Webinar | September 30, 2013
In this webinar, "Building Tomorrow’s Digital Experience", Forrester Research, Inc. Principal Analyst Peter Sheldon unveils a roadmap for building an integrated content and commerce platform that is capable of delivering tomorrow’s digital experience.
Hello and welcome to the webinar. My name is David Chiu and I'm the ecommerce strategist here at Elastic Path. This presentation is Building Tomorrow's Digital Experience and today we’ll dive into how marketing content and commerce are all converging into a singular digital brand experiences.
With me here today is Peter Sheldon, Principal Analyst at Forrester Research. Peter focuses on ecommerce technologies and solutions and is a leading expert on mobile and tablet commerce, digital in-store experiences, multi-channel retail, social commerce and digital media.
We're excited to have you join us today, so welcome Peter. At Elastic Path, we build commerce software that powers the next generation of digital experience. We help businesses generate revenue from goods and services using digital customer experiences that range from web stores to mobile apps, emerging devices and API's. We do this for many of the most innovative brands in the world including Google, Pearson, Symantec, Time Inc. and Virgin Media. These companies are all about building tomorrow's digital experiences. We also run one of the leading ecommerce blogs in the world, getelastic.com which can provide you with the wealth knowledge for all businesses conducting digital commerce. Across all of our vertical markets, we at Elastic Path have seen a seen a surge of interest and priorities like blending content management with ecommerce, monetizing rich cinematic experiences and bringing transactions right into digital marketing.
Taking cues from the media contact and technology companies; we've seen many retailers and especially branded manufacturers trying their hand at creating these futuristic digital experiences.
Few people have a better perspective on these developments. Peter is going to explain what it means to build tomorrow's digital experience and help us understand the complex technology solutions that are needed to deliver them. So that, I'm going to turn over to Peter.
Great. Thank you David and it's a pleasure to be back again. So today we're going to talk about Building Tomorrow’s Digital Experience. What does that mean? Well, first of all, if we take a look at some of the inquiry that I've been receiving from our clients at Forrester, we've definitely seen a big uptake take over really the last nine months of clients asking about the question about how to blend and merge ecommerce with web content management.
Now, neither of these solutions are new. In fact, they are both very mature solutions spaces of ecommerce and web content management. But what we're going to talk about as we go through the webinar today is really how we see a path of convergence of clients, manufacturers, CPG's, retailers, starting to understand to deliver truly immersive seamless customer experiences both through digital channels as well as the traditional channels that they need to blend well with WCM and ecommerce together. So, that's what we're going to talk about through the webinar.
Now, why is this happening today? Well, really a lot of this comes down to the power and influence that digital channels are now having on overall revenue for enterprise organizations. And this is a chart from Forrester's online retail forecast in the US and its very interesting view of what's happening in the marketing place.
If we look in 2013, consumers in the US will spend about $3.3 trillion dollars on retail purchases. Now if we break that down by traditional channels, only $252 billion of that will be spent online through a traditional ecommerce transaction where products are purchased online and even digitally delivered or delivered to the consumer's home. And that accounts for depending on different retailers somewhere between 8 to 10 percent of total revenues. So that remaining 90 percent is typically spent in a traditional brick and mortar or offline channels. For retailers, it's revenue that's recognized at the point of sale.
Now if we break down however, that 90 percent of the revenue that happens at the point of sale, we see that a large portion of it is going to approach 44 percent of total spend is influenced by the web. Spend happens through traditional channels that is influenced by the web. Now, what do we mean when we talk about influenced by the web? These are consumers who use digital channels who research products online, who research dealers, stores, who looked at maps and information, who read product ratings and reviews and so already many retailers seeing that almost half of their offline purchases are being influenced by research the consumers have done. And in some verticals, like automotive, that number is much closer to say, 99 percent. No one buy today without having done significant product research through digital channels through online tablet, mobile, etc.
Now today, online stores have really played the role of being a catalog. And they generally follow a very predefined paradigm. We've really had this from day 1 from the early days of Amazon. And it's really been inherited across many many ecommerce sites that we have this some sort of predefined work flow.
The customer comes to the site, they do a product search, they browse, the refine their result, they look at their product information on a product page. They click at the cart, they go through the cart, the go through the checkout process and they purchase.
And most online retailers, although there are significant variations and look and feel and experience, follow this sort of base paradigm of having a traditional ecommerce work flow. And really the ecommerce site today is a glorified digital catalog of the products and services that retailers and manufacturers have to offer.
