business-growth plans translate into road maps and go-to-market timelines that are simply impossible to meet with limited resources. For global expansion, this requires expertise in local consumer behavior and expectations, the appropriate business models for market entry, and countless technology and logistics partnerships.2 Full-service eCommerce solution providers have an ecosystem of solutions, partnerships, warehouses, and fulfillment operations already in flight that firms can plug into and become operational much faster than would be possible independently.
■ They struggle with aspects of eCommerce execution. There is an established tradition to look for third-party vendor assistance with core business initiatives (see Figure 2). Even if a firm has a fully functional eCommerce operation in-house, there are instances where they will look to full-service eCommerce solutions for help. Most commonly, this new partnership can help brands enter into and operate in new global markets or handle particular product lines (e.g., licensed products or brands). Increasingly, however, firms are also looking to hand off core day-to-day eCommerce operations to these full-service partners in order to focus on areas more critical for competitive differentiation (e.g., innovation, research and development, product design, etc.).
■ They have too many cooks in the kitchen. Those firms that have outsourced pieces of their eCommerce operations to a variety of vendors and solution partners over the years are dealing with the headaches of incompatible technology architectures, starkly different business user tools and they are attempting to manage multiple partner relationships at once. These firms are looking to the full-service eCommerce partners to simplify the ecosystem and bring all of eCommerce operations together under one roof.
Figure 1 Firms Using A Truly End-To-End Full-Service Offering Represent 8% Of The Market
Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.119684
Base: 38 eBusiness and channel strategy professionals
“How is your eBusiness/eCommerce platform supported today?”
Note: Percentages may not total 100 due to rounding.Source: Forrester’s Q1 2014 Global eBusiness And Channel Strategy Professional Online Survey
Figure 2 Third-Party Vendors Address A Myriad Of Business Initiatives
Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.119684
35%
32%
32%
31%
30%
30%
26%
25%
Creating a comprehensive digital marketing strategy
Improving products/services
Better leveraging big data and analytics in businessdecision making
Addressing rising customer expectations
Reducing costs
Creating a comprehensive strategy for handlingcustomers’ multichannel activities
Creating a comprehensive strategy for addressingdigital technologies
Improving market differentiation
“What actions are your firm currently taking or planning to taketo accomplish the following initiatives?”
(Hire/outsource to a third-party business/management consultant, digital agency, or technology services �rm)
Source: Forrester’s Business Technographics® Global Business And Technology Services Survey, 2014
Base: 191 to 262 global technology and business services decision-makers who reportedthe initiatives are important for their primary production manufacturing,
consumer products, retail, or wholesale �rm
Firms Outsource Core Commerce Areas To Full-Service eCommerce Solutions
With a keen sense of their own eCommerce technical and operational limitations, firms are looking to full-service eCommerce solution providers to manage the functional areas core to an eCommerce business (see Figure 3). Most full-service eCommerce solution providers’ offerings include taking on some or all of the following core functional areas for their clients, including:
■ Strategy. These full-service eCommerce solution providers are leveraging their experience in running diverse eCommerce businesses to providing business analysis and strategy consulting to help their clients plan and grow their businesses. This can take shape in design, benchmark, and optimization projects across areas like strategic planning, operational processes, and innovation initiatives.
■ Commerce technology, integration, development and hosting. A few full-service providers offer proprietary eCommerce technology. Others build their offerings leveraging commerce suites like Demandware, hybris (SAP), IBM Websphere Commerce, Magento, and Oracle Commerce and order management technologies such as IBM Sterling or Manhattan Associates.3
Core to any full-service eCommerce solution provider’s offering is the management and hosting of these technologies. Some full-service providers are also commerce service providers (or systems integrators) and offer extensive enterprise integration services as well.
■ Merchandising and content operations. While merchandising is an area many firms choose to keep in-house due to a desire to control branding, it is still a functional area some firms struggle to deliver on. Full-service solutions will offer their merchandising and content services teams or partner with third parties to deliver services like content management, banner adaptation, and site administration.
■ Online marketing. Like merchandising, marketing is another area many firms are opting to keep in-house to keep a tight hold on branding. Full-service commerce solution providers will either have in-house teams dedicated to offering digital marketing services or offer these services through partnerships. Services often include: Affiliate network management, attribution, display advertising, email marketing, mobile marketing, SEO/SEM, social marketing, and retargeting.
