.png)
The FODcast
In the FODcast (The Future of #DigitalCommerce) we explore the real career stories of the people who have made it to the very top of the sector and those who are working at the cutting edge of innovation and change right now. Listeners to the podcast gain insight into the journeys industry leaders have taken to be where they are today, the challenges they are facing now and their aims for the future.
The FODcast
RE-RUN: The Future of Composable Commerce with SCAYLE
As we take a short pause to gear up for Season 7, we’re revisiting some of our most popular episodes from the archives. Today's rewind episode was recorded nearly 12 months ago, yet this conversation with Craig Smith and Rico Adler from SCAYLE remains as relevant as ever.
In our chat, Craig and Rico explored the evolving expectations of digital consumers, the growing complexity of modern commerce, and the key challenges brands face when adopting a composable approach. They also shared real-world insights on why some digital transformations succeed while others fall short - covering everything from organisational mindset to the role of flexible commerce architecture.
Since this conversation, SCAYLE has continued to gain industry recognition. They were named once again in the 2024 Gartner® Magic Quadrant™ report, based on its 'Completeness of Vision and Ability to Execute' reflecting their momentum in the market. They’ve also become the official eCommerce platform provider for Manchester United and, more recently, powered Harrods’ new online shopping experience. Their growth underscores the importance of adaptability in a rapidly shifting retail landscape - one of the very themes discussed in this episode.
If you’re navigating digital transformation, rethinking your tech stack, or simply looking for expert perspectives on the future of eCommerce, this episode is well worth a listen.
Simply Commerce is the leading supplier of talent into digital commerce across technology, digital marketing, product, sales, and leadership.
Find our more about our approach and our services within digital commerce recruitment here: https://simply-commerce.co.uk/
Welcome to the FOD, where we bring you insights into the future of digital commerce for free. Season 5 is all about the move to composable architecture and while it's not a buzzword anymore, there are still a number of unanswered questions, which is why I'm speaking to those who have the answers. In return, if you enjoy our content, we ask you to like and share to spread the message far and wide. Hello and welcome to Episode 5. Today we're mixing up slightly and welcoming Craig Smith, uk country manager, and Rico Adler, director of solution consulting for Scale. I must say it's a conversation I've been looking forward to and how the general tone will perhaps differ slightly from some of our previous guests. Scale is the new kid on the block in the UK when it comes to commerce platforms and, considering it was built with composability at the forefront, I felt Craig Rico would be great guests. Timing is great here too, as scale has recently announced their biggest UK win, manchester United football club. Craig and Rico, do you want to tell you a little bit more about both your backgrounds and scale?
Speaker 2:sure? Um, first and foremost, thanks for having us James super cool to be here. Um, so my name is Rico. I'm responsible for solution consulting in scale, which is basically the unit where we help companies out there to evaluate if our product is the right fit for them, and I am engaged in and excited about digital commerce basically my entire professional life from different perspectives. So, whether it's as a management consultant and strategy teams of big corporations in startups, or operationally in shop and IT project management, and now for the last five years with Scale, basically on the vendor side of things, and I think Craig is going to tell a little bit more about what Scale does.
Speaker 3:Sure, and yes, thank you for inviting us to the show, james, I'm an avid listener. Yes, thank you for inviting us to the show, james, I'm an avid listener. Yeah, so I joined Scale in about six months ago actually June, so it's probably seven months now. I joined from Salesforce. I've actually worked in retail you could say all my life, because my pocket money was working on the shop floor for my dad's business, which was Evan Cycles, which is now part of the Fraser's Group. So, yeah, retail from the beginning to get to get any kind of form of money.
Speaker 3:Um, I've always been a technology guy, though, so all my career has been in technology. A big part of that has been in retail and e-commerce. Um, I'll show my age if I talk about every single brand I've worked for, but most recently I worked with um ampliance, where I looked after all the customers globally. Salesforce, where I was um the strategic advisor to all the kind of uk retailers, and then, just prior to both of those, I was at marks and spencer doing what we believe was the largest um digital transformation program in retail at the time, which we spent about 250 million pounds um doing coming off an amazon e-commerce kind of setup onto our own kind of stack. So that's my background in the last kind of 10 to 15 years. But if you go back further then it will bore you all. Yeah, well, I think it's safe to say between the two of you.
Speaker 1:You certainly bring um a nice varied background and, craig, I think a lot of the uk market is going to know you already given some of the roles you've held in the businesses you've mentioned. So, uh, yeah, really excited to have you both on the podcast, sure, sure.