Now, if we start to fast forward though to what's happening in the marketplace, many brands today, many marketers are really seeking more than just an online catalog. Today, many brands are craving the glossy magazine. They need to deliver deeper experiences and build a deeper relationship with the customer through these digitals channels.
And this is a great example of one fashion brand, Louis Vuitton, that’s done just this and if you have a look at their site today, it's a very brand and experience-led experience and doesn't necessarily follow your traditional ecommerce paradigm. There's a lot of use of video, full screen imagery and like I said, it's a very immersive experience.
Today, the marketers of today are really trying to tell stories through their digital channels. When we say stories, they are trying to integrate with rich media. Create an interactive configurator. Integrate social into the online channel, perhaps into gamification. And they really need to go above and beyond the standard paradigm of browse, view product, add to cart. And they're really trying to embrace a consumer and tell a story about the products and services that they are offering.
And they're also trying to romance the customer. And what do we mean by romance the customer? Well really trying to create a more personalized environment. We've been talking about personalization in relation to ecommerce for many many years. And if a lot of retailers have some fairly sophisticated personalization experiences.
But we're really talking about going further than this now. We're talking about actually being able to identify me, Peter, as a returning customer. And not just to put my name in the header but to know everything about me. To know not only what my preferences are, and what I bought through the online channel but to know my entire interaction history with the brand across all channels and to really target the experience specific to what the organization knows about me.
And so organizations want to be able to provide a lot of rich information from their loyalty systems and customize the experience based on my loyalty to the brand and they want to be able to continually change the experience and then feed personalized specific offers to me as a consumer. They want to be able to test different content with me. They want to be able to do this very very rapidly and on the marketer's terms, they don't want to be constrained with traditional IT releases and schedules that IT have.
And so, what we have found today though if we look at a lot of manufacturers and if we look at their online presences, for example, is Canon. If you go to canon.com, what we have is really a segregation between the experiences that marketers have built and this is the .com site, which has all of the product and services, information about Canon across all of their product lines and across also division, but you can see on the bottom right hand corner, we have a link here for a shop direct from Canon and that that takes us to a completely separate online store.
And this is in fact incredibly common where we see the segregation between the marketing site, the .com and the store which is typically not only on a separate URL on a store.domain or a /store domain but also we found commonly that the experience is very very different and there's clear segregation between the two areas of the site.
Now if we talk to organizations like Canon, they know this. And in fact, they know that having 2 separate sites is potentially confusing for their customers. But this is something that they were almost forced in to doing. And this situation is by no means unique to Canon. In fact, it really impacts many many manufacturers, CPG firms, and even retailers in the market today.
The challenge here was that as an organizations like Canon went from being sort of a traditional B2B company serving their dealer network and providing a traditional set of B2B sales channel, over-time, they've evolved to become a B2C retailer. They've become the retailer. They've open the direct channel and they've opened up the direct communication with the consumer and so what we see today as I went through that evolution, I needed to evolve quickly and build that direct to consumer ecommerce experience quickly and so that led to selecting separate ecommerce platform.
And even if they had wanted to try and bid commerce into their core site, to be honest, most of the content management platforms in the past, and this is still the case today lack credible commerce experiences making it very hard for manufactures to embed commerce and purchase work flows directly into their existing .com sites.
And so at the heart of this, really lies organizational issues. On the challenges of organizational structure, many ecommerce teams often live in a silo and live away from corporate marketing. Now there is commonly some sort of dotted line accountability and some collaboration between corporate marketing who traditionally owns the .com site but the ecommerce team who owns the store generally has their own merchandising and marketing team who's specifically focused on the online store.
Quite often we find strategically these organizations really don't collaborate and that the core branding teams and core marketing don't necessarily pay a whole lot of interest and what the online channel is doing and vice versa. And so as a result of this, they’re typically in silos and typically using different technology solutions. Ecommerce teams are generally using ecommerce platform and the corporate marketing teams are generally using an enterprise web content management system or portal to manage their site so we end up with this segregation and it's caused by organizational silos rather than issues with technology that's certainly both to blame.
So as a consequence of this, we end up seeing set of dysfunctional things start to happen. I thought I'd show the image of this story recently for a Chinese professor in Beijing who has decided to build his own rock house or rock mansion really on top of this apartment building. Hilarious story because he didn't get any permission from the authorities to do this. He just went ahead and built this rock house on top of this apartment and eventually caught the attention of the media and got a lot of complaints from the residents and now he's been asked to rip it down with a significant cost to him.