■ Site design and web development. Most of the full-service solution providers have in-house digital agencies and offer a full suite of creative services such as site design, responsive web design, site testing, and optimization.
■ Content production and photo/video studio capabilities. Many full-service providers partner with third parties for the creation of digital media for marketing or site content. However, some have in-house production studios for the production of video and photography, image editing, and copywriting.
■ Customer care. Most full-service eCommerce solution vendors operate at least one contact center and can manage customer care for their clients. However, specific capabilities supported will vary based on the vendor. The call center services these vendors offer can include: multilingual phone, email, chat, and social customer support and escalation management.
■ Order management. Some full-service providers have proprietary order management technology and others are leveraging solutions like IBM Sterling or Manhattan Associates. Firms are relying on these full-service providers to manage and intelligently route orders across distributions centers, stores, drop shipper partners, and third-party logistics facilities or some combination of these facilities, relying on algorithms to determine the most efficient or beneficial source for the order fulfillment.
■ Warehousing and fulfillment. Fulfillment is a foundational part of any full-service provider’s offering. These providers will operate at least one, but often many, fulfillment centers tightly integrated into their order management systems to offer pick, pack, and ship; delivery; and
returns management. These fulfillment centers are often highly automated and optimized for high scale, efficient pick and pack processing with elastic scalability that few retailers can compete with via an internally owned and operated web facility. Furthermore, full-service providers can also offer value-added services such as gift wrapping, secure storage of high value and hazmat items, engraving services, and other bespoke client needs.
■ Omnichannel experience and fulfillment. Seamless sales and service experiences across mobile, tablet, and PC and flexible fulfillment scenarios are the new rules of the game in eCommerce. In order to keep their clients competitive, these full-service providers are making sure their end-to-end customers reap the benefits of a consolidated, tightly integrated eCommerce operation. This is especially true in fulfillment scenarios where leading retailers have set a high bar. Most full-service solution providers support omnichannel fulfillment options like ship-from-store, ship-to-store, and in-store pickup.
*Online marketing services include: Af�iate management, email, SEO, SEM, retargeting, etc.†Creative services include site design, responsive web design, etc.‡Content production services include copy, video, images, banners, etc.§Digital imaging and video services include studio capabilities.**Order management services include drop shipping, ful�llment center integration, etc.††Omnichannel ful�llment scenarios include store ful�llment, store pick up, click and collect, etc.
*Online martketing services include: Af�iate management, email, SEO, SEM, retargeting, etc.†Creative services include site design, responsice web design, etc.‡Content production services include copy, video, images, banners, etc.§Digital imaging and video services include studio capabilities.**Order management services include drop shipping, ful�ment center integration, etc.††Omnicchanel ful�llment scenarios include store ful�llment, store pick up, click and collect, etc.
*Online marketing services include: Af�iate management, email, SEO, SEM, retargeting, etc.†Creative services include site design, responsive web design, etc.‡Content production services include copy, video, images, banners, etc.§Digital imaging and video services include studio capabilities.**Order management services include drop shipping, ful�llment center integration, etc.††Omnichannel ful�llment scenarios include store ful�llment, store pick up, click and collect, etc.
FULL-SERVICE ECOMMERCE SOLUTIONS CONTINUE TO EVOLVE
Full-service solutions have undergone quite a few iterations as the eCommerce market has matured. Gone are the days of 10-year contracts and one-size fits all solutions. Today these vendors are:
■ Becoming more modular. While there remain midmarket firms that seek to outsource their end-to-end eCommerce operations to partners, there are fewer firms looking for a completely outsourced model today than there were even five years ago. As the Internet has become more important to the business overall, firms have developed pockets of expertise or integrated specific technologies and are demanding more flexible engagement models from these full-service eCommerce providers. In response, these full-service eCommerce solution providers are unbundling their full-stack offering into modules and offering them à la carte so firms can pick and choose the elements of their eCommerce operations to outsource or keep in-house.