Speaker 3:And I'll just give you a little bit of background about Scale just so people know for those that aren't away. I mean, it's essentially it's a retail story. What I like about it is it's a technology platform built by a retailer called About you, which some people in the UK haven't heard of because it doesn't operate in the UK, but you could say it's a kind of retail unicorn. It does about 5 billion of transactions through the platform every year. Five years ago it gave birth to Scale and now it's probably a leading platform. It's the largest growing e-commerce platform in the world, according to Gartner, but also probably the second largest in terms of revenue in the kind of DAC region.
Speaker 3:Three of our customers are notable. That you might be you'll certainly know Dykeman if you live in the UK, because there's about 120, 130 stores. It's the largest footwear retailer in Europe. Fielmann is the equivalent of Specsavers in the UK, which is a two billion euro optician and the number one player in Germany. And you mentioned man United, of course, not my favorite team, but it's certainly one of the world's largest sports clubs. I support the team, which is kind of just nearby, around the corner okay, okay, was that City Liverpool a little bit further Liverpool okay, okay, oh, it was one or two and I wrong.
Speaker 1:Okay, well, I'm a Fulham fan, so hey, we'll keep that one quiet for the time being, but that's certainly a big win for you guys. And I mean there's not many brands as prominent as Manchester United globally, so that's awesome. Look forward to seeing how that develops for you. But let's talk about how the I mean the last 10 years when it comes to um, I guess composable transformations and and the development that we've seen, because I mean we've we've kind of been moving away from the monolith for a while and actually there's been. We've touched upon um having best of breed um components anyway, for some time now. We've particularly within, like your CMS or your PIM, for example, but it's evolved a lot in that 10 years and it's now really at the forefront. In your opinion, has there been any one key moment in that period of time that's really driven this acceleration?
Speaker 2:It's a good question. So I would say, to be honest, for me it's less like key moments, it's more of a general market dynamic that kept increasing, and you talked about last 10 years. I would say, depending on the region we are looking at, composability basically got its birth somewhere in the early 2010s and then just picked up more and more 2010ers and then just picked up more and more and um. If I look at the market dynamics then, then I like to like to take two perspectives basically that I think interplay a little bit um, in order to explain the dynamics towards um composability. One is the, the rising expectations of of the end customers, yeah, so the people buying, buying online and online and using digital commerce. So basically, on this demand side, the standards, the expectations, they were just increasing all the time and I truly believe that these expectations and these standards, they are basically set by the big players in the market, so the Amazons, the Solandos, the Values and so on, and the poor thing about all the rest of the companies is these standards are standard standards, so they are expected also from the smaller companies.
Speaker 2:So there's continuously a rise of expectation which requires more and better features, and on the other side. We have seen over the time, technology offerings and ISVs on the supply side to basically build these features and to focus more and more in depth, as you said it, on the best of breed solutions. So there have been more and more best of breed solutions out there from the vendors in order to match the new standards of expectations. Cdps personalization engine content management you name it which in fact required more APIs. Cdps personalization engine content management you name it which in fact required more APIs, faster APIs, more headless composable setup, more flexibility in the general commerce stack, and I think we have seen these dynamics over the last now 10 to 15 years, depending on the region. So it's always about these interactions between the expectation and the supply side, how composability got basically driven.
Speaker 1:Okay, and where does it end, though? I mean, like you said there have been. The expectations of the customer has grown considerably over the last 10 years, as has the ability and the functionality of the technology to match it, but where does it go? There must be a point in which we say, okay, that can't be done anymore.
Speaker 2:It's a good question. So I think in the end, the question is not where composability ends. I think composability won't go away anymore, luckily, because the future gets more demanding and requires more flexibility from commerce stacks. I, however, truly believe that the question is not whether you are composable as a commerce player out there or not, so whether you are on the super left side of things monolith structure, not composable at all, not flexible at all or if you are on a super microservice based, very granular services, full composable flexibility. But the question is when in your strategy of your company do you want to be where? So for me, the question is not when does composability end, because I think it doesn't end anymore, but the question is how to adapt composable setups and align it with the strategy of your company.
Speaker 1:Basically, Okay, okay, craig, I know you back at M&S you started to break down the platform and brought Headless in and what have you? Do you want to tell a bit more about kind of the thought process behind that and how you went around it?
Speaker 3:Yeah, so I mentioned we spent a lot of money putting in a platform. What I didn't mention was it didn't have any APIs. Okay, what we had was we had a lot of channels. I was actually running a team called New Channels, and New Channels meant mobile, mobile web, mobile app. So mobile web was actually a separate thing. Back in the day you didn't have responsive web design like you have now. So we had all these different channels. We had in-store kiosks um pretty cool kiosks. They were large, 32 inch touchscreen kiosks. We had um endless aisle ipads. We had um even room designers you could do in the store with a colleague in the home department. We even had virtual makeovers and in Amsterdam we had a virtual shopping route. So we had lots of different channels doing different things in different categories.