But this is exactly what we’re seeing in online digital experiences. We have ecommerce teams who want to and need to build their direct to consumer channel and are going off and doing their own thing, building stand alone stores. Likewise we have marketing groups who are building micro sties, landing pages, blogs, forms, communities and doing this again without thinking necessarily about the impact on the overall customer experience.
So we end up starting to see a lot of dysfunction as it relates to our total universe of web properties. And one example of this to show quickly is Caterpillar. Now, if we go to the Caterpillar site, they are a large million dollar organization that has many many different divisions and operate 50 in plus markets around the globe. But if we get a close look at their actual .com site, here we have the landing page. This is owned by marketing, this is typically running on an enterprise web content management platform.
But we start going into the sort of main navigation along the top, we find that the parts catalog now is also much more of a sort of B2B commerce capability serving their distributors. Their dealership is an entirely different experience. It opens in a new browser and really has very little or no commonality to the main corporate marketing site. It clearly runs not only a different technology and platform but was built in a different year by a different team and this is no consistency whatsoever and this theme continues as we go through the other business units and the areas of the site. When we take a look at the catused.com, so this is a second-hand equipment. Again, completely different platform, completely different look and feel. Again, no consistency. We take a look at their rental business again, completely different platform again. No consistency. When we take a look at the consumer business, this is for their power and consumer goods and again completely different platform.
And this is not uncommon. At first, I had the opportunity to speak every year to hundreds and hundreds of executives from manufacturing firms like Caterpillar and it's really just sort of a grown out overtime when they have multiple platforms and systems and different sites learning on different platforms. But really the impact on this on the customer can be quite substantial. When we think about the customers' life cycle, as they go through the discovery phase of how they find out about their brand, as they engage and explore.
Whereas a brand and they explore products and services, they go through the purchase decision and the decision to buy from us and then they continue to engage with those purchase, this should be a completely seamless linear process. They need to be integrated. And I think the big challenge when we think about this conundrum of ecommerce and web content management is the peace between the exploration phase and the buy phase is often broken. And that is where we see this disconnect. Where from the consumer's prospective, they shouldn't really be consciously aware that they have gone from a discovery and an exploration phase of reading and learning about your products and services to the point where they then make a purchase decision and by segregating the experience, you really sort of force that upon them and it becomes very conscious for them. They are going now into the separate phase of purchase and it's really breaking this continual life cycle.
Now, we're going to switch gears a little bit and take a look a little bit deeper into some of the technologies that the organizations are looking at when thinking about sort of next generation digital experiences and the next generation digital platform.
Now, this is from a recent survey of e-business and channel strategy professionals that was taken in May. And here we ask them what are your top technology investment priorities over the coming year. As you can see, there is a long laundry list of technology solutions and platforms and organizations are working on. And some of these things are being done in parallel but what are these will take multiple years for them to get to implement these phases.
But what's very interesting is to take a look at the number 1 or number 2 priorities is the replatforming of the underlying infrastructure of the ecommerce platform and the web content management tools. There are still many many clients out. They are specially outside of core retail when we look at manufacturing and CPG and other verticals that have either legacy or home-grown ecommerce platform today and these are mission critical systems that are really lacking scalability to support the business as an online channel grows and so there's a lot of firms who are very much or almost at a point of crisis of having to replace and replatform their ecommerce platform.
At the same time the marketers are looking to replatfrom the web content management platform to make sure that they have the tools needed to deliver a truly next generation digital experience and make sure that they have all the levers and controls to be able to control that experience themselves independently from IT. So though there are other initiatives like Omni channel, the multi-channel integration, and CRM, and big initiatives too, I think it's very interesting to see that ecommerce and web content management are right up there is to the most important priorities among e-business and channel strategy professionals.
Now, when we think about building a next generation digital commerce, or digital experience platform, it goes way way beyond just buying and implementing an ecommerce platform and a web content management platform. When we look at what's needed end to end in terms of controlling the on-site experience, we see straight away that there are many many different solutions and systems that organizations must invest in from their A/B testing, from their web analytic, site search, digital asset management to manage all that rich content, media and images and so forth, recommendation engines, social platforms, etc. And it's like uncommon to find today that corporate website, like Caterpillar may have easily over 20 different integrated solutions that are involved and delivering that online customer experience. And these integrations are typically fairly complex in nature some of them are done at the front-end through Java Script injection; some of them are done at the back-end. But this is really about building a cohesive suite of solutions that will deliver a next generation digital experience online and then behind the scenes you know, from on and off-site perspective and customer service, there's a whole another set of solutions that need to control the entire life cycle of the customer experience.