■ Being more transparent with pricing. In the past, clients would pay full-service providers a fixed or tiered revenue share on gross merchandise volume (GMV). For firms outsourcing their eCommerce operation soup to nuts, the revenue share rates could sometimes reach a staggering 40% of GMV. Today, clients are demanding transparent, à-la-carte pricing for each portion of the solution and undertaking detailed total cost of ownership (TCO) analysis for each vendor against the option of in-sourcing. Subsequently, the business models of the full-service providers have evolved away from obfuscated revenue share models, to à-la-carte, transparent pricing per service, with usage- or per-transaction-based pricing models commonly replacing or acting in tandem with revenue share.
■ Opening technologies up for integration with best-of-breed solutions. As these providers unbundle their offerings, they’re also making their technologies easier to integrate with through flexible APIs. Additionally, these vendors are prebuilding integrations with select third-party technologies to bolster their own solutions and build out a more robust partner ecosystem — catering to the varying needs of their clients and the technological innovations in the marketplace.
■ Focusing on omnichannel. Delivering a unified experience across consumer touchpoints is a modern business imperative. As such, these full-service eCommerce providers are developing their technologies and services to enable better integrations, data transfers, consistent user experiences, and enhanced flexibility for their clients to keep up with the pace of change in consumer behavior and expectations as well as technological innovation. For firms doing omnichannel fulfillment, the full-service providers have had to create separate pricing for these order types that reflects their lesser role when orders are fulfilled by the retailer’s own store network.
■ Increasingly global. The rapid growth of online users and increased online spending per capita in global markets have online businesses chomping at the bit to reach potential new customers. Full-service eCommerce providers are helping their clients reach more global markets and
continue to build out their global technology partnerships and international fulfillment networks. These vendors are often offering cross-border shipping and/or end-to-end localized eCommerce operations including localized legal entities to navigate customs, duties, and tax requirements.
■ Focused on offering strategy consulting. These full-service eCommerce providers have established eCommerce expertise, built along years of running end-to-end online businesses for clients across platforms, verticals and, increasingly, global markets. These full-service providers are productizing their expertise to offer strategy and consulting services to clients that are looking to tap into a third party to inform business decisions and road maps.
THE FULL-SERVICE ECOMMERCE SOLUTION VENDOR LANDSCAPE IS DIVERSE
The alternative to managing all aspects of the global eCommerce operations in-house is to enlist a full-service eCommerce solution vendor with expertise and established relationships in international markets. There are a variety of vendors in this space with varying offerings (see Figure 4). A selection of vendors with offerings in the full-service eCommerce space include:
■ Arvato. Arvato finalized the acquisition of another full-service eCommerce solution provider, Netrada, in July 2014. Arvato has full-service eCommerce offerings for companies across a broad set of verticals, but Netrada’s focus was on lifestyle and fashion brands, and arvato was keen to bolster its offering in those segments. Arvato builds it commerce services around four commerce platforms: Demandware, hybris (SAP), IBM, and Magento. It has a proprietary order management platform. Arvato is a commerce service provider (or systems integrator), thus enterprise integration and platform development is a large part of its business. The company also has a strategy and consultancy organization, a dedicated digital marketing team, an in-house creative agency, and global fulfillment and customer service offerings. Its global footprint is large: The company operates 110 warehouses across 20 countries and can fulfill to 130 global markets.
■ BrandShop. Formerly known as SureSource, BrandShop’s focus is on delivering the branded experience throughout the entire customer journey. BrandShop’s products include BrandShop Experience Planning, a formal strategy and business methodology for delivering an end-to-end branded digital commerce experience; BrandShop Present, its proprietary Java-based commerce platform; and BrandShop Commerce Engine, a suite of middleware and back-end technologies for integration into customer enterprise systems. Additionally, BrandShop has a BrandShop Delivery Management, its order management and fulfillment offering, and BrandShop Commerce Broker, the prebuilt integrations through which BrandShop extends its offering to Magento or Amazon Web Services’ eCommerce platforms. BrandShop can fulfill to customers in North America and Europe.
■ Digital River. Digital River (DR) started out as an eCommerce technology firm and remains a popular enterprise eCommerce solution. DR has bolstered its offering over the years to provide a full-service “commerce as a service” option for clients using its eCommerce platform. DR has in-house resources to offer its clients marketing, creative, and enterprise integration services. Additionally, because DR also is an enterprise payment service provider, clients can elect to have DR manage global payments, fraud management, tax structures, and legal compliance requirements and have the company act as merchant/seller of record.4 While DR is known for its digital goods customers, the company has 60 warehousing and fulfillment partnerships across the US, Europe, and Asia Pacific and fulfills physical goods to 170 global markets.