Speaker 3:This is going back to 2014 time, so the website was approaching about 800 million and doing any changes to the customer experience across all the different channels was really really long and complicated, because the website was essentially the technology, was essentially people call it a monolith. These days I would call it kind of very tightly coupled components that were kind of from one vendor. So IBM was the vendor, websphere Commerce, which is still around in the UK retail a lot, and US especially, so we were using version seven of this. The big problem we had was, yeah, we couldn't, we couldn't, we couldn't, um make changes to the customer experience quick enough. Um, we had a very vast and complex catalog. So, if you're, the department stores are the most complicated and retailers out there because of the the breadth of assortment and the number of different places you have to fulfill from whether that's drop ship vendors or your own different warehouses um, so what we? What we decided to do was we were going to cut the head off websphere commerce. We didn't. It wasn't called headless.
Speaker 3:Back then, in 2014, um, we called the project fear. Number one because we were terrified. Number two because it actually meant something. We called it front end architecture revamp. That's what fear meant. Um, it was a really complicated project and it did burn a lot of cash because we were basically trying to cut the head off something wasn't designed to be headless.
Speaker 3:But you know those platforms like, when you look at them, oracle, atg, um, ibm, websphere which is now hcl and and hybris. At the time they were the leading enterprise platforms but they were all big java which you couldn't change without back-end engineers going into the code base, so it wasn't designed to work that way. So the project took a long time. Back then we did achieve our kind of our first milestone of building a kind of the whole browse experience using what was a popular framework at the time called AngularJS, which has now been superseded by React and Vue as the popular frameworks. But it worked and it delivered a much better experience. But it wasn't really designed to be headless, but there wasn't anything else available at the time. So that was the reality If you're an enterprise retailer. It was WebSphere Commerce, oracle, atg or Hybris. This was in the days where Demandware was kind of a very small to mid-market platform. So, yeah, that was my story. So, yeah, we had to do it because otherwise the business was going to be crippled.
Speaker 2:Super interesting, correct, because I just wanted to comment on it because I had the related I wouldn't say the same, but a related experience, kind of the same timing. You said it was 2014, back in the days. So, about you, as you already mentioned, they started the company at 2013, I think, and back in the days. So the ambition was okay, let's sell fashion, but in a more innovative way. I didn't really know what, what, what it meant at the time yeah, um, but it was clear that it has to be truly mobile, born. Yeah, so, um, as as devices were picking, or penetration of the devices was picking up. Um, but basically, about you was launching different ways, how to sell fashion. What I mean with this is different, like brand shops, different approaches, whether it's a very highly personalized digitization of what we sometimes relate to as the offline shopping stroll that families take on a Saturday right, so highly digitalized fashion journey in 2013,. Or whether it's more of a open commerce setup, they called it, where they basically distribute innovation to external developers and allow them, like the Apple App Store, to build apps based on the operating system of commerce that they provide. So you see, there's already quite a lot of let's see where where future goes.
Speaker 2:Questions, yeah, and and about you in 2013-14 was looking for is there a vendor out there that could provide such flexibility as well as scalability? Because they wanted to grow big. That that was that was clear. And then there was just no offering out there and and therefore, luckily, they have been very techie from day one they decided to build the commerce system themselves and established it very, very quickly as core part of their strategy to keep it generic and flexible, because it was clear that about you would just be like the first enterprise pilot customer of a new SaaS business that both of us now are employed for, which basically became Scale and there was a little hack in another story that some people in the UK will certainly remember, and the US company called UsableNet.
Speaker 3:Usablenet was basically a screen scraping technology. It would go to your website and it would expose APIs based on the object model of your website, so the HTML and it was what we had to put it in because we had no choice. So we put in UsableNet in around kind of when Amazon wasn't even giving us APIs back in 2011, 2012. John Lewis put it in, so another major kind of enterprise retailer and a number of other kind of large retailers in the UK. They had to basically get this third party to scrape their website to expose APIs so that you could build apps and mobile experiences.
Speaker 3:As you can imagine, that was probably a little bit brittle. So every time you changed your front end, you had to get Ulivenet to make a change to their interpreter. So this was the way you used to have to do it, because there was way you used to have to do it, because there was, like you said, rico. There was no other option. Back at the time you did these platforms just didn't even have apis, especially not customer experience apis. You could get data into them, um, but getting building kind of customer experiences was almost impossible unless it was the core, the core website now what?
Speaker 1:what I find really interesting is that I mean you've got two very different brands here. I mean that I mean, like I said, mns was put in 800 million through its website, I believe about you was relatively new in the scene at that point of time as well. So you've got a super established um international brand and then you've got this, this new player in germany. But you've both come to the conclusion that you you couldn't get what you needed from what was in the market at that time. So, greg, in MS case, you start to take the head off and go that way and then, I guess, slowly decomponentize later down the line.
