In the year ahead, many retailers and brands will turn away from that strategy and focus instead on adding specific pieces of ecommerce technology that address pressing needs and promise a quick ROI, Forrester Research Inc. says in its recently released “Predictions 2024: Digital Commerce” report.

Emily Pfeiffer, principal analyst, Forrester Research Inc.

Retailers and other types of companies are driven to seek new solutions when existing ecommerce systems that impact customer-facing transactions and internal processes are unable to meet new needs, says report co-author Emily Pfeiffer. For example, many retailers and brands have inventory systems that do a good job of tracking merchandise from suppliers to distribution centers to customers. However, they are not designed to provide online shoppers with real-time information about inventory availability.

Commerce teams move away from replatforming to ‘point solutions’

Those inventory systems and other components of ecommerce operations, Pfeiffer says, “would have a very high cost to rip and replace.” Instead, she says, more companies are leaving those systems in place for now and seeking add-on technology that addresses the pressing needs they currently face.

“And that is the right way to think about it,” Pfeiffer says. “I have a business problem, what capability will solve it, what tech function will give me that capability, let me go add that. Those are the types of moves we see coming in the next year.”

Pfeiffer, a principal analyst at Forrester, isn’t surprised by this development. In last year’s report, she and her colleagues predicted that one-third of organizations that tried to “play software company” by piecing together combinations of function-specific technology would regret they did. She believes that prediction was on the money.

In response, Forrester predicts that fewer companies will attempt big initiatives to refresh their ecommerce technology infrastructure. It also predicts that “smaller, targeted moves will replace half of major replatforming projects.”

2024 Leading Vendors to the Top 1000 Retailers Report

Analysis of the leading vendors that serve North America's Top 1000 online retailers. Includes rankings of the Top 10 leading vendors across 24 categories, including Customer Relationship Management, Ecommerce Platforms, Fulfillment Services, Marketing Automation Platforms, and more.

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In many cases, those smaller moves will consist of retailers and brands looking for a “point solution,” technology that addresses their specific problem. While that may lead them to new vendors, she says it’s a good idea to determine what a retailer’s current vendor offers, as ecommerce tech providers are constantly acquiring companies with specialized expertise and innovating themselves.

“Start with your trusted vendor, then look at point solutions,” Pfeiffer says. “The last resort should be a major replatforming.”

Other ecommerce technology predictions for 2024

Besides predicting a shift to more targeted tech investments, the Forrester report makes four other predictions for 2024:

1. At least one-quarter of digital tech spending will shift away from maintenance.

Given the need for flexibility today, “businesses will realize they can’t keep throwing good money after bad. They’ll spend less on maintaining legacy systems — and on the partners that support them — as they finally move to eliminate outdated tech instead of paying to keep it on life support.”
With many tech budgets tight, Pfeiffer says she and her colleagues hope companies will “put money into things that will move them forward instead of automatically writing that check” to maintain the systems they have in place.

2. Only one-quarter of businesses will benefit from digital commerce initiatives based on generative AI.

Retailers will be constrained by consumers demanding more control over their personal data and new AI-related regulations, Forrester predicts.
“Trust is everything,” Pfeiffer says. “Make it really clear what data is being used, how it’s being used and give customers control if they want it not to be used.”

3. Social media giants will partner with three retail media networks for commerce.

Forrester doesn’t predict which three retailers’ advertising networks will partner with social networks. But it points to examples such as Meta Platforms Inc., owner of Facebook and Instagram, working with retailer Dollar Tree. It also points to Pinterest working with U.K. retailer Tesco.
Such relationships, Forrester says, will leverage customer data to make purchasing on social networks more appealing. And social commerce is yet to take off among U.S. consumers overall. However, a 2022 Forrester survey found 61% of U.S. online adults under 25 had completed a purchase on a social network.

4. Six percent of businesses will boost employee productivity with computer vision and augmented reality.

Examples include store associates, warehouse workers and B2B salespeople using cameras on mobile devices to capture physical data and get recommendations on the best actions to take. Already, 4% of retail and wholesale workers say they used augmented or mixed reality tools on their jobs weekly. Forrester projects an increase of at least 50%, to 6% or more, in the coming year.
“Digital businesses should initially adopt these tools as tests with clearly defined desired outcomes — and then carefully monitor the impact on those intended results and goals,” the Forrester report advises.

