Decoding the "Forrester Wave: Commerce Solutions For B2C Q2 2024" report - Leaders Circle Empty? A Shocking Twist!

Disclaimer upfront: This article in its entirety is based on publicly available information as of the date of publication and social media posts & websites of people and companies referenced below. It represents my subjective thoughts and professional opinion based on 15+ years of experience in the Ecommerce technology and marketing industry running agencies, interacting with thousands of merchants, brands, and distributors of varying sizes and implementing hundreds of sites and custom applications for them.

An "odd" moment for Ecommerce platforms (ECPs)

The new Forrester Wave is out and Emily Pfeiffer is making quite a slick move, telling us that no one gets to be in the coveted “Leaders” circle this year! She seems to shake the foundation of these rankings asking – “what should an evaluation of the market look like?.” She claims that she found “it” – supposedly, these rankings are to serve as a “retention” tool rather than a “buyer’s guide.” I never understood how these high-level aggregate rankings averaging “patients’ temperatures in a hospital” based on a small and subjective sample – are helping an advanced buyer to make an informed platform choice. It has been a useful marketing and fundraising tool for ECPs themselves for sure! But I can recall dozens of times when I had to help my prospects dissect a meaningless reported ECP “challenge” and explain what real challenges they will face with a particular Ecommerce platform. I have an even harder time understanding the “retention” / pacifier concept – who retains whom? An ECP sending this Wave as a “blue pill” to their installed base keeping them calm believing whatever they want to believe? Or a merchant leveraging the report in her negotiations for a better price with an ECP? I.e. "you guys aren't cutting it on the Wave report, so give me a discount?" Oh yeah, I've seen this before. A very motivated individual would approach their ECP vendor claiming they "fail in performance", and the response always is -

In her Forrester blog, Emily states that all but three of her reference customers said they think they’d still be using their current commerce solution in 3-5 years (not clear what the sample size is, I betcha we're talking a few dozen responders across the endless sea of merchants) – and she states they are extending lives of their digital solutions by adding modules (often from other vendors) rather than replatforming. She continues to say that “…digital leaders will have to focus on the individual tech functions that will bring attributable results in the short term…” and that it is “an odd moment for ECP’s” today.

I had to check the date on that statement. “An odd moment?” – sorry, it is anything but odd. The "composability" concept coined by Elastic Path folks which then got forged into the M.A.C.H. by Margaret Rea , Andreas Rudl , and Kelly Goetsch in its shape and form has gone mainstream years ago, and very few ECPs are confused about the fact that the time of all-in suites is gone. I do not know about you people, but my clients are experts at making money in the brutally tough business of retail. They squeeze every penny out of their ECP pi?ata before they buy a shiny new tool – and it’s not a strange new behavior! Oh, and have you bought an Enterprise ECP license recently? Spoiler – they are typically locking you in for 3-5 years. With so many merchants making massive tectonic moves to modernize their ECP stacks in recent 2-3 years, no wonder they are going to keep it for a while – THEY HAVE NO CHOICE! One of my long-term clients is locked in for a couple of years and she hates it; she makes incremental cosmetic additions to her stack, nothing major, and will soon start the RFP for a re-platform. But she is not the whole Ecommerce market!

Is the Ecommerce replatforming market dead?

Far from it! just go take a random look at direct-to-consumer sites of a random dozen merchants from the Forbes 2000 list and you will see that around half of them have massive UX and technical issues; score them on Core Web Vitals and you’d be blown away by missed opportunities and low numbers… and we haven’t even scratched the surface of B2B yet. And the lower you go in the total online revenue / GMV size, the more business there is for all of us technology and service providers for years to come. If Emily is right, we will not be getting these weekly and sometimes daily types of inbound inquiries from brands pushing huge volumes in online GMV – quoting from my recent CRM records:

“Would like to redesign and develop our site using a new modern platform. Requirements include CMS, B2B Ecommerce, integration with Marketing automation, PIM, salesforce, ERP” (GMV $250m)

or

“Our Primary goal is to migrate site X DTC from Magento 2 to BigCommerce. We will consider moving site Y from SAP Commerce to BigCommerce B2B Edition. Other sites may be possible too. Need to push higher share of orders to online - driven by better quotes to order, product configurators. Need to operate more efficiently. Site X is the larger brand of the group and the primary focus on the e-commerce platform search. We are going through a whole digital transformation and looking for a best-in-breed approach to this." (GMV $300m)

I think you get my point.

How do you define a Leader and in what market segment?