Speaker 1:And, rico, so you guys have built your own product completely, which is now Scale, which is what we're going to talk about a bit more today. I guess that leads on well to say where does Scale sit then? Because I mentioned in the introduction, scale is built with composability at the forefront. So you are kind of a Mac-based, kind of Mac principles when it comes to the SaaS platform. So where do you feel like you sit when it comes to the whole move to composable architecture?
Speaker 2:Yeah, so I think again like adding to the journey of composability that we just discussed on two examples. I think, when we now look at these market dynamics, what happened on the vendor market is basically two directions. A I have seen established vendors out there that already have been there before. Composability was a thing, yeah, um that that tried to move towards composable setups yeah, um so, but basically they were just missing the, the blessing of the late birth, meaning tremendous amount of customers relying on, on core code that sometimes reads back to to um way prior than 2010. So it's just harder to move towards composability. They tried to become more composable by adding layers and layers of APIs and basically becoming system onions. And then this is on the far one side, and then on the other extreme, there have been new players, um, that have been created.
Speaker 2:Uh, in, in these times that went all in. Composable um meaning very small, sometimes very small services, um, and really 100 focus on flexibility, which personally I think is very nice but not always required, um, as as it comes at a certain price of complexity, complexity to have a very like granular, service oriented architecture being maintained. Yeah, and your question was where does scale sit? Yeah, I think scale definitely sits on the blessing of the late birth, meaning we basically use all the modern technology in order to create a very composable and flexible setup. However, we don't position our product in the very granular, service-oriented extreme, because we just believe that there is value out there for prepackaged solutions that nevertheless do not compromise on composability. That's basically how we position ourselves.
Speaker 3:I think, yeah, I saw an extreme reaction in the market as well. So I was actually. When I worked at Ampliance, we were one of the very early members of the Mac Alliance, so I was kind of familiar with that story and it kind of if I was back in my M&S shoes at the time, it would have been, it would have been super appealing to me. However, some of the some there is there are people that have gone perhaps too far one way where they've created projects that perhaps gone on twice or three times longer than planned and people in the uk will know about those, those specific projects those are worked in this space. I think it goes back to rico's point is what's your business trying to do? What's the? What's the? What are the points that are different about it? You cannot that.
Speaker 3:You need a level of flexibility, um, because there is this compromise, um, and it comes. It comes at a cost, um, there's also a maturity thing as well. So a majority of retailers, I would say, would say and I'm working across all the retailers in the UK at Salesforce everybody in Salesforce, every UK retailer more or less had one or two Salesforce components and what I did see was the maturity of the digital teams. They didn't have necessarily big DevOps departments or DevOps maturity and they didn't have engineers that necessarily have the skills base to do something that is really finely grained, as Rico says.
Speaker 3:So I found that the people generally the majority of retailers certainly needed something that had the flexibility so you could extend and compose new features if you didn't get it from the vendor. But you didn't necessarily have teams that could kind of create the level of complexity that some retailers decided to do and probably are regretting now because they've ended up with quite large engineering and DevOps teams which they probably didn't need and CFO is probably questioning the kind of the headcount in those organizations. So it's definitely a happy compromise and certainly where we sit is in in that middle ground of got the flexibility. But we're not we're not selling you a bag of parts, we're sending you a kind of package solution that is extendable.
Speaker 1:Yeah, I like the way you put that as well, not selling a bag of parts, which I guess, when you go fully best of breed and you're looking at the completely individual components for all of the different areas, then effectively it is oh, here's great, and go and build it yourself. And where'd you start right?
Speaker 2:Yeah, but I think it's also understandable. So, greg, you mentioned once you worked at Ampliance on the Mach Alliance as well. So imagine you are a technology leader in a company that is sitting on these established systems that try to get more composable but just are not, not not there yet. Um, you're continuously confronted with um rising demands of your customers. You see your competitors, um, and, and like the big players, um, launching innovations quickly and you, just you just can't follow that quickly.
Speaker 2:So I I fully see this kind of frustration and then, like the new kids on the block, yeah, so the back in the days, the Mach Alliance also did very, very great marketing and everyone was it was talk of the town yeah To say, all right, go all in on composability, right. So I fully understand that, that this decision based on the frustration and like the new shiny shiny offering of the market, has sometimes been a little bit too much forefront. So, basically, starting with the intention to go more composable and ending with a setup that tries to be completely composed in every domain. And this is just where these projects, as you said, craig, started and sometimes didn't end these projects as you said, craig started and sometimes didn't end.