In addition to Pfeiffer, Forrester analysts Lauren Cevallos, Chuck Gahun and Brendan Witcher co-authored the 2024 digital commerce predictions report. They had input from Fiona Swerdlow, Keith Johnston, Kelsey Chickering, Joe Cicman, J. P. Gownder and Delilah Gonzalez.

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Earlier this month, Drinks sold Wine Insiders for an undisclosed sum to Full Glass Wine Co., which also owns the Winc retail wine ecommerce site. The sale opens the door for Drinks, or Drinks.com, to focus on selling its digital commerce technology stack, designed to enable any online merchant to add alcoholic beverages to product catalogs and such venues as “influencer” web storefronts.

Zac Brandenberg, CEO, Drinks Holdings Inc.

While ecommerce is a fast-growing channel for consumers to discover and purchase beverages, sales of alcoholic beverages through the digital channel are growing even faster, says Drinks chief executive and co-founder Zac Brandenberg.

“Consumers want to engage with brands/merchants at their convenience — where they want to, when they want to. That means from their laptop, their phone, their couch, etc.,” Brandenberg says. “As the alcohol category starts to come online, you’re going to see consumers rapidly adopt a digital shopping modality.”

To capitalize on consumers’ growing preference to purchase alcoholic beverages online, Drinks’s strategy is to focus on bridging the gap between consumers’ growing desire to purchase alcohol online and alcohol companies’ ability to scale online sales. The sale of alcoholic beverages in the United States totals about $250 billion, the company says.

“The growth in the sale of alcoholic beverages online increases the total addressable market opportunity because it expands consumer choice and access, particularly in markets where regulatory restrictions have limited shopping access points or SKUs available to consumers or created other impediments,” says Brandenberg,  adding: “The growth in the sale of alcoholic beverages online is not being fueled exclusively by the shift away from brick-and-mortar shopping.”

At the core of Drinks’s business is its Drinks app for Shopify, which provides Shopify merchants of all sizes with an embedded, real-time alcohol tax and regulatory solution. In addition, the platform helps merchants that want to sell alcoholic beverages manage regulatory compliance, required disclosures, customer messaging, product catalog and inventory management, merchandising optimization, and product fulfillment.

An app for managing online alcoholic beverage sales

“Our vision is to provide an operating system for this industry — that means any business that wants to sell alcohol online,” Brandenberg says. “Our Drinks Shopify App provides the regulatory technology for alcohol producers and merchants to sell alcohol online.”

In addition to its core regulatory tax compliance platform, Drinks offers a wine-as-a-service (WaaS) platform to develop a branded nationwide wine program and offer omnichannel shopping experiences. As a result, ecommerce merchants that don’t carry a liquor license can add alcoholic beverages as a product category in a fully compliant manner directly to their storefront, Drinks says.

Retailers such as Macy’s Wine Shop, Thrive Market and Misfits Market use the Drinks platform.

Other apps offered by Drinks include its Pair platform, which uses data-driven insights with artificial intelligence and machine learning to create personalized shopping experiences. The company also operates a customer experience and retention agency called Electriq, which helps wineries take the tasting room experience online and increase customer loyalty through lifecycle strategies, email/SMS marketing, and web design and development.

“We have a lengthy waitlist of merchants who want to add beverage alcohol products into their storefronts, covering almost any audience,” Brandenberg says. “Drinks is enabling any business that sells something online to now be in the alcohol business. We are able to power online, direct-to-consumer alcohol commerce for bellwether retailers, digital-first commerce brands, and celebrities like Martha Stewart and Geoffrey Zakarian. As we scale our technology footprint, more merchant types, as well as experts, creators and influencers will follow suit.”

One merchant segment that looks especially promising is “creator” and influencer websites, which are not part of the alcohol ecosystem in the traditional sense. Tapping this merchant segment represents new distribution opportunities for alcoholic beverage brands.

