The positionings of modern martech vendors are misaligned with profiles and business goals of American retailers, and the business leaders responsible for buying their ecommerce technology. This is despite headless, API-first solutions being highly suited to tackling the unique set of problems facing retailers in the US market.
This was my primary takeaway from in Rosenstein Group’s recent webinar, ‘How to Sell Headless Commerce into the US Market’, where we were joined by Kelly Goetsch of Commercetools, Bloomreach’s Brian Walker, Patrick Friday of Vue Storefront and Jason Aubin of Treasure Data.
You can watch the webinar recording in full below, or read on for an explanation of the work that headless vendors need to undertake to accelerate growth in the US.
That work entails three key tasks:
- positioning the martech proposition for the profile of the US buyer, who is more likely to be a business leader than a technology specialist, and with different personal experiences of technology re-platforming
- helping buyers understand the cost/benefit ratio of modern martech, with regard to exactly what it can achieve and the demands that transitioning will place on the business
- mapping solutions across to the retail challenges facing US businesses, including the need to maintain consistent and high-quality customer experiences across many online and offline retail touchpoints.
Vendors of best-in-class, API-first martech solutions have done an excellent job at growing in Europe, where headless, API-first technologies have been widely adopted in response to the complexities of doing business in the region.
Similar complexities and opportunities exist in the US, but modern technology is currently less-widely appreciated as a solution to those problems. This reality needs to be acknowledged in the commercial strategies of API-first martech sales teams.
Positioning the proposition for the profile of the US buyer
If you want to understand the cultural barrier, between Euro-centric ecommerce providers and US retailers, a good place to start is by considering Oskar the Oryx: corporate mascot of Spryker, a headless ecommerce provider.
Oscar declares, “I support sales, digital and IT managers to enable digital commerce growth.” US business leaders may well wonder why they’ve been left out.
Even amongst tech-friendly headless ecommerce vendors, Spryker sits at the extreme end of the spectrum. It’s often used in complex B2B ecommerce settings, and with fees starting around $200,000 a year, it has a higher barrier to entry than Shopify or BigCommerce.
Nonetheless, it’s similar to other API-first martech solutions in being poorly positioned for the US market.
Brian Walker, Chief Strategy Officer for Bloomreach, a vendor of cloud-based customer experience solutions, explains that in North America, the technology buyer is less likely to be an IT specialist; more likely, the owner of the business.
“In Europe, it is a technology-led decision. In North America, it’s more likely it’s a business leader. And that’s not a straight binary but that is generally the case.”
The issue is not the technology itself. Rather, whereas technical professionals are already sold on the benefits of headless solutions – since they provide a powerful set of development tools – for business leaders, it’s harder for them to connect the technology to ROI.
Walker explains that a further problem is that the US buyer also differs in how they perceive the risk of technology upgrades.
“In North America, you see a lot more mature businesses operating at scale, with experience of re-platforming projects that took a lot longer, cost a lot more than expected, and potentially didn’t deliver on the promises of the business case.
These people could be on the third of fourth re-platforming project of their career, and struggling to see how a further re-platforming is connected to their current business priorities.”
Walker’s views chime with those of Kelly Goetsch, Chief Strategy Officer at commercetools, an ecommerce back-end provider. Goetsch explains that US retailers are typically have a different attitude to risk due to their differing scales.
“The GMV of these [European] shops tend to be smaller, whereas in the US, if you’ve got a $2bn revenue business live, folks just don’t want to take the risk in such a big market.”
Of course, there’s a risk profile associated with every technological development. But anyone familiar with API-first martech knows that risk-reduction is one of its core benefits: characteristically low-code in nature, with far shorter timeframes to going live compared to legacy products.
Goetsch gives the example of introducing new features to a platform, where typically four or five iterations are needed before you start receiving any revenue. With headless solutions, a similar number of iterations may be needed, but the timescale is greatly reduced.
“Maybe today, you update your pricing logic or your promotion engine to support a specific type of promotion. If you update these things every hour, maybe it takes you a week to get some feedback from the market and perfect that feature.
If you’re releasing once a quarter, it can take you a year – it’s ridiculous.”
To date, however, headless vendors simply haven’t done an effective job of packaging up this message, of ease, speed and simplicity for US martech buyers.