Maybe Forrester is scoring SMB, and not the Mid-market / Enterprise? Well, let us put the segment name in the report title then, like IDC does now, with their Marketscapes. But with SMB – same problem! Yes, most people have them shopping carts functional and customized at various levels, but are you telling us that leading ECPs aren’t innovating and are so much a commodity today that they can’t differentiate enough to snatch new business for themselves? Look at Shopify Editions! Look at BigCommerce - The Next Big Thing or their Catalyst / MakeSwift headless push! Look at Kibo's fresh new MACH composability / massive modern integration layer! Look at commercetools Foundry. Look at Spryker organizing ECP Enterprise key components in such a fresh way! Look at VTEX continuing to pump effort into their platform’s marketplace functionality like they’re a Duracell bunny! I can go on and on – and I do not necessarily beat that drum for specific ECPs – my point is: life goes on and life is ?? EXTRAORDINARILY rich in options to differentiate. The play is more competitive, more exciting, it requires brains / intellectual capacity – the buyer is way more educated; she has many battle scars; she know what she wants; and she knows (for the most part) to get past the marketing hype and to look under the hood in a meaningful way.

The odd moment for B2C ECPs? That was in early 2023 when we all sobered up after the pandemic digital growth on steroids; but we are in a completely different scenario now running a marathon, not a sprint. And, just maybe, Forrester, you need to take a closer look at ECPs that can support merchants at EVERY stage of their growth? Would that not be an indication of a true Leader – powering both SMB $0.5m carts and $1b brands of conglomerates with the EXACT SAME scalable and flexible functionality of a modern shopping cart? Just maybe you stop giving extra scoring to those ECPs that really are just a loosely connected combo of several products acquired over the years, glued together by creative marketing, and struggling not for a year but for DECADES to integrate it all?

A "Kodak" moment for industry analysts

These pay-to-play kind of reports have become marginally useful a long time ago, especially with the relative rankings being assigned in some very strange ways, causing an avalanche of “WTF” text messages in the community of industry operators – hence the hero image above (yikes, Emily, it was pretty bad with that 2022 B2C report!). One needs to understand how the stacking is made, and how small of a window of opportunity there is for any single vendor to showcase their product, prove its actual differentiation, and how little due diligence is possible in this format, no matter how motivated and methodological the study is. This Wave and the most recent IDC similar research show that even the authors hear the “Kodak” relevancy bell loud and clear. I applaud the initiative to find the way out by asking all the right questions. However, I do not agree with the new derivative assertions that sound smart but have zero practical meaning. I also cannot help it but wonder if there was so much political pressure to assign the “Leader” status to someone that this move by Forrester is just a way of reframing the problem not to make a difficult and subjective award choice. Raise the bar with the new scoring so that no one feels left out? Just saying…

Core or Non-Core functionality? Or a new name for a Suite?

The most annoying thing that made me write this piece is the “new” scoring based on the "CORE / OUTSIDE-CORE" functionality. Forrester claims that most ECPs have strong CORE functionality (true!) and that most do not lead in much of the functionality OUTSIDE the core (also true – but missing that its 2024 out there!). It is worth to quote Emily’s blog post section in its entirety here:

"We found that most of the vendors that we evaluated in this Wave:

Have strong core commerce functionality. Core functionality in this case includes criteria such as cart & checkout, practitioner UX, and payments. It also includes criteria that sound noncore, like order & inventory management as well as content & assets. Vendors received the full range of scores for their core commerce capabilities.

Don’t lead in much of the functionality outside the core. Vendors only received the highest scores for non-core commerce functionality if it rivaled what its customers would find in specialized, stand-alone solutions. But the non-core criteria often win the deals. Frequently, when our brand and retailer clients call us for help evaluating new solutions, we focus on the non-core, more unusual functionality. These are the areas of differentiation, where solutions bubble to the surface as uniquely positioned for the needs of that business.

(Merchants are then invited to a $300 webinar to be explained what this means.)

Whoops! We’re being bamboozled into an old ECP suite concept in a new fancy buzzword wrapper. Just think about this for a moment: to be in the Leader circle, an ECP must have a functional product offering that is at par or stronger than that of a standalone functional vendor. The more of a “Suite” you are, the higher the score.

Thus, for example, if you have an AI-powered Intelligent Search as an ECP that competes with, say, Algolia or Bloomreach, great! If you intentionally choose to provide a cookie-cutter SOLR or Elastic poor man’s search functionality to cover basic merchant needs AND have a superb integration layer providing for easy integration with third party search to power your SERPs, categories, etc. for larger merchants – you are screwed!

If you are a highly performing shopping scalable, upgradeable, secure, integrateable shopping cart – “view a product – add to cart – checkout – rinse and repeat” without adjacent products and you are focusing on a use case set for a specific market segment / vertical / region etc. (i.e. you are just a best of breed component of a massive composable solution) – you are screwed.