Speaker 1:Some of them have not ended, it's true. Okay, so I guess talking about how some of them don't come to an end leads well on to the second question that we'll be discussing today, which is why composable transformations fail. It's common now that a lot of transformations have exceeded the time that they were expected to take. They're far more complicated, they cost more, potentially harder to track ROI. So, in your opinion, what are the main reasons that they fail?
Speaker 2:Well, to be honest, I think think that I mean reasons.
Speaker 2:Reasons differ based on setup, yeah, and also based on the company, um, that that that uh wants to transform, um, its architecture in a more composable way.
Speaker 2:But what I have heard quite often from from customers that that are coming like to to scale, yeah, or that we are at least talking with, is, as I said, they had the intention to become more composable but then basically took decisions for an entirely composed setup which was just underestimating the complexity and the technical resources it would require.
Speaker 2:Because, I mean, you do not only need to select multiple best of breed vendors which might still be the funny part of things, right, getting a lot of demos, getting a lot of nice visions on how to best personalize things, how to best graft your customer experience and so on but then you also have to manage these vendors, you have to integrate them, you have to maintain the integrations, and all of this oftentimes was attempted to be way less or too much granular, I'd say, before even focusing on what is the value that this flexibility would bring to selected domains of your customer experience.
Speaker 2:Because I truly believe that there are certain I wouldn't call it low-hanging fruits, but there are certain domains in which composability depending on which company and strategy we are talking about but certain domains in which composability will add more direct value to the customer experience, create more benefits that are directly visible than other domains. In my opinion, these reasons why composable transformations might fail is just they wanted to go all in too fast and didn't really focus on the domains that created most benefits in terms of being translated towards composable setup.
Speaker 1:Okay, and do you feel as though that is because there is a lack of knowledge in the sector around the way to go around it, in the sector around the way to go around it? Do you feel as though it's maybe a case of miss or overselling from some of the vendors about how easy it could be, or maybe even a slight mismatch from the Mac Alliance? I mean, I remember two or three years ago you had the Lego blocks being put together and that would insinuate it's really really easy and obviously it's really not. So what do you feel? Is that people do underestimate it? Rico and Craig.
Speaker 3:I think there's this word engineers use, called opinionated and non-opinionated. I think that's one thing that happens over time. Certain technology solutions have a very strong opinion about how you do things. They've got a formula and it's like this is the way, this is the best practice. I think with some of the paradigms out there, they're very unopinionated about how you do things, and so that means those Lego bricks can be used in so many different ways and actually you don't have necessarily clear instructions on how to use it, which is fine if you've got really, really strong engineering team, and some of these businesses do right. So some of these businesses that have been successful have got really strong engineering discipline, um, and they're able to kind of assemble these parts and and make it work for them. But there are a lot that probably don't have necessarily the skills base yet and it doesn't. It's not like just case of just hiring people. You've actually got to make it work and culturally fit into your organization as well, um, in in the right way. So I think there's that the other thing about the project's failing.
Speaker 3:I think people forget sometimes the cto and the engineers get a little bit carried away and forget about the end user, which is the person that's trading the website um and how is their workflow going to be? Is it lean and efficient? Can I get products onto the website um within within 24 hours? Um can I. Can I trade the right, the right promotions do? Do I have to swivel, chair between seven or eight different systems just to do one simple process flow? That would have maybe been just one system in the past. So all of this stuff. I do see that sometimes the engineers and engineering teams and CTOs get a little bit carried away, trying to build the perfect engine but not thinking too much about the actual merchandisers and how the merchandisers work day to day.
Speaker 1:That's an interesting point for sure, and I mean it's something that a lot of previous guests have spoken about, and that is ensuring that your entire business, from every single person that is within the business, is aware of the change that will come their way. Make sure they're aware of how that's going to impact them day to day and what they're going to need to do moving forward, because it's all great having one part of the business bought in, but if the other isn't and it impacts them 50 or more, then they're going to be challenging you over that period of time and it's going to make it for for a bumpy journey and there will inevitably be a lot of frustrations that you have to overcome, which maybe, if you were more transparent up front, maybe that might be avoided yeah, I think most, I like most most programs.
Speaker 3:Business changes the bit that's that you got, you got to get right, especially when it's something like I mean, this is for most, most retailers, um, more than 50 of your business is now online, so it's, it's. This is root canal surgery. So this is, this is pretty serious stuff, and if you don't do the business, the business change with it, then then it's gonna, then it's gonna fail, um, along with all the other things we've talked about.
Speaker 1:Yeah, fair comment.
Speaker 2:But I would also say that if we think about why projects might be harder than expected, I mean, obviously it would be easy to blame the vendors and say you promised different things, but I would say this is very mono-directional. So I think there is setups where Mach architectures make complete sense, but I would also say that, on the other hand, you need to evaluate what is your company. So Craig mentioned what is your dev resources? Do you want to reduce them in order to optimize for a total cost of ownership and buy more features than build more features? Or do you want to expand and get more ownership in-house in order to be less dependent on SIs and so on? This definitely plays a role. But also the question even if you took the right decision on Vendor's side, what is the approach you try to bring it live?