■ eBay Enterprise. Since the rebranding of GSI Commerce as eBay Enterprise in 2013, the firm has been executing against a strategy to modularize the components of the former GSI full-service offering, and the Magento Enterprise Edition eCommerce platform is a foundational part of the strategy. The company operates three primary lines of business: commerce technologies (e.g., Magento Enterprise Edition, Retail Order Management, Store Fulfillment); omnichannel operations solutions (e.g., Fulfillment and Customer Service); and marketing solutions (e.g., strategy, design, studio and content services, and its Commerce Marketing Platform, which is a suite of demand generation solutions). Each of these technologies or services is available as independent modules or as a turnkey end-to-end solution. There are no dependencies on using Magento Enterprise Edition. Merchants can leverage Magento’s large partner network for systems integration and web development services. eBay Enterprise operates 12 fulfillment campuses and fulfill to 60 global markets.
■ Newgistics. Newgistics’ heritage is in the returns business where, in partnership with the US Postal Service, it created the Newgistics SmartLabel technology, which enabled the return of online orders from anywhere. By the mid-2000s, Newgistics was leveraging its network to support deliveries as well. Over the last few years, the company acquired AtLast Fulfillment, a fulfillment company, and Tacit Knowledge, a commerce service provider. The company offers its commerce technology offering around Demandware and hybris’ commerce suites and Manhattan Associates’ order management system. Newgistics’ offerings include strategic consulting, platform as a service (PaaS), digital integration (for Demandware, hybris, and other platforms), development and support, order fulfillment, and delivery and returns. All of its offerings are available as a turnkey end-to-end solution or as independent modules. The company has 10 parcel processing and fulfillment centers which serve 200 global markets.
■ Onestop Internet. Onestop Internet’s offering includes digital marketing, a proprietary eCommerce engine, creative development, digital imaging and video, warehousing and fulfillment, and customer service. Included in Onestop Internet’s standard pricing is partnerships with third-party point solutions to enhance and customize its offering for its clients. All of Onestop Internet’s clients are leveraging its proprietary multitenant SaaS eCommerce platform, which it offers on a subscription basis. Onestop Internet consulting
and business strategy teams share best practices and benchmarks from across its client base including KPI measurements, analytics processes, marketing techniques, and best practice third-party technology integrations. Onestop Internet has one warehouse in the United States, one in Canada, and one in China. It fulfills orders from North America and China. Orders shipped to customers outside these countries are facilitated through partnerships.
■ PFSweb. PFSweb organizes its end-to-end solution into four buckets: agency services (e.g., strategy, creative design, and digital marketing), technology services (e.g., platform development and support, quality assurance), infrastructure services (e.g., financial services, customer care, order fulfillment), and technology ecosystem (e.g., eCommerce platform, order management, content management). PFSweb recently finalized acquisitions of LiveAreaLabs, a creative agency, and REV Solutions, a web development firm, both of which support the company’s ability to create digital experiences for clients. Its commerce platform is a Demandware solution, but the REV Solutions acquisition broadens its development expertise to Oracle Commerce so PFSweb can now leverage Oracle Commerce, as well. PFSweb also has a strong global expertise and a warehousing and fulfillment network in North America and Europe, and in Asia Pacific through partnerships.
■ Speed Commerce. Speed Commerce recently acquired Fifth Gear, an order management, fulfillment, and customer care services provider to grow in size and to bolster its operational expertise around fulfillment.5 Speed Commerce offers its end-to-end services around Oracle Commerce’s eCommerce platform, which it hosts and manages for its clients and Speed’s proprietary order management system. Its technology and services are available as turnkey solution or in modules. It can provide its marketing and fulfillment technology/services around other eCommerce platforms if the client prefers. It operates four warehouses and fulfillment centers in the US and fulfills to Canada, Europe, and Central America through partnerships.