And if we delve a little bit deeper into some of these solutions, we see that not all of them were created equal. This is Forrester's technology radar for digital experience solutions and we can see here that some of the platforms like web content management. I have seen significant success, very very high adoption rates in the market and they're really going through a continual set of growth phasees like I mentioned a moment ago. Many organizations are needing to replatform even their legacy or home-grown content management system. Similarly ecommerce really at the same phase of maturity. Not necessarily as widely adopted as there are still many manufacturers and websites out there that haven’t yet opened a direct consumer channel and so don't have transactional websites.
But if we look at some of the other areas on here, like for example on the bottom left product content management, becoming an increasingly important area for organizations to invest in. But it's still in the sort of fairly early phase and adoption is relatively low but it is increasingly important especially manufacturers with millions of parts. Retailers wigth potentially millions of skews need to manage that content and govern that content and so when we think about building the next generation digital experience, you know, this isn't just about 1 or 2 platforms. This is about designing an architecture, an effectively a technology road map that embraces potentially all of these solutions in an integrated fashion. And really although there are certainly vendors that offer, most of this in the sort of one throat to choke, the reality is that most organizations are looking for best of breed. The second best is not good enough. They really wanted to choose the best solutions in the market place from all these categories and this is driving a lot of investment and a lot of integration for system integration firms and digital agencies who are helping clients bring all these together in a cohesive fashion.
Now let's go back and talk about like the topic of the webinar today which is ecommerce and web content management. Now as I said, these solutions have been around over a decade in their respective rights but what we've seen over the years is that they've both been investing in what we can call engagement features. These are the abilities respective platforms to deliver the experience. Now it used to be through a website. Today, it's for multiple touch points, mobile, tablets, apps, the website and other touch points.
But both of these platforms today we see that there is a significant overlapping capabilities both of these platforms can control the presentation layer, can control navigation and search and personalization and recommendation and merchandising. And so, but at the same time, they also have unique capabilities. The ecommerce platforms are responsible for typically the product catalog, the pricing, the promotions, coupon and the order management, the servicing of these orders, post submission, where as the web content management platforms are typically very good at managing content services, content creation, workflow, rich media images, video, assets, social communities, the A/B testing, the email marketing.
And so there are strengths and weaknesses on both sides but what's become a challenge from any organization is they look to build the best of breed next generation digital experience and they look at these 2 solutions. They do find strength and weaknesses and ultimately it often comes down to choosing which of these 2 systems should we go with or in fact, should we be investing both of these and if we do, then which of these 2 platforms will be responsible for the engagement. Are we going to use our ecommerce platform to drive personalization or are we going to use our web content management platform to drive personalization which you'd in fact will try and integrate the 2 personalization engines together. And this is a really really substantial challenge that is facing our industry today. Let's take a look at a little bit of a closer look about how organizations are going through these decision workflow.
So, the question that they I often get through inquiry from clients we're doing an ecommerce platforming project toward rebuilding our corporate website. And we've been looking at web content management platforms and we've been looking at ecommerce platforms and we really don't know if we should be buying both for 1 or the other. And there is no right or wrong answer to this question but we can certainly ask some question that drives us toward determining if one or the other alone will be sufficient. And so when we go through some of these questions, one of the first things is to understand what are your online revenues? If you're online revenue is Euro, you don't sell anything online or -- channel. And maybe you don't need any ecommerce platform or maybe you know, an open source or a home-grown ecommerce platform will suffice. But if you're doing hundreds and millions of online revenue, or your online revenue is 10 percent or more of your total revenues, then the ecommerce platform is going to be absolutely critical to you.
Similarly how complexity of products do you have? Hundreds of thousands of parts and products that need strict governance and management in a structured manner or do you just have a handful of products because you're a manufacturer and you only have ten core products again, this will influence your decision. How are the things that you're selling purchased? Do you have a shopping cart paradigm? Our customers are buying more than one thing at once. Are they adding them to a cart? If so, it's totally a very good fit for an ecommerce platform. But if I'm an airline or a hotel chain, then the way that I sell isn't necessarily through a sort of standard ecommerce check out paradigm and in fact I may have a very very costumed unique tailored buying experience that an ecommerce platform that won't really deliver for me anyway.
Who traditionally owns the site? Who is responsible for the .com. Hopefully it's a shared ownership across different business units. But in many cases, the e-business team or the digital marketing team may really be the owners and may have more influence over these decisions as to investing in an ecommerce platform or web content management platform.
Next one, product discover is really really important. How do your customers shop? How do your customers find your product and services? Do they come in and sort of see that's greatest assortment of product and sort of traditional grid ecommerce format. And they're effectively spearfishing and very rapidly through using search and -- navigation. They know what they want and they just want to come in, stick the spear and add it to the cart and purchase.