Helping buyers understand the cost/benefit ratio of modern API First martech
This is partly a case of branding; some US retailers may wish to buy their tech from a DeLorean-driving cartoon animal, but most wouldn’t. But actually, some far more fundamental groundwork is needed in helping US buyers understand the cost/benefit ratio of modern martech solutions.
Positioning a product successfully depends on:
- acknowledging what the buyer wants to achieve
- mapping your solution to those needs
- making the investment seem worthwhile and within the buyer’s means.
The obvious place to start is by focusing on the cost and difficulty of developing legacy solutions in order to meet the demands of modern retail.
Patrick Friday, CEO of Vue Storefront, an ecommerce front-end provider, explains that retailers require complex multi storefront capabilities…
“…with regard to specific channels, promotion and pricing for people living in a different state. With the current monolith setup, that is an issue because you need development talent that’s specialised in a very specific tech stack (i.e., ATG, Hybris, IBM). Those guys are dinosaurs. There’s not many of them left, because the young developers don’t want to touch [legacy platforms]. And demand for development talent is growing globally.”
Similarly from Jason Aubin, VP of Sales at Treasure Data, an enterprise customer data platform:
“The reality is in the next decade, there’s going to be a massive migration in North America of … different commerce platforms, and technologies such as content management systems etc., into a headless environment. Businesses are going to have to do this because there’s resource constraints. Every company I’ve talked to is struggling to find the right developers, they don’t want to touch legacy platforms, they want to work in React.”
Business leaders consider these problems to be intimidating; in some cases, even existential. As to the vendors: with their customers facing such upheaval, they may in some cases do better to focus on the incremental changes which can be achieved with their solutions, rather than on their suitability for wholesale re-platforming – which might make them sound difficult or expensive to do business with.
Indeed, a lot of the growth of headless solutions in Europe has come from brands using them to enhance incumbent legacy systems, rather than replace them, or in helping brands expand across new commercial channels. A good example is the use of commercetools by Audi, the German car manufacturer, to introduce points of sale into its vehicles.
If such possibilities were communicated front-and-centre to US buyers, it ought to assuage the fears that Brian Walker mentioned, stoked by bad memories previous re-platforming efforts.
Mapping martech solutions to the US market
Martech vendors have a number of opportunities to pitch their solutions for a number of characteristically American retail challenges.
In my previous article, on how to sell headless technology into the US market, I talked about some of common problems facing US retailers that headless solutions can solve. One of these was the complexities of interstate commerce, with differing levels of tax built into pricing. Another was the opportunity of marketing localization in America’s highly heterogeneous ecommerce environment.
In reality, the prioritization of the different objectives will shift from retailer to retailer. Treasure Data’s Jason Aubin explains,
“You really need a consultative seller who can understand the use-cases the client needs to execute against, and explain to build the architecture that will allow them to create the experiences they want to create.”
All the panellists in our webinar, however, drew attention to one common factor: the difficulty of building and maintaining multiple customer experiences from legacy ecommerce back-ends. In Walker’s words….
“For a lot of businesses, localisation used to mean completely separate instances of the commerce stack. They would try to templatize implementations of Hybris, Magento, and so on. This is largely untenable; it’s very difficult to keep all those different sites up to the same standard with regards to innovations and security patches, etc.
Headless architecture offers the opportunity to simplify how you manage many multiple sites and drive localization, whether it’s a feature capability or the commerce experience you’re trying to drive. And these are also benefits for businesses which are thinking of expanding globally.”
These are benefits to retailers on both sides of the Atlantic; unique to the US, however, is its curiously offline market. In many small towns, the mall may be the primary local center for not only shopping but also entertainment and socialising. And many retail industries which are now primarily online in Europe – for instance, insurance and utilities – are still sold in the US through storefront locations.
Significant traction could be gained by starting a dialogue about how martech can simplify the coherent management of these offline retail touchpoints alongside online stores.
As Goetsch explains, the legacy setup was to run ecommerce separately from in-store technology which managed product catalogue, inventory, pricing etc. Today, clients are increasingly using commercetools’ solution as the back-end for instore points of sale.