There are other vendors in this space that specialize in particular verticals or markets. To highlight just a few examples from key markets, we see:
■ Baozun eCommerce. Based in China, Baozun is a full-service commerce solution provider dedicated to helping brands operate in the Chinese eCommerce market. Baozun has a proprietary eCommerce platform and operates Tmall and Jingdong brand stores as well as WeChat stores for its clients, which number around 90 and include Nike, Burberry, and Microsoft. Baozun’s services include web development, creative, enterprise integration, online marketing, customer service, and warehousing and logistics services. It serves customers in the fashion and beauty, consumer electronics, food and supplements, apparel, automotive, insurance, and home and construction verticals.
■ Singapore Post. Singapore Post (also called SingPost) is a postal and logistics service provider in Asia Pacific. SingPost also has a full-service offering for eCommerce companies called SingPost eCommerce in which it provides eCommerce technology, order management technology, online marketing, customer care, and warehousing and fulfillment services for companies looking to expand into or across Asia Pacific. SingPost eCommerce’s client portfolio includes Adidas, Deckers, and Philips. The company operates 22 distribution centers and four contact centers to support eCommerce in 12 markets across Asia Pacific.
■ Yoox Group. Based in Italy, Yoox Group specializes in providing eCommerce solutions tailored to global fashion and luxury brands. Its clients include Alexander Wang, Gruppo Armani, the Kering Group, and Valentino. Yoox Group runs on its proprietary commerce technology and offers its brand partners commerce platform integration, online marketing services, creative services, fulfillment and shipping services, payment and fraud services, and customer care, which can serve 101 global markets. Yoox offers enhanced visual merchandising capabilities and value-added services that cater to its fashion and luxury segment. For example, it offers online appointment booking, flexible fulfillment and returns, and enhanced customer care phone features like “fashion advice” consultations. In addition to its full-service eCommerce offering, Yoox operates a global lifestyle online store (yoox.com), a luxury online boutique (thecorner.com) and a high-end shoes online destination (shoescribe.com).
We also see providers targeting emerging eCommerce markets around the globe, for example:
■ Mena360. Based in Dubai, Mena360 is a full-service commerce solution provider focused on enabling retailers and brands to operate in the Middle East and North Africa. Its clients include local brands as well as international ones such as Groupon. Mena360 offers website development, marketing services, and logistics and fulfillment for domestic companies looking to enhance their eCommerce operations or international companies looking to establish a presence in the Middle East or North Africa.
Client home markets Global Global North America,Europe
Global
Global marketsserved
130 Greater China Europe 243 (ships physicalproducts to 170)
Verticals • Apparel • Accessories • Automotive• Health and beauty• CE• Digital goods• Healthcare• High-tech • Media• Sports and
outdoors
• Apparel• Automotive• Insurance• Home appliances• Construction• CE• Beauty
• Apparel• Automotive• CE• CPG• Durable goods• Food/beverage• Health and beauty• Home goods• Licensed products
• Digital goods• Branded
manufacturers
Pricing model Can be based onnet sales shares,cost-per-orderpricing, activitybased pricing orreseller models.
Fees and servicemodel with monthly minimums.
Options include:revenue share,transaction fee andsubscription pricing. Modularized pricingoffered for differentcomponents of thesolution. Pricingeconomies of scalealso available assales volumeincreases.
Total annualrevenues
$5.3 billion (2013) Not disclosed Not disclosed $390 million (2013)
Total GMV Not disclosed Not disclosed Not disclosed $30 billion (2013)Merchant of record Yes Yes Yes Yes
APPROACH THE FULL-SERVICE RELATIONSHIP LIKE AN OPEN PARTNERSHIP
While firms may be outsourcing all or parts of their eCommerce operations to a full-service eCommerce solution provider, eBusiness professionals must be careful not to assume they can wash their hands of responsibilities. eBusiness professionals must understand the following before embarking on a full-service eCommerce program:
■ Do a thorough internal audit. You’re already painfully aware of your limitations as they relate to your eCommerce operation (or lack thereof). However, before enlisting the help of a full-service eCommerce vendor, determine your organizational readiness by taking stock of your business vision and aligning the various stakeholder teams along that vision. You must clearly understand the technology ecosystem within your company today, and which systems and processes will be impacted by tapping into the services and technologies of a full-service vendor. Map out the current and future states of business operations, technologies, and finances to inform the vendor selection process. For example, firms should understand their globalization needs and consider the vendors’ support for cross-border shipping or fully localized offerings against those needs. Define what success looks like for you and make sure the vendor you select shares that vision.