Or having much earlier on in the purchase life cycle and do they need to be romanced and do they need to buy in to the brand and really go through a deep potentially multi-day, multi-week, multi-month engagement process where they are coming back time and time again to your site to watch video, to read social content, to download collateral and in that case, it's probably much more of a sort of storytelling type paradigm that is required.
We take a look at a few more of the sort of things that the organizations are considering when making this decision. We think about campaigns how frequently are you reaching out to your clients? And what are those campaigns? Are there continues new product launches and offers that require micro site and landing pages. So if that's being done on a very very frequent basis, then it made linear more towards the WCM to where it is imperative for the marketers to have control to do this. Almost on an hourly daily basis.
Also think about your content. If all your contents is centric around the products that you sell, and is really by product images, and product descriptions and technical specifications, then you're definitely going to need a structured ecommerce product catalog or PIM, Product Information Management system but if a lot of your content is more sort of an engagement content, video, interactive content, product configurators, guided selling tools and so forth, WCM platform maybe a better fit. Which touch points do you need to support? Both ecommerce platforms and WCM platforms will support mobile and desktop and tablet. But if you need to be able to do print catalogs. If you need to be able to support channel partners and other parts of the organizations with rich media content, then a WCM platform maybe a better fit.
And then finally, how you are communicating to customers. An ecommerce platform is typically a very good ascending order confirmation emails, they follow up reminders and so forth. But if you really need to get deep into sort of social personalized targeted content through email and apps and other communication mediums then a WCM platform may be the right fit.
Now the key here is it is very very hard and if you use this model, you will probably find there are multiple text boxes on both sides. And this is really what's driving this is that most organizations today or many organizations today are saying well, using a model like this we're finding that we have multiple tick boxes on both sides of the equation. And therefore leaning towards a decision that says we should be using an ecommerce platform and WCM platform is fine. However there are obviously cost complexity and time to market issues with that. And so if you have a few tick boxes on one side or the other, then you may want to consider perhaps using lighter weight solution like an open source solution for ecommerce or for WCM rather than picking to large enterprise solutions. Or if you have no tick boxes on one side then that's a clear indicator that you probably should not be investing in that side of the equation.
Now if you do decide that both in owning an ecommerce platform and a WCM platform is the right thing for you then there are multiple integration options. I will have you to quick a look at the easiest and quickest way to market is to do a side-by-side or hybrid approach. Where we are actually using these platforms as standalone platforms and in fact this is a situation that many companies like Caterpillar and Canon that I referenced early in today that they're using a side-by-side hybrid approach. So both platforms are responsible for delivering the experience of rendering the HTML to the site and typically the WCM platform is doing the discovering and exploration phase of the site. So the homepage, the category navigation and the product pages, and then the eComm platform is basically empowering the purchase workflow to buy the check out process.
And usually we see organizations trying to do some sort of front end integration. Making the templates looking for you using the same CSS. Perhaps doing a single sign on integration so the customers don't need to sign in twice and making a nice sort of seamless pop up for add to cart and we certainly see some organizations actually manages quite well where even though behind the scenes as separate platforms the customer experience appears fairly well-integrated and the customer isn't exposed to these complexities. So this is a great starting point. It's certainly from a cost and time to market and complexity perspective the easiest of the options.
Now the second option is to let the ecommerce platform play the lead of delivering the experience. And so here we get really an integrated site. The WCM platform is not delivering any pages to the website. In fact, the WCM platform really takes a bit of a backseat and is really playing the role of being a content repulsatry where we create and manage content, and were we store richer media assets, images, videos and so forth.
The challenge I think for this approach is that there are many of these enterprise ecommerce platforms on the market today have the content targeting and recommendation engines and can deliver really rich immersive combined experience. I think the challenge for organizations here is really wherever they are going to get valued from their WCM platform investing in enterprise web content management platform just to play the role of being a content repository can in fact be a very very expensive approach and they're still considerable complexities of integration integrating these two systems together.
So we certainly see organizations have taken this approach. But I think this approach is certainly in decline and we don't see as may organizations taking this approach today. And really I think the top tier approach here is to let the web content management platform play the lead in terms of delivering the experience and so all of the pages of the site, from the homepage, the search, the discovery, through to the check out and the cart are all delivered by the web content management platform. And therefore the marketers and the merchandisers have control over the experience can do A/B Testing and personalization and can make content changes in a very dynamic drag and drop nature. So they can go to a check out page, redesign the workflow, using the drag and drop for example and to be able to make changes without requiring any IT releases.