“The early innings of creator/influencer-driven marketing have operated similar to an old-school affiliate model, where an endorsement led to a transaction on a brand/merchant site,” Brandenberg says. “That’s obviously evolving, and opportunities abound for the creators themselves to be the conduit for transactions, to maintain that one-to-one relationship they have with their audience. That presents an opportunity for us to enable an ever-increasing number of consumer-facing commerce sites or outlets.”

Peter Lucas is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.

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There are currently over 26.5 million ecommerce sites operating worldwide. Between 2019 and 2023, the number of ecommerce sites worldwide grew from 9.2 million to 26.5 million, says research from Markinblog.com, a digital marketing and sales services provider.

With nearly 14 million ecommerce sites, the U.S. now accounts for about 53% of all websites, far more than any other country. In comparison, the number two and three countries, the United Kingdom and Brazil, have 1.24 million and 730,000 ecommerce sites, respectively.

“The significant rise in ecommerce can largely be attributed to the COVID 19 pandemic, which led to a 204% year-on-year growth in ecommerce sites in 2021 alone, taking the number from 9.7 million to an impressive 19.8 million,” says Markinblog.com. “The United States is the leading country in ecommerce, with 13,982,500 sites, significantly outpacing the other countries. This indicates the highly digitalized nature of its economy and the significant role of online shopping in consumer behavior.”

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Check back soon for more Charts & Data Stories, like our weekly B2B infographics. Here’s last week’s. We add new content regularly. 

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The social media app’s Shop option, prominently displayed between the For You and Following feeds where users watch videos, presents a never-ending scroll of “recommended” random products, according to an early version Bloomberg has reviewed. It includes products from a $2.99 Nike sweatshirt that appears counterfeit to a $6.99 statue of a “naughty dwarf” sitting on a toilet. Many of the listings, including a budget planner and a waist-trainer vest, say they’re shipped from China, where TikTok’s parent company ByteDance Ltd. is based. That could reignite U.S. regulatory concerns if it puts user data in the hands of Chinese sellers.

The TikTok Shop marketplace will be competing with Amazon.com Inc. to sell a target of $20 billion in merchandise this year, Bloomberg has reported. The effort has been discussed internally as a “community commerce” effort, according to people familiar with the matter. That means it’s meant to capitalize on the app’s potential to bring people together through their niche interests. But the early version of the experience shows no evidence of the ultra-personalized algorithm TikTok is known for in its video feed, which has been key to its success in capturing users’ attention.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in the Global Online Marketplaces Database. The Digital Commerce 360 database ranks the 100 largest marketplaces by 2023 third-party GMV.

TikTok Shop marketplace listings

Instead, Shop is plagued by the same problems with a free-for-all marketplace that Amazon has faced. Categories and sub-categories of products are filled with overwhelming choice. The Home & Kitchen section shows a 37-cent-mini-car trash can next to a $16 four-foot computer desk and an $8.43 three-piece polyester satin sheet set. Misspelled brand names and implausible prices on many of the listings raise red flags for potential counterfeit sales.

TikTok said the article is “misleading” and that it doesn’t “represent the TikTok experience.”

The TikTok Shop marketplace highlights prices — which are remarkably low and listed in large font. It highlights coupons and free shipping offers in red and green, respectively. TikTok creates a sense of urgency by listing next to a product how many times it’s been sold. It also lists a countdown clock with the hours, minutes and seconds left of a sale.

The TikTok Shop marketplace does not list brands before users click on a product. The majority of product names seem more tailored to search engines and algorithms than human shoppers. One listing, for instance, touts “Women’s 3 Piece High Waist Workout Shorts Butt Lifting Tummy Control Ruched Butt Smile Yoga Short Pants.”

2023 Global Online Marketplaces Report

Analysis of the 100 leading global online marketplaces. Includes over 30 charts, rankings of the world’s Top 100 online marketplaces by 2022 third-party GMV, tips for marketplace sellers, and findings from a new consumer survey. 

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Where are the products from? Are they real?