“I think it’s disingenuous for organizations to say that they’re omnichannel when they have these completely siloed systems.
Now, [retailers] have so much technology in every store – including security systems, smart tags, and many other things that require an internet connection… People are beginning to question why you would have segregated channels, when instead, you can simply expose the data and functionality of your commerce system via APIs, and build a point of sale ecosystem around that using off-the-shelf tablets and other devices.”
Walker adds that the technology is also apt for enhancing face-to-face retail.
“I often call those offline channels ‘digitally enabled channels’. The customer, the sales associate, the contact center associate, they’re using digital tools as well. Expressing your commerce platform into all those environments is absolutely the logical step.”
The capability of cloud-based ecommerce software, to serve any point of sale, is well-appreciated by technical buyers. This has been part of the recent shift from talking about such solutions as ‘headless’ to ‘API-first’: putting the emphasis on software connectivity, rather than the absence of a ‘head’ or customer experience (a shaky term, given that many ‘headless’ vendors also offer CX solutions).
Doubtless, American retailers are already seeking new ways to succeed in many more retail settings. But a shift in language alone will not guarantee commercial success for the software vendors.
Helping US retailers appreciate the value of API-first technology
The martech vendors named in this article are all growing rapidly, and one should think twice before telling a fast-growing enterprise that they’re doing anything wrong. Certainly, the self-confidence of the sellers of headless solutions is admirable.
As Patrick Friday says…
“…when someone asks if we can talk about promotions or content changes and publishing and scheduling, we say no – because we’re a dev tool, and we’ll talk to your developers and then I can introduce to our partner at Bloomreach, who will take care of your amazing marketing and businesspeople, because that’s how it works in headless.
And we will help consume all those APIs – but your developers should be the ones speaking to us. Month by month, people are beginning to realise that headless solutions make these systems easier to manage.”
Awareness is indeed spreading, but a strategy of pitching for techies can only be effective if the buyer has techies on their team. Nor can it be taken for granted that US retail leaders – some of whom may have been buying ecommerce solutions for decades – will simply catch up with fast-moving technology trends.
Kelly Goetsch notes that, while API-first systems are easier to work with, and while the necessary development talent is so much more widely available, “I don’t think that message has quite permeated the US market yet.”
Achieving that level of permeation will require some back-to-basics business development strategy: rethinking the customer profile, understanding their paint points and objectives, and mapping your solutions across to their most pressing business needs.
As Jason Aubin says…
“I always like to start the conversation by taking technology out of the picture and thinking about what you’re trying to accomplish with your customer. Let’s talk about what that customer experience would look like: mobile, desktop, a service call, an in-person store experience, a tweet –all sorts of ways to connect to customers. If you think about what that journey should look like, then we can talk about how we can enable that for you.
I probably would not use terms such as ‘headless’ or ‘API’; I would start the conversation about the use-cases and what they’re trying to accomplish.”
Some of this work has already taken place.
Of the four major headless ecommerce providers, only commercetools & Spryker feature the term ‘headless’ at the top of their website homepages. Shopify & BigCommerce both use the term a lot further down the homepage; Shopify Plus is introduced as ‘Flexible and fast to launch’; BigCommerce, rather more loosely, claims to be ‘Ecommerce for a new era’.
Beyond a simple repositioning, martech vendors must double down on helping retailers understand both the direct cost, and the opportunity cost, of continuing to work as they currently are.
Brian Walker says that many US retailers are still hoping to future proof their businesses, create omnichannel experiences, and capitalise on emerging technologies such as AR, VR and virtual worlds, by making incremental improvements in legacy systems.
“These [objectives] provide an impetus for businesses to consider how to deliver these experiences in a sustainable way once they get past initial experiments. They’re ultimately going to have to invest in an API-first strategy.”
The connection between the dots – precisely why they’re going to have to invest in an API-first strategy – is plainly apparent to people who are already au fait with cutting-edge marketing technology. But perhaps it’s not much more widely understood than that.
In Patrick Friday’s words, headless solutions are supposed to “make techies and businesspeople happy”. They achieve this by being accessible, adaptable, and capable enough for anything that the market can throw at them.
For faster adoption in the US, martech firms need to build out propositions that are at least as adaptable as the technology they sell.