And so this way, in this approach, the ecommerce platform is playing a critical role. It is still the system of record for all the pricing, the product catalog, promotions, payments fraud, all of the inventory information and is exposing these through API's typically through web services or maybe there's an SOA integration layer and the WCP platform is consuming services from the ecommerce platform and then wrapping those services up into its own templates and applying its own personalization and recommendation rules and so forth and then driving a consistent experience.
And so this approach is becoming increasingly popular. However it is by far the most complex approach and very few of the organizations can get to a sort of deep integration here right out of the gate. So you see it's very common for organizations to actually follow a multi-faced rollout here where they might star with a hybrid side-by-side approach and then overtime evolve and mature the integrations between the platforms to eventually get to the point where the entire site is being delivered by the WCM platform and this is increasing common because it lowers the risk. It allows us to get to market quicker but it also provides a view or sort of vision or strategy if we're getting to a place where the marketing and merchandising teams have complete control over the site from a single tool set.
And we've seen this being done. This is an example of Adobe, for example, who we've been there for creative cloud area now really don't have a paradigm of site and store anymore. That has gone away for them instead we have here is really a place where the site has become the store. There is no differentiation. So here we see the ability to purchase and buy and subscribe to their services embedded in what is a traditional set of web content management marketing-driven .com site. And we've seen this become increasingly the way that organizations are moving towards and in this case, we have a WCM platform driving the delivery of experience and the ecommerce capability really being sitting in the backend or sitting behind the scenes providing the necessary services. In this case, the pricing and the promotions and offers and the shopping cart services and exposing them to the WCM platform.
And then finally also WCM is increasing providing context around the product. This is a screenshot of a typical product page from Sony. And it's almost a continuous never-ending scrolling page -- to an Amazon product page and there's just a huge amount of content on here and what are these content are very visual in nature. Where we've got marketers and designers using design tools to create this content. They won't control over the layout they want to be able to go in and do set up -- editing to be able to add and modify all these.
And so was it related to product content, what we see is at the ecommerce platform, or in some case some organizations using a separate PIM solutions, the ecommerce and the PIM solution controlling if you like being the system of record for all of the structure of the content controlling the Taxonomies of the attributes, different product types and controlling the relationship between these attributes. What are all the different specs and features this particular laptop has? But then if it relates to one of the digital media content, potentially the social information from reviews, potentially some of the information about accessories, these -- from the content management platform. Or the content management platform is sucking in structure of the product definition from the underlying ecommerce or PIM solution.
And so when we've looked at a product page on a site today, we really see that there is a set of jewel role, the WCM platform is providing a lot of the Rich content and providing these set of deep immersive romancing experiences for the consumer and so with that, I'd like to set a move in to enter Q&A phase.
I'm going to pass back over to David.Okay, thanks so much Peter. That was fascinating. Very very valuable. So the first thing that comes in to my mind as you went through the slides and all is that right now when you look at sites like Canon and Caterpillar in your examples, you know, you mentioned that this has come about through certain organizational legacy and you did definitely have your line of business or your ecommerce and your sales guys. You have marketing, you have IT. Most organizations are very siloed. In that way and you know in your later examples where you have consolidated digital experience that's both commerce and content, who should be leading that? Is it IT, is it marketing? Is it ecommerce under some new roles that are coming about? The most innovative organizations are finding success with?
Yeah, absolutely. What we see is that this needs to be a collaborative exercise. I mean for sure the VPS VP of ecommerce will still own the PNL for online sales but we can't have these things in silos anymore. Now, organizational restructuring and change is hard especially for a multi billion dollar conglomerate. He's operating across many different markets and has many different lines of business and so what we're seeing in some organization, there is a new role, typically a sea level role of the chief digital officer that's coming in. And really the job of a Chief Digital Officer is to set a drive in this change and to make sure that the organization is investing in the right technology and then building in the case of those organizations with markets and divisions a center of excellence and building a platform. So that all the other divisions and markets can be on a common platform and trying to look at the current assets, all of those different sites, and micro sites, and different ecommerce platforms and WCM platforms that are currently in use and to try and build a migration strategy and to be orchestrating the gathering of all of the requirements of all of those stake holders. So it's not going to happen overnight. But we are definitely seeing I think far far great collaboration between these organizations than ever before and the silos have certainly rapidly crumbling which is good news.