The most prominent section is for “Today’s Deals.” On the feed Bloomberg has seen, the top promoted product was a snail mucin-based face serum. The serum has recently gone viral on the app: a COSRX-brand Advanced Snail 96 Mucin Power Essence. The seller, listed as FIFTHLINYOUNG-4, advertised the serum for for $7.99, down from $39. But neither number aligns with the $25 price the brand COSRX offers on its website. The TikTok seller also says the product is manufactured in China, when COSRX products say on the packaging that they are made in Korea.

“Dear, yes, it is genuine,” the seller said in a message on TikTok. “The new store is offering discounts during events.”

The seller didn’t respond to questions about why the product says it is manufactured in China. CORSX didn’t immediately respond to a request for comment.

The snail mucin is also the only skincare item FIFTHLINYOUNG-4 has listed.

The other items by that shop include:

• A drone marked down from $999 to $88.
• Alisting featuring photos of the internet-favorite tumbler from Stanley without listing the brand name in the title or description.
• An LED tooth-whitening kit with photos that don’t match the brand name in the listing.

“Even in testing, there are over 200,000 verified U.S. merchants on TikTok Shop selling legitimate products — including over 150,000 beauty products that have been validated through our process and represent some of the biggest names in the beauty business,” a TikTok spokesperson said.

Sketchy sellers previously booted from Amazon marketplace

In June, a person familiar with the company’s U.S. Shop strategy said the company was focusing on American sellers. That strategy appears to have changed. A quick search reveals a number of Chinese brands on the TikTok Shop marketplace that Amazon has kicked off its platform for faking customer reviews. Amazon booted Guangdong SACA Precision Manufacturing from its marketplace in June 2021. Products from its brands Taotronics and VAVA are currently available on TikTok. So is the hot-selling headset brand Mpow. Amazon also removed its parent, Shenzhen Qianhai Patozon Network & Technology Co., from its marketplace.

In its terms that a user can click on before checkout, TikTok says “we make no representations, warranties, or guarantees, whether express or implied, that any content on TikTok Shop is accurate, complete, or up to date. We have no visibility or control over the contents on or available through those sites or resources and you acknowledge and agree that we have no liability for any such content.”

When a user checks out from the Shop tab, she can make purchases from multiple sellers at the same time in the same checkout. TikTok is processing payments through its app, Bloomberg has reported.

That means the company will also be collecting additional information about users, including:

• Card details.
• Billing address.
• Shipping address.

TikTok regulatory concerns

That may eventually lead to extra regulatory scrutiny for the company. TikTok has been under pressure from federal, state and local governments for its data privacy practices. The app’s Chinese ownership has sparked national security concerns over whether it can track or influence Americans on the app. The company has said it is working to isolate sensitive data from its American users so that only staff in the U.S. can access it through a separate unit called USDS.

“TikTok US protected user data is stored in the U.S. and managed by USDS,” a company spokesperson said. “And we work with third-party payment platforms to facilitate transactions on TikTok Shop, with all data managed by the payment partner.”

Lawmakers have been particularly sensitive to whether the app collects location data on users. Prior to the launch of Shop, the company said it updated its app so it no longer collects precise or approximate GPS data, only approximate location information.

But the TikTok Shop marketplace appears to open up some user data to its sellers. In TikTok’s Buyer Policy, the company says that “Sellers are independent controllers of the data that they collect about you via TikTok Shop, and TikTok is not responsible for their compliance with applicable law.”

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Klaviyo is a platform that automates ecommerce SMS and email marketing. It has more than 130,000 customers.

Klaviyo revenue

But in 2022, Klaviyo generated $472.7 million in total revenue. That’s up 62.4% from $290.6 million in 2021. Net loss in 2022 was $49.1 million. That compares with a $79.4 million loss in 2021. For the first six months of 2023, revenue grew to $320.7 million. That’s a 54% increase from $208.3 million between January and June 2022.

“Our rapid revenue growth has been driven by increases in our customer count, growth of existing customers, our expansion into international markets, our sales to mid-market businesses, and the cross-selling of our SMS offering alongside our data platform and email offering,” the company says in its IPO papers.”