Speaker 2:I sometimes saw companies that attempted to do the migration with the same team that runs the day-to-day business, which is hard, let's is is hard, let's, let's under, uh, uh, let's emphasize it, so it's, it's super hard. So you definitely will defocus your organization um the longer such a project um gets. Yeah, and therefore I would also say uh, if, if you don't have the resources internally, um to spin up a proper migration team next to your day-to-day business team. Yeah, then you should definitely make make sure to keep the project um as as short as possible and to produce like time to market as quickly as possible. Yeah, and I think sometimes one at least, sometimes more of these perspectives um have been evaluated um, uh, not correctly by decision makers okay, okay, all right.
Speaker 1:So we spoke about, um, some of the key reasons why they fail. Um, let's, let's take a positive spin to it and let's look at some of the top, uh, the top three things that you would suggest to an end customer, um to ensure a successful transformation towards a composable environment. Who wants to go first?
Speaker 3:No, I've got a view on this. I mean, I think there's a little bit of a myth out there that people haven't been composing different parts to build an e-commerce platform for some time. So going back 15, 20 years, there were vendors offering things like ratings and reviews, product recommendations, live chat, etc. And yeah, it's a little bit easier to integrate now because they've. They used to be like what was called iframes, where you, that the, the vendor, would hijack part of your page and deliver that kind of feature, and now they have um apis. That means you can actually better integrate it into your, into your kind of customer experience. And then the back end, you've also had vendors just selling discrete parts. You've had PIM vendors, order management vendors, cms vendors, and they've been around for a long time. So this composable word that I sometimes have an issue with because people have been doing it, it's just been not as easy to do than it was perhaps in the past. So I would say in terms, in terms of three answering your question, three things you just have to evaluate your e-commerce, start with your e-commerce platform and evaluate that and figure out is it able to meet your current and future needs and, if not, in that particular area, bring in a third party component, but recognize bringing in third parties comes at a cost another vendor to manage another workflow, another login, etc.
Speaker 3:Um, recognize that there are some things that an e-commerce platform just shouldn't do. So, for example, personalization. Personalization if you're doing it well, you're sensing and responding to a customer across all channels email, push, sms, apps, website contact center, etc. If you want to be truly personalized, that's not just a kind of website concern, it's a omni channel. So that's not something that belongs in the e-commerce channel, in my opinion.
Speaker 3:Um, but also speak to others that there's lots of people that have been on this journey. So sit down with your leadership first and learn what what's distinctly different about your business today and what it will be different in the future, and make sure there's strong alignment between what the business sees as areas where it will differentiate and what is just table stakes, because a lot of retail now and e-commerce is table stakes and it's been done before and there is something you can buy off the shelf and it kind of and it does, and it does what you need. It's the areas around it where you have to kind of potentially extend. So that would be my three, my three pointers.
Speaker 1:Okay, okay, okay, rico.
Speaker 2:Yeah, I think it overlaps a little bit. So I'd say three topics Define the level of composability that you need, align with your company's strategy and focus on time to market. So what do I mean? To add a little bit more context. So what are the main areas you need to be more composable in? This caters a little bit to what Craig said. Some things are just hygiene factors. This is table stakes. Some things are definitely nice to take more flexibility in order to really differentiate promotions, general front-end headlessness, customer experience and so on.
Speaker 2:Evaluate your tech capacity, I'd say, and your e-commerce strategy. So this goes back to the questions how much developers and technical skilled people do you have in-house? Is it your strategy to take more ownership in-house or do you want to distribute it a little bit more in order to also decrease the costs there? Do we have a preferred stack?
Speaker 2:Sometimes, also, this matters, and I think one thing that is oftentimes overlooked is do you rather look for just a technology vendor or do you look for a partner that enables you to make best use of the technology?
Speaker 2:Or should it be both?
Speaker 2:Because I think it definitely matters um in in finding the right vendors to whatever domain you're looking for, um, if, if the vendor is approachable for you, yeah, so, um, this sounds easy, but, um, we, we hear that some vendors are just like not, not that accessible for, uh, for their customers like others, or or that you have to pay extra every interaction, that you simply want to get in touch with them on how to best make use of certain cool features.
Speaker 2:I think all of these things need to be reflected when evaluating your strategy and what you're looking for. And then the third thing time to market. I can't stress it enough Roll out as fast as possible. Of course, you would not roll out with a super MVP approach in your most important market, and so on. Yeah, absolutely clear, but try to have the feedback loop of people working in the new system, in the new setup, closed as quickly as possible in order to continuously add features, continuously produce benefits from the new flexibility or, as Craig said, add other third-party vendors to make the stack more composable in the domains where you feel it needs more composability.
