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Eye on eCommerce: Salesforce on how eCommerce will complete its suite of products

Salesforce has been a key player for retailers wanting SaaS-based CRM, marketing and analytics tools, but until very recently it has lacked its own eCommerce platform. Last month, the vendor bought Demandware for a jaw-dropping $2.8 billion, clearly a serious move to provide its customers with a full stack of retail technology options.  

Salesforce.com entered the market in the late '90s and became one of the first successful software-as-a-service (SaaS) players, shaking up the industry with cloud technology, but its acquisition of Boston-based Demandware will  now allow the CRM specialist to offer complementary eCommerce services.

Describing founder, Mark Benioff as an "inspirational" leader, Gavin Mee, senior area vice president for UK enterprise at Salesforce, says the company was created to "bring Amazon-style cloud computing to the enterprise" and now employs 17,000 people across the globe, with EMEA being the company's fastest growing region.

"It's a ubiquitous platform, whatever business you are, large, small, you're going to use exactly the same platform. And it is cloud only, it doesn't have a hybrid model – it's a pure cloud model."

The business revolves around seven clouds: sales, service, marketing, platform, app, analytics, IoT and communities, and Mee says retail touches upon all of these categories, with big-name customers including John Lewis, Macy's and Ocado, to name a few.

But now Salesforce has eCommerce capabilities in the shape of Demandware, its new 'Commerce Cloud' product will be an integral part of its existing 'Customer Success' CRM platform.

But will existing CRM, marketing or analytics retail customers suddenly see its eCommerce prowess and decide to swap out its existing infrastructure to become a complete "Salesforce house"? Not necessarily, says Mee.

He says many of the retail CIOs he has been speaking to are experiencing aches and pains in the eCommerce department, so the acquisition will provide Salesforce with opportunities, but upgrading an eCommerce platform is a big decision to make.

John Lewis for instance, already integrates its ATG platform with Salesforce. "We do four billion transactions a day on our platform and around half are just integration calls into SAP, Oracle, Hybris, or ATG. But how can we innovate around this?" explains Mee, noting John Lewis chose Salesforce to do exactly that.

"But generally in eCommerce, I know [replatforming] is a long cycle of development, and fairly expensive. It's going to be a pretty big consideration to move that way to another technology, some examples would look to that, and some would not. It's not going to be something we will mandate for strategy."

Meanwhile, last week also saw Salesforce competitor, Oracle, enter into an agreement to acquire Demandware's competitor, Netsuite, in a deal valued at approximately $9.3 billion, demonstrating the value of the market as the big players bet serious bucks on eCommerce. The move will help accelerate Oracle's cloud services strategy, helping it compete with the likes of Amazon, Microsoft and indeed Salesforce.

Changing C-level positions in retail

As head of UK enterprise, Mee speaks regularly to retail CIOs, CTOs and CMOs and hears the challenges they are facing.

"If you look at retail traditionally, they would say they have a real blend of technology, old previous generation system of record, which are old and hard to upgrade and expensive to maintain," he says. "Just look at John Lewis, they're going through a massive period of change. The CIO is always challenged: 'how can I move my IT faster to meet the needs of the business?'"

But Mee has noticed in recent years how the role of IT leads in retail are changing and blending with other digital and marketing roles.

"I think the C-roles blend, it's interesting because you'll see CMOs, digital officers, CIOs and I think the roles are changing," explains Mee, who says he is seeing more digital and technology positions on retail boards. "If you put CIO and technology on the board, I think it's a good change, but they have to have a digital and a brand agenda and they have to be able to work very well with the CMO – sometimes you even see them being in the same position."

Mee says he is also seeing CMOs become more digitally savvy. "A lot are getting a bigger voice at the table, not only because of the need for technology and digital but because the customer is becoming so important."

Customer-first

And because more and more organisations are focusing their business around the customer, the way they work internally has to change to become faster in order to keep up with consumer-facing technologies. "The age of big projects is slowing down, being changed by lots of agile projects."

This customer-centric approach has been Salesforce's bread and butter, with its market-leading CRM proposition which has delivered year after year of financial growth. And for retailers, customer-centric means trying to gain a single customer view.

"It's common for retailers to have two or three major systems of record. And what we believe is you want to have that single CRM and understanding, but it doesn't have to be a single architecture and technology play."

Mee says Salesforce customers can have many different platforms which gather customer information – online, in-store, mobile – but using Salesforce, retailers can create composite views into the applications, which is what John Lewis, Macy's and Aldo are doing with the vendor, rather than heavily investing to consolidate their "legacy spaghetti" onto one platform.

"If you go back to some of the traditional IT challenges, you're going to have multiple transaction systems, but how do you bring these things together? And if you're an end-to-end SAP or Oracle house, retailers will use Salesforce as almost this blanket that sits over the top," he explains.

"It's down to their strategy, and where to put focus and resources, because you can't be all things and do all things at the same time," he explains. "Sometimes it's technically and incredibly difficult, you could have systems where you'll find it very hard to do it. But we are finding lots of customers who are doing it because they find the benefit they're going to get from it, in terms of how they can engage and do that personalised experience with the customer."

While Ocado, builds all of its IT systems in-house, the e-grocer is working with Salesforce to develop productivity apps for colleagues, which deliver the same quality of service as a consumer-facing application. Meanwhile, Macy's is all about the front end and scaling its capabilities around peak events like Black Friday.

Looking to the future, Mee says the retail industry will continue to improve and personalise its customer service. He believes using a single customer view, retailers will be able to connect social media feedback with customer orders and react to them in real time.

He describes how if a customer tweets negatively about a retailer, they would not want to receive a generic marketing email a few hours later. "How do you gauge that tension? When you have a customer potentially concerned, annoyed or confused and a customer you want to email and connect with?"

Mee says the future will bring a balance of the two. "It’s the type of thing we're working on and IT generally is only part of the answer, it's going to be about their business process, the way they want to be perceived in the marketplace, in the right place at the right time."

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