Using artificial intelligence and advanced analytics to accumulate customer information and insights for marketing campaigns and delivered on a subscription as a service (SaaS) platform is how the company builds and retains business, Klaviyo says.

“We assembled over 6.9 billion consumer profiles across our customer base,” the company says in its IPO papers. “In the 12-month period ended June 30, 2023, we processed over 695 billion events, which are data on how consumers engage across channels, such as opening an email, browsing a website, or placing an order. As we add more customers and more anonymized data on our platform, we can better refine our predictive models of consumer behavior. These network effects also enable us to continually refine our guided software recommendations to drive more impactful campaigns and specific actions.”

Klaviyo’s business is tied in great measure to ecommerce platform provider Shopify. In July, the two companies signed a strategic business agreement. Shopify became one of the biggest financial backers of Klaviyo with a $100 million investment, according to the company filing.

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Shopify Q2 sales

Revenue for the period came in at $1.69 billion, beating the $1.62 billion average estimate of analysts that Bloomberg surveyed.

“We’re not just shipping products faster,” President Harley Finkelstein said in a statement. “We are also expanding our global merchant base, all while improving our ability to generate greater free cash flow.”

Gross merchandise volume, the total value of merchant sales across Shopify’s systems, was $55 billion. That’s above Wall Street projections of $53.43 billion.

One of the biggest ecommerce players in the game

45 merchants in the Top 1000 use Shopify. They account for a combined $8.30 billion in web sales. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers.

Shopify is the No. 4 ecommerce platform provider for Top 1000 retailers. In order, the top three are:

• Adobe
• Oracle
• Salesforce

Top 1000 Database

Leading 1,000 online retailers headquartered in North America. Access includes up to 5 years of web sales, company information, website traffic and features, technology vendor information and more. Web sales range from $41 million to over $373 billion annually.

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Looking forward

The Ottawa-based company also gave an outlook for the third quarter, saying it expects percentage revenue growth in the “mid-twenties” on a year-over-year basis, when adjusting for asset sales. Shopify also said its free cash flow profitability in the quarter will be greater than the entire first half of 2023.

The Canadian ecommerce giant has been attempting to turn around its business. Last quarter it cut more than 2,000 jobs — its second round in less than a year. It also sold the majority of its logistics unit to Flexport Inc., abandoning a fulfillment strategy it had put together to better compete with Amazon.com Inc. to refocus on its core ecommerce platform business.

Shopify AI integration

Finkelstein said Shopify recognizes the “immense potential of AI to transform the consumer landscape and commerce more broadly.”

A week before Shopify’s Aug. 2 earnings call, it released Shopify Magic, its suite of free AI-enable features. Finkelstein said Shopify will soon launch early access to its new AI-enabled commerce assistant, called Sidekick.

“Powered by Shopify Magic, Sidekick is a new chat interface packed with advanced AI capabilities purposely built for commerce,” he said.

Finkelstein said adding Shopify AI integration provides businesses with the most modern tools to enable them to make data-driven decisions. Shopify AI integration will also allow them to optimize their operations, he said.

Check back for more earnings reports.

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Hobbycraft had to learn what parts of its website did and didn’t make sense for its shoppers, what bugs to work out, and what changes its website wasn’t capable of. And after about 12 years with its previous website, it replatformed in March 2022.

It used key insights it had gained from years of web traffic data, North said. And it implemented Contentsquare, a digital experience analytics platform, to better understand changes in its website metrics.

Contentsquare “helped us understand what we needed to protect or keep,” North said. “Then it also gave us the ability to say: Based on what we know through Contentsquare, it’s an opportunity to start meeting customer needs in a different way that we hadn’t been able to deliver on the old site.”

For example, in 2017, Hobbycraft’s share of mobile website traffic “radically changed — almost overnight,” North said. Its share increased 20% to 30%.

“We’d taken that site and that technology and that architectural capability to the absolute Nth degree of what we could do with it,” North said. “We’d also optimized it as far as we could as well. It was a known entity to us, so we knew it very well. It had served us all the way through the pandemic.”