That's great. Once those silos come down and you have an organization that is ready to produce a digital experience tomorrow, the next step is obviously to build or obtain the technologies of the solutions that you need to make this happen. In the past when it was very siloed and you were going out to evaluate and procure and ecommerce solution or WCM solutions, you go through an RFP process, you go through feature checklist. Does it do this? Does it do that? But the calculation changes a little when you are talking about two systems that sits side-by-side that have to inter operate, that work very closely together, to produce the kind of experiences that we saw on your slides there with Sony and Adobe.
When you go on to procure these solutions and your goal is to create these great digital experience tomorrow, does it change how you evaluate and how you purchase these technologies compared to before when there were standalone platforms?
The reality is that every organization would love to be in a position of being in a Greenfield and were able to start again and to go out and do a vendor selection process where they are considering holistically all of their needs and be able to pick a best of breed content management platform and ecommerce platform together and to find solutions that work nicely and tightly together. The reality is however, that very few firms have the luxury. Very few firms have the budget in their current fiscal year to be able to buy both of these solutions in one go. And very few organizations have the tolerance for risk to undertake that kind of project.
So I think you know the reality is if many organizations, they already have a solid web content management platform or solid ecommerce platforms in place. And if we look at the two sides of the equation, there's typically an organizations where the marketing side are very happy with their web content management platform. They've invested in this in the last couple of years and they're very happy with it but perhaps in the ecommerce site, they're on a legacy system or home grown system that has scalability issues and so he is working with IT. It's about finding a next generation eComm platform that will work nicely and designing early on that architecture for integration because like I said there are different approaches.
Conversely there are some organizations that have typically more retailer that will be in this situation that has a pretty solid ecommerce platform in place that has been paralleling their online sales for a number of years and they’re perfectly happy with that platform. But what they need is to start romancing the customer more. To be building those micro sites, those lending pages, perhaps building community sites, forms and so forth and they're looking for a content management for that would allow them to do that but again it's about finding content management platform that integrates well with their current state.
So I would say that I think for most of the tons of the questions, most of the organization don't have the luxury of sort of going out and picking these things from scratch and it's really about an evolution of what they have today and finding the right partner system that can drive them forward without causing too much disruption.
That's great. So regardless of which one you have first or which one you're replacing, one of the things that I found interesting in your deck is that you mentioned companies want to go in and obtain the very best of breeds so they have a common platform that's perhaps been customized and has worked very well and they're going to look for a CMS or a vice versa. They're going to get the very best for their organization and quite often that solution combination may come from different vendors, or even if it's from the same vendor but maybe two different application suites. So you want to be some measure of integration definitely to create this digital experience of tomorrow. What advice can you give our insight can you give about the interoperability between these systems because they're very complex systems? There's a lot of data that pass back and forth.
The most successful organizations I started to create these unified experiences, what passes these strategies are they pursuing to make it happen?
That's a great question. I think for those organizations that are looking to build more of a deep integration like the third example that I showed where the WCM platform is really leading the delivery of the experience and it's important that the case for example that the ecommerce platform exposes all of its capabilities through a set of easily consumable services and so it's very common to find the organizations that are undertaking these projects. Not doing so on their own they're bringing an outside expertise, they're bringing in system integrators and digital agencies that have done this before because this isn't easy and we don't want to reinvent a wheel increasingly there are some of these partners are building if you like out of the box or default integrations between the WCM and eComm platforms so we're certainly seeing evolution.
But to go back and answer the question, I think the key thing is to identify what is the core functionality of an ecommerce platform that still needs to be consumed? Are we going to use a recommendation engine from there? Are we going to consume the site search and fasted navigation from that engine and if so, what we need are services. We need -- base services and an architecture that allows the WCM platform to consume those services and to be able to pass back information about in the case of submitting an order or going through a check out process. You know the very source of interactive synchronization between the two platforms and so this isn't easy. And it certainly requires enterprise architects to be involved. Getting the architecture right early on I think is absolutely critical what I've seen time and time again through speaking with clients is that they think they got the architecture right and then they go down the path only to find the architecture they have chosen actually in many cases was too complex and too ambitious and they have to backtrack and start sort of simplifying these things. It's very easy for the business, for the ecommerce teams, for the merchandising marketing teams that come to the table with a laundry list of all of the capabilities that they need but I think for the architects and the IT groups involved is very very important to make sure that we don't over engineer these integrations. Because they can as they would say become incredibly complex?