Speaker 1:Okay, I mean loads of really, really cool points there, and I really liked the point you mentioned about picking the right vendors. I think that's super key to any transformation. Loads of really, really cool points there, and I really liked the point you mentioned about picking the right benders. I think that's super key to any transformation. Regardless of what you're doing, then you kind of need to be aligned culturally as well. You can rely on them. For example and one of the points you mentioned, craig as well around speaking to others that have been on the journey. I think that's such an undervalued point.
Speaker 1:One of our previous guests said speak to somebody who's done one before and ask them what they would do differently. Uh, which I think is great, because it's very easy to say this is great and do this and do that, but actually, once you've once you've done one, you've probably experienced a few headaches, and it might be actually we didn't need to do that and we didn't get value there, but you should do this. So I think there's a couple of really good points, along with the other ones that you mentioned. I'm sure you've been involved in many conversations over the last 12 months, if not longer, with customers that have experienced some of the challenges that we've just been discussing and I guess a lot of these conversations are forefront for you guys at the minute. Are you noticing there's one sort of specific reoccurring trend in the market when you're speaking to customers at the minute?
Speaker 3:yeah I mean I think, um, the big theme right now is cost. I'm certainly in the uk, um, so I think, and with for a lot of people, um, e-commerce. We had this peak in the pandemic right in 2020, where we have this peak of e-commerce and there's been a bit of a deceleration. Um, we're more or less where we were in 2019 or early 2020 in terms of online revenue generally across across the uk. So people are looking now and they're saying well, the growth is, the growth is slowing generally. It is slowing in e-commerce and they generally got the capabilities they need to operate a good online experience. You know they have things like click and collect. That's been, that's been worked through right now. Um, you've got, um, you've got kind of a good online experience. They have things like Click and Collect. That's been worked through. Right now. You've got kind of a good search browse experience.
Speaker 3:A lot of people are working on personalization still, because that's still something that isn't quite working as well as it could. But generally, people have got good experience and what they're looking at now, I see, is actually, this stuff is costing me quite a lot of money. I've got a lot of vendors in my mix with a lot of overlap. I've got. My costs seem to be going up every year. So my agency fees seem to go up because cost of labor is going up. But my vendor is also asking me for more money because my GMV is going up, for example. So there is a bit of a problem. There's a bit of a backlash right now where people are saying, hang on a minute, this is, this is, this is just costing way too much.
Speaker 3:In the smb market you've got the likes of shopify focusing on that kind of market where actually I can press a button. If I'm a simple retailer, I can press a button and switch on an e-commerce store, like my 13 year old did um to sell his, his kind of products he was sourcing from china. It was really easy to do and it did. What perhaps Magento would have done would have taken kind of two or three weeks. On Magento he pretty did it in less than an hour. So that that simplification and in the enterprise space and the same thing is happening. People are saying well, actually I've had this technology stack for five, six years now. It just seems to get more and more expensive, but should be, given the cost of technology over time goes down, so there's definitely a lot of cost-saving initiatives right now. I think that is definitely the number one theme in the UK and I know, rico, in other markets in Europe that you're working in, you see similar themes.
Speaker 2:Yeah, I fully agree. So costs definitely is a topic. What I tend to see more especially when talking to, like, big corporations, enterprise companies, is there is a tendency to consolidation and, to be very clear about this, this does not mean going back to monolith, but a tendency to consolidate architectures that just have grown, based on acquisitions, attempts to go best of breed and so on, innovation hubs. So there sometimes are multiple brands operated within one corporation. I just recently spoke to a company out there that has three brands on three different commerce stacks depending on the channel and region they operate in. They have different third parties connected and I mean this is not only causing complexity in terms of maintainability and so on.
Speaker 2:But, yeah, to be honest, if you centralize as a big enterprise customer, as a big company, and basically use synergies, then you can also usually get better prices. And I see this quite often this tendency to consolidate and look for what are offerings out there that can provide most of the domains out of the box. And where do I grant freedom to, let's say, different brands in my cooperation to select best of breed vendors. And this is also lately more and more confirmed by analysts that we engage with and talk to regularly that they also see, especially for big companies out there, a tendency to go a little bit less um fragmented and granular in the services that they want to orchestrate more into a, uh like a consolidation okay, we're kind of um seeing that reflected as well with commerce tools foundry.
Speaker 1:I believe um, whilst it's not consolidating technologies, it's making the actual implementation process of the different vendors far, far simpler, which then enables ROI to be seen much quicker. So I think that makes sense.