Hobbycraft is a United Kingdom-based retail chain that sells arts and crafts supplies. It ranks No. 361 in the Europe 500, Digital Commerce 360’s database of the largest ecommerce retailers in the region. About 20% of Hobbycraft’s total sales are digital, according to North.

Better understanding user behavior

She said among other features, Contentsquare tracks rage clicking. Rage clicking is when a user repeatedly clicks on part of a website because it doesn’t perform the way the user expects it to.

One such case of this is when Hobbycraft would have a statement near its checkout cart at the top of the page identifying how many items were in a user’s basket.

“It wasn’t actually a link,” North said. “It was more of an indicator, but we made it an active link that jumped you to that first line in your order because that was what the customer was expecting — what that information was there for. There’s lots of little micro-frictions all over the site that we’re always refining and reading what the customer’s doing.”

Similarly, there was a misunderstanding among consumers who went to check out and saw “gift voucher” as a payment option. The word “voucher” led shoppers to think they should look up coupon codes. Because of that, shoppers would reach the checkout page and then become overly fixated on finding a coupon code online. Hobbycraft then changed the copy and moved elements on the page, and the issue went away.

Seeing the problem clearly

North attributes the ability to understand that behavior to Contentsquare through its analysis of rage clicks and exit rates, and its session replay feature. By watching session replays, Hobbycraft and Contentsquare learned that the country field on the checkout page was editable — but it shouldn’t have been.

“So in some cases, the user was accidentally changing the country, therefore making their checking experience invalid. It had been eluding us for a while,” North said. “Sometimes, it’s really hard for the development team to recreate a bug or it’s impossible for them to do, so you really go around in circles. The session replay is what unlocked it for us.”

Hobbycraft also noticed it received more guest logins than account sign-ins on its login page. Because of that, it moved the guest login option above the user sign-in option, “which helps on a mobile screen,” North said.

“It all starts with the understanding,” said Niki Hall, Contentsquare’s chief marketing officer. “The retailers know what’s happening because they might have Adobe or Google Analytics, but they don’t know the why, so they can’t improve.”

Watching a user’s session allows Hobbycraft’s and Contentsquare’s teams to see exactly what went wrong in a user’s journey.

“When someone’s engaging with your site digitally, how do you understand their non-verbal communication? You really can’t,” Hall said. “You’re kind of flying blind unless you have something like Contentsquare.”

User journeys

North said Hobbycraft analyzes user journeys, segmenting them by traffic source. It also segments sessions with a transaction versus those without to better understand what success — conversion — looks like.

North and her team noticed shoppers exiting Hobbycraft pages because they had gone back to shop through Google, or they would hop to other product pages.

“They might look at seven product pages, and the only way they can really do that is by looking at the recommendations because the only other way to go directly from one product page to another is through the recommendation panel/widget there,” she said. “It’s telling us the consumer has come with an idea in mind of what they want, but they need to go on more of a product discovery journey to find what they want.”

In response, Hobbycraft figured out ways to position recommendations higher on product pages. After a seven-second delay, it shows recommendations of products similar to the one the shopper is viewing. Hobbycraft tested that at two-second, five-second and seven-second intervals before deciding on seven seconds.

Product pages power post-pandemic site

North said a key trend Hobbycraft noticed, for example, is that consumers became less brand loyal coming out of the pandemic. They’re under pressure in terms of cost of living, she said, so they started to shop in a different way.

“That means rather than come to us through an organic or direct landing on our homepage and start in a linear journey, we’re actually seeing that a vast majority of consumers are landing on the site directly on the product page,” North said.

They’re landing directly on product pages through Google shopping searches, she said. And because they aren’t entering Hobbycraft website through its homepage, product pages have to also perform as landing pages and “engage the user when they’re quite far down the funnel.”

That has led Hobbycraft to put a “strong focus on the product page during the replatform,” North said. For example, it has slight variances in product pages depending on if an item is out of stock or if a shopper has landed on the page from a shopping ad.

Moreover, Hobbycraft has increased its investment in paid traffic. About 30% of its traffic now comes from Google paid advertising, such as paid links, she said. The biggest share is still organic, direct traffic, she said. Organic social traffic and paid traffic each reflect about 10% of traffic, she said.