Let's take a deeper dive when you're talking about in terms of architecture and capabilities. One of the slides I really love in your deck was the worksheet of the WCMS on the left all the way through the ecommerce on the right and then there's a big fuzzy gray area in the middle. And if you're far left to far right, it's relatively simple to simply acquire and deploy and get that stuff working but I think that majority of our organizations now are going to be somewhere in the middle. And if we assume that we got one of these companies that wants to be innovative they are going to need content management and ecommerce perhaps 20 percent of their revenues are coming from ecommerce. There's a significance factor of research and prepurchase on the web so you've got a company like that. What's the mix of content plus commerce? If you're right in the middle there and you're going to need both and you're going to leverage both of them equally, how much investment in terms of time and money and budget and focus you've been looking at in terms of CMS and ecommerce and then also the custom stuff that you mentioned. There's going to be enterprise integration that are very unique to that organization. You're going to have to bring a SI.
So now we've got an SI, we've got a CMS vendor, we've got a commerce vendor and just a huge mess. How do you prioritize those things?
I think the key thing is that this is going to be an evolution process. Very few organizations have the budget, manpower, will power to get this right out of the gate. And in fact it's very hard to get this right out of the gate so, I think as long as there is a recognition that this is going to be potentially a multi-year process, and that's why when I look at the integration approaches of comparing a hybrid where the two platforms actually sits side-by-side versus the WCM-led approach. This isn't necessarily needed to be an even or decision it can actually be a evolution from hybrid to WCM-led and I think the key thing is these are expensive platforms you know, the cost of these projects run into the multiple multiple millions of dollars across the licensing fees and implementation fees.
And at the end of the day the business is looking for quick winds and they want to get value out of the investment and more importantly getting value out of the investment. This isn't about ROI. This is about evolving the customer experience and build and delivery a really innovative and differentiated experience through digital channels and so I think as long as there is a recognition that we need to start somewhere, we need to get something out there even if it means we're kind of using these systems in parallel and a lot of the integrations are kind of done on the front-end and then overtime evolving that where we'd perhaps then build a service layer on top of the eComm platform and enable that an SOA architecture and then overtime start for example, moving the product page maybe delivered by the eComm platform and moving those templates into the WCM so that WCM now is consuming product information you know the name of the product is skewed, the pricing, the text backs, and so forth. Through a set of the services from the eComm platform and then augmenting that with all of the other rich sort of social and rich media content within the WCM platform and the WCM platform is able to deliver that with all of the great experience tools around with -- design and drag and drop and personalization and targeting and so forth. I think it's an evolutionary process and as long as organizations recognize that, all of a sudden it actually becomes much more manageable.
That's great and so we we've come down to our final thoughts and again your last two examples with Adobe and Sony and -- so they're sort of pioneers in building this digital experience of tomorrow and the fact that their technology is kind of a bit of a home field advantage versus you know, more traditional people in different industries are verticals like Caterpillar. So if you're one of these other verticals, you're not a technology company yourself or company with home field advantage, what are the set of one or two things that you would sort of take away from this webinar to just think about as you pursue tomorrow's digital experiences and try to evolve your company innovatively?
I think the key thing is actually this isn't about technology. Yes, the technologies can enable this. I think the key thing is this can only happen if you actually have the teams in place, the marketing and merchandising people who can make this happen. It's overly well and good having the tools and technology and place but if you don't have a mature marketing and merchandising organization that is ready to be able to empower themselves with these tools who were ready to do personalization, who were ready to able to do ongoing A/B and multiviewing testing who are able to sort of think outside of the box and build more sort of romantic experiences online for their consumers, then this is a pointless exercise so I think the key thing is to make sure that the organization is ready for this and that you have the level of maturity within corporate marketing, within brand, within your ecommerce merchandising teams they are ready and banging on the door and shouting at IT and are really sort of screaming out loud that they need the technology to enable them and if that's not happening, then this is left with a very little sort of point in going down this path.
So I think the key thing here is not necessarily when you're benchmarking yourselves, who's using the best technology, who's building the most robust integration, it's really about who out there from a strategic prospective has the marketing and merchandising organization with the vision to drive this forward.
That's great. Very very useful and some of the strategic thought there for organizations to think about. I think this is all the time we have for today in this webinar. I'd like to once again thank Peter Sheldon, Principal Analyst at Forrester Research for joining us and once again for lining us with some fantastic insights.
And thanks to you for listening in. You can find out how to profit from some of these technologies in our latest report, "Three Pillars" of the Digital Experience. How to create the ultimate platform with CMS, Commerce and data. You can obtain your own complimentary copy using the link that's on your screen. It contains additional research as well as some recommendations to help you in your own digital experience deliver projects.
Hope that you found today's webinar useful and informative. Once again, thank you to Peter.
Yeah, thanks David.
And thank you for joining us today.