Speaker 2:And I think this is also so luckily. I believe luckily composability won't disappear anymore, so there will never be a world of pure monoliths again. Composability won't disappear anymore, so there will never be a world of pure monoliths again. But basically, the decisions taken on the way to a more composable setup whether it's for vendors or for the migration approach they will just be made in a more conscious way, because now learning is out there and I think exactly what you mentioned, james, and I think exactly what you mentioned James, the key for vendors now is how can you keep the flexibility and potential benefits of a composable architecture but reduce the complexity to go there and to operate it to a minimum?
Speaker 1:Okay, and then that's kind of how you see the future planning out. Then, yeah, okay, before we wrap things up, I mean scale itself is is born out of about you it's. It's super specialized within b2c retail and obviously gartner sees it as a niche player. A lot of the the other key competitors I mean they're split across the report but I think the majority in the top right quadrant juice. Do you see more niche players coming into the scene.
Speaker 3:It's an interesting question. So I think the analysts have a framework that they follow which is years old, right, typically based on IT buyers, and the way they rank vendors has a different set of criteria to perhaps how you would buy e-commerce, I would say, just being a little bit controversial. Maybe we're considered a niche player because we only focus on b2c. So we are b, we are b2c. We're not focused on on multiple different verticals, it's b2c, fashion, lifestyle, typically, um, so we don't do b2b either. So we're not focused on b2b right now. Um, so, and we're not focused, we're not.
Speaker 3:We're not currently, um, we don't have currently have customers in the in, in the us. We're focused on that market as a next priority, but so we're very european focused. So that means that makes in the eyes of gone and that makes us a niche, a niche player, because we're very specialized in a region and with a set of kind of features and functions. I would say that also, some of the vendors that are perhaps considered to be leaders, they'll have things like B2B, but it'd be a different tech stack, but it's still considered a leader, even though they're selling two different products. One is B2B, one is B2C, so there's a number of different ways that these analysts look at things and I would say that be cautious when you look at that and look at what's important to you, not necessarily to an analyst and their kind of their frameworks.
Speaker 1:Okay.
Speaker 2:Maybe also adding to this degree. So it's debatable. On the frameworks that analysts evaluate the market, of course it's looking at all the vendors out there. It's definitely helpful to have someone guiding you right so I can see the value of analysts. I also would challenge if scale will and how long scale will stay in the niche segment, to be honest, because now we also understood a little bit on how the evaluation is going there and we currently, of course, we are born from from germany, focusing on european market and now uk and so on, um, uh, in in in the first waves of of internationalization, and we also have customers that operate in the us, so already having shops in the us, um, but looking at the big analyst companies out there, they are US-based and also focused. So it's definitely not enough yet. So I would also agree with Craig that this plays a role, but to be honest, I would consider it a little bit from a different angle, not from the Gartner niche or not niche angle, but rather from the focus topic.
Speaker 2:So we have discussed if we see composability as is their underlying foundation of future commerce systems will be composable.
Speaker 2:But then the question of how can you provide the most relevant broad feature set out of the box in order to reduce complexability, then I think the answer to this question is exactly what we are doing and what we will keep on doing and what might play a role why we are considered as being a niche player.
Speaker 2:We focus on a narrow set of customers, so we have a very homogeneous customer base, and this allows us to align our roadmap and our innovations exactly to the needs of these customers. If we would now go for having B2B customers try to get automotive OEMs on the brand board and so on, then we would need to deliver completely different features. That would just not create as much value for the rest of our customers than we can currently do, and I think from this sense, irrespectively of what Gardner and other analysts evaluate how from this angle, I would agree to your question, james, that we probably will see more of these niche players, but phrasing niche as definitely just focusing on a homogeneous set of customers in order to deliver value out of the box.
Speaker 1:Okay, okay, well, I guess the only way we're going to find out is by seeing how things develop over the next couple of years, and we'll be sure to come back to this episode in that time and see how it has developed. I, for one, feel as though it could be a good avenue, as each sector has its nuances that are relevant to it, where there'll be a stronger focus in a specific area to align with the customer's expectations, whether that be in fashion retail, whether that be in automotive or pharma or whatever. So, okay, well, I guess that leads us nicely to the end of the episode. Thank you both for your time today. It's been great having you.
Speaker 2:Cool thanks.
Speaker 1:As always, the aim of this is to educate our audience on best practice when it comes to composable transformation and in some cases, perhaps a fully composable best of breed solution isn't best for your business. What is important is understanding your current and future business requirements and working backwards from there. And, as always, if you're tuning in and finding this useful, please do subscribe, like and share amongst your network. If each episode can help just one person make the right decision for their transformation, it's doing its job. Thanks again, guys.
Speaker 3:Thank you very much. Thank you very much.