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So as a prominent tire supplier to Canada’s automobile manufacturers, dealers, and independent tire retailers, Montreal-based distributor Groupe Touchette Inc. has relaunched its ecommerce platform to meet the demands of multiple B2B channels and individual consumers.

Denis Gallagher, vice president of IT, Groupe Touchette Inc.

The company’s new ecommerce platform, running on SAP Commerce technology from SAP SE, hosts several transactional commerce sites, including TireLink.ca for sales to motor vehicle manufacturers and their dealers; DTTire.ca for independent tire dealers and installers; and Tireland.ca, where consumers can purchase tires and arrange for professional installation.

Groupe Touchette says 94% of customer orders are now placed through the ecommerce site, up from less than 80% on its prior site.

Operating online with more agility

“The tire distribution industry has seen significant shifts in recent years, including the emergence of private label tires, and advanced use of data, analytics and technology logistics,” says Denis Gallagher, vice president of IT. “Since the establishment of the new omnichannel B2B platform, we have been able to respond to these demands with more agility.”

As a result, he adds, “we are seeing our customer loyalty, competitive advantage, and market share all increasing, coupled with a reduction in calls and costs to our call centers.”

Groupe Touchette also operates more than 50 distribution centers throughout Canada, putting it “in a position to offer delivery services in 90 of the 100 largest cities in the country in less than three hours,” Gallagher says.

The distributor’s overall sales and fulfillment operations, however, require reliable connections to exchange customer and product data between its ecommerce platform and backend business operations software.

Integrating ecommerce with ERP

Groupe Touchette worked with Toronto-based systems integrator Pivotree to deploy SAP Commerce and integrate it with the distributor’s SAP S/4HANA enterprise resource planning software, providing for accurate online presentation of such content as customer contract pricing, order details and status, customer activity data, and promotions.

Among other improvements, the ecommerce platform also features enhanced site search and navigation, resulting in more repeat customers and fewer calls to customer service, Gallagher says.

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Digital Commerce 360: How likely are companies to use newly emerging digital commerce applications and services in the wake of a slowing economy and business productivity?

Ty Rhudy, digital experience, commerce and omnichannel services consultant, Perficient

Rhudy: Companies are rethinking how they approach digital commerce. Digital commerce platforms used to just be shopping carts. These days it is either thinking of a digital experience platform (DXP) model, custom model, or some form of headless. Many brands are considering headless in the next few years. However, even more importantly, we are seeing customers consider the transformative capabilities of product information management and distributed order management as part of their ecommerce application strategy for omnichannel operations. The digital maturity part is truly a huge part of what is right for the right customer.

DC360:  How fast (or slow) are companies moving their ecommerce applications to the cloud and software-as-a-service products?

Rhudy: Not as fast as you might think. We have seen that customers have had challenges getting to the cloud or in the alternative being able to pull the data they need from the cloud for some API capabilities in their solutions. There is no doubt however, customers are moving to the cloud. It is just taking more thought into how to approach it.

DC360:  Is connected commerce real? If so, what is it?

Rhudy: Honestly, it is aspirational at this point. I speak with dozens of companies and cannot tell you one customer I have met with that can deliver on connected commerce. However, all want to move towards this through the proper commerce foundation that is aligned with a digital strategy that aligns with their core customers. Helping companies build those foundations that can deliver connected commerce capabilities is what is real.

DC360:  How fast (or slow) are B2B organizations embracing connected commerce?

Rhudy: I would say slowly at this point. Customers had the stress test of the pandemic to see what was broken, what needs improvement, and how to help grow again. This is a critical pause for customers to really take this next step forward in digital/connected commerce as part of their core strategy. There is no decrease in the customer expectation that wants connected commerce.

DC360:  Headless commerce keeps making news. What exactly is it, and are more companies using it, and for what purpose?