■ Establish clear roles and responsibilities and timelines. Be sure to have realistic conversations with your full-service solution provider about roles, responsibilities, and deadlines to set solid expectations across all parties. Mapping out how internal resources will do both jobs at once (their day jobs plus collaborating with the vendor teams) and keeping those resources involved in the decision-making process will help keep everyone, internally and externally, accountable to their mutually agreed-upon timelines and results. Be sure to clearly document all agreed-upon business processes, and the justifications for each, to protect the project against any employee turnover.
■ Outsourcing doesn’t mean out of sight, out of mind. Even if you’re bringing on a full-service provider to manage your eCommerce operation for you, there will be a significant investment of time, energy, and resources to ensure your firm’s digital presence and fulfillment operations are a success. Treat the full-service eCommerce provider as you would a contractor on a home renovation project: keep communication channels open, defined roles and responsibilities, and a crystal-clear vision of the end result.
■ Be prepared to redesign business processes. As digital becomes an integral part of the business overall, your business processes must transition with it. Full-service eCommerce providers are working day in and day out on eCommerce initiatives for their clients. If they can become familiar with your business processes, their expertise with eCommerce will be an incredible asset in your business transformation.
■ A hybrid operational model can balance internal business expertise with third-party scalability. These vendors give clients the flexibility to change their operating model over time as online revenues grow or contract. The unbundling of these end-to-end solutions enables eBusinesses to bring or keep elements of their eCommerce operations in-house, while leveraging the elasticity of the vendor’s operational and technical resources to support changes in business growth.
W H AT I T M E A N S
FULL SERVICE IS NO LONGER AN ALL-OR-NOTHING, LONG-TERM COMMITMENT
Working with a full-service commerce provider no longer has to be an all-in, long-term commitment. The vendors in this space have matured; they fully recognize eCommerce is now highly strategic to their clients and subsequently understand their clients’ desire and demand to in-source and build core competencies around strategy and operations. The à-la-carte menu is real — existing clients are realizing that as their contracts come up for renewal, they can slim down and renegotiate terms and pricing rather than having to go cold turkey and migrate everything in-house onto new untested teams, technology, and facilities overnight.
SUPPLEMENTAL MATERIAL
Survey Methodology
Forrester’s Business Technographics® Global Business And Technology Services Survey, 2014.
Forrester conducted a mixed methodology phone and online survey fielded in July and August 2014 of 1,532 business and technology decision-makers located in Australia, Brazil, Canada, France, Germany, India, New Zealand, the UK, and the US from companies with 100 or more employees.
Each calendar year, Forrester’s Business Technographics fields business-to-business technology studies in 10 countries spanning North America, Latin America, Europe, and Asia Pacific. For quality control, we carefully screen respondents according to job title and function. Forrester’s Business Technographics ensures that the final survey population contains only those with significant involvement in the planning, funding, and purchasing of business and technology products and services. Additionally, we set quotas for company size (number of employees) and industry as a means of controlling the data distribution and establishing alignment with IT spend calculated by Forrester analysts. Business Technographics uses only superior data sources and advanced data-cleaning techniques to ensure the highest data quality.
ENDNOTES1 Business leaders don’t think of digital as central to their business because in the past, it hasn’t been. But now
your customers, your products, your business operations, and your competitors are fundamentally digital. For more of the importance of digital technologies in doing business today, see the March 26, 2014, “The Digital Business Imperative” report.
For more on how to build a highly effective business technology agenda, see the October 10, 2013, “Technology Management In The Age Of The Customer” report.
2 For help identifying the most relevant markets for your businesses, planning effectively for global expansion, building and launching new localized international offerings, and optimizing these offerings over time, check out The eCommerce Globalization Playbook.
3 For more on the B2C Commerce Suites see the January 13, 2015, “The Forrester Wave™: B2C Commerce Suites, 2015” report.
For more on order management solutions, see the July 29, 2014, “The Forrester Wave™: Omnichannel Order Management, Q3 2014” report.
4 For more on DR’s PSP offering, see the November 21, 2013, “Market Overview: Global Payment Service Providers 2013” report.
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