Rhudy: Headless commerce is the notion of picking the best-in-breed technology and utilizing microservices vs. monolithic platforms to deliver commerce capabilities. I think this will continue to gain steam; however, there is still a lot of value in DXP solutions for an organization (or a package of DXP solutions). To be able to deliver on headless requires a high digital maturity and lots of work around people and process to execute. This is still true with DXP models but with a little less risk. We believe that there is ample room for headless and DXP approaches. The puzzling one is when customers choose to go custom. The capital needed to deliver modern experiences in taking a custom approach is significant. We believe more customers will move away from this model.

DC360:  Is ChatGPT for real? If so, what role does it play in B2B digital commerce?

Rhudy: Yes and no. ChatGPT is still very new. I think with any AI solution (ChatGPT, Search, natural language processing, machine learning) it is important to not think of it as a buzz word but a use case. We help clients all the time determine what is the use case most appropriate for their business with these solutions. For example, chatbots we have implemented for automotive brands, etc. There is power in the application of these technologies. It is plainly important to get some guidance in how to adapt without risk. We have many models around this.

DC360:  Are you seeing companies spend more – or less – on ecommerce applications and services this year?

Rhudy: We are seeing a bit of a re-think in 2023. However, with all the market disruptions in areas like Google 360 deprecation, the slower move to cloud, the dynamics of headless technology, the consideration of experiences with new AR/VR sets (like Apple), we are seeing some important things ahead for 2024. The smart clients are working on these things right now.

DC360:  How do you see ecommerce platforms evolving in the next 2-5 years?

Rhudy: Honestly, it is less about the platform and more about how organizations set up their technology to align with business needs and capabilities. We will be helping our clients extract the full value of the platforms in delivering business outcomes more than platform features.

DC360:  What do you think are the “must have” vs. “nice to have” ecommerce applications or services companies need add now as opposed to later?

Rhudy: We see a ton of importance in PIM solutions. This is a solution that aligns deep into the heart of an ecommerce business in how they manage and share product information. Also, distributed order management is a transformative solution related to commerce. Also, we have yet to really see the full value of a content and commerce system fully leveraged to provide personalized experiences at scale. But that future is coming!

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Among its early goals were to better serve chemical buyers and deal with suppliers: handling large transaction volume and managing and tracking inventory. It addressed those issues by working with Adobe Inc.’s Magento ecommerce software, and the Webkul Marketplace platform, and McFadyen Digital, an agency with a specialty in marketplace technology.

Upgrading the checkout experience

ChemDirect initially used the Stripe payments platform to process payments. It also developed a process for letting customers pay via purchase orders but found this process was not scalable both for ChemDirect’s customers and its internal team.

“There was significant user demand for additional payment methods, and we knew we needed to address this,” says Grant Lacy, ChemDirect’s head of product.

“B2B checkout experience has too often been a series of screens with dozens of fields and limited payment methods,” says Thomas Gaydos, chief marketing officer of McFadyen Digital. “In B2B, the checkout process has historically been somewhat onerous for the customer.”

It pays off, giving customers more ways to pay

In addition, ChemDirect decided to also offer a more comprehensive range of financial services,  including customer invoicing and financing. In 2021, ChemDirect worked with McFadyen Digital to deploy an accounts receivable and payments system from Balance. New options for customers included the ability to choose payment terms — pay on delivery, Net 30, or Net 60.

The results of the new payments system include:

• More than $20 million in buying power available to buyers via the ChemPay/Balance system;
• Financing made available to more than 2,000 buyers;
• Financing of 24% of all purchase transactions since a new checkout process launched in March 2023.

“We believe in building products with B2B functionality and a business-to-consumer experience,” Lacy says.

David Haase

ChemDirect president speaks at EnvisionB2B

At the EnvisionB2B Conference and Exhibition next week, ChemDirect president and chief operating officer David Haase will speak on the June 21 panel, “Keys to Success on B2B Marketplaces.”

That panel will be moderated by Tom McFadyen, CEO of McFadyen Digital, who will also lead a 2-hour workshop on June 20, “B2B Marketplace Master Class: How to Build Scale with Multi-Vendor Ecommerce.”

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at paul@digitalcommerce360.com and follow him on Twitter @pdemery.

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