Clarity in definitions, please!

What ECP products are being compared? Where is consistency YoY in the analyst reports? Is it Shopify Plus or a Shopify? Is it Shopify 1.0 or a 2.0? Are we looking at SFCC RSFA-based product or else? Is it Kibo UCP / or something else? Is it Adobe's M2 EE Cloud or Hosted platform? Is it BigCommerce Stencil or are we looking at BigC headless? If we include BigC Feedonomics or Catalyst/MakeSwift, why aren't we seeing the same with Kibo ECP, OMS, and Subscriptions?

What is a modern ECP in 2024 if it's not a universal support tool that helps engage, attract, convert, expand, and operate an Ecommerce business with lower cost and more freedom than ever? It it is not that, we're looking at a man-orchestra monster that does produce sounds, but can't play its part of a beautiful Ecommerce symphony.

Forrester states they focus on an “unusual functionality” of an ECP when asked for a recommendation? Holy shit, people! It’s just amazing to hear from here in the trenches where the “usual” basic things still matter. Uptime. Architectural integrity. Customer service levels. Se-cu-ri-ty! Customizability. You show me a fancy new ECP “built by retailers for retailers” with a sexy new value prop and bolt-ons and I will show you a half-baked absolutely unreliable product that needs much blood and prayers to be made to work.

I do not buy this advocated approach, and I think Forrester should take another close look at this proposed market reframing before going mainstream with it. IMHO, they are stepping into a very murky reputation zone with this report.

Is there a better way?

Enough ranting. Is there a better way for buyers to stack and compare ECPs? I think so. There have been attempts on that front in the past by highly motivated Magento practitioners, for real : ) Seriously though, I think the best seal of approval you can have today is that of the MACH Alliance – a community of practitioners who very carefully evaluate ECPs and specialty functional providers prior to giving a coveted membership in their organization. Also, things to consider when you are looking to choose and ECP as a merchant:

1. An Ecommerce platform is no longer the center of the universe. The new center is the realm / system of record of all your customers’ touch points with your brand – both digital and physical. It also includes your custom business rules and logic, your custom APIs, your custom apps living in your own cloud infra. Everything else should be plug-n-play, including an ECP. If you are lucky enough to find an ECP that does more than what a shopping cart is meant to do, say they have a strong OMS offering or they have a great modern AND headless front-end engine, good for you! But do not expect and do not focus on that when shopping around. And – RUN AWAY from ECPs that hold your data captive claiming you need to buy their entire range of offerings to experience the full value (this one definitely warrants a separate article).
2. When evaluating an ECP, check the use cases that match yours. Check references from YOUR vertical, talk to merchant users of YOUR size. No legitimate ECP would ever have a problem giving you referenceable clients like that – and if they hold off on that list for more than a few days, beware! (it also applies to agencies – your future SI team should be evaluated in the very same way). Do not ever skip this step, a day spent talking with the actual platform power users will save you massive amounts of money and time. You will not only be exposed to a true platform experience, but you will get a good feel for a quality of customer support and care is of each ECP under consideration – and that is a major factor in the selection process (even the most sterile prepped reference merchants normally won’t hold back and will tell you how it really works – or does not).
3. Run a compact technical assessment / architectural evaluation and test-run an ECP instead of a lengthy functional / feature focused RFI and then an RFP (I have seen some running for 500 lines – utterly useless!). It is also a whole separate topic itself - the technical evaluation process requires much upfront time investment. But if you have a sizeable business, a paid technical evaluation is absolutely warranted. You will want to have answers to how ECP handles all the “non-functional requirements” (I prefer to call them "Architectural Characteristics") – payloads it can carry, its deployment models and types of frontends / CX it supports or has built-in, etc. etc. What matters to others may not matter to you and vice versa. Interrogate ECP’s Sales Engineers BEFORE you buy their product, they are very motivated and for the most part, you will get the real picture from them combined with a tailored demo that shows how they would solve your particular use case.
4. Business users’ experience must be an essential component of your evaluation. Your marketers / merchandisers / site operators will have to work with / administer several components of your composable solution. Make them play with ECP sandboxes. Have your ECP show a “day in life” of a marketer managing their website. If you intend to use templated storefronts, have them play with content management. If you intend to use a standalone CMS, limit ECP marketing test runs to managing products, promotions, business rules, etc. Ensure that it’s not just technical staff / IT that understands the concept of composability – have a full onboarding and buy-in from the whole team and have them fully understand how their experience will be different from ECP to ECP (because they will potentially be stuck with operational challenges of their sub-par ECP choice for several years if you don’t do your due diligence in steps 1 and 3 above ??
5. Size matters. Do not overcomplicate things and don’t make your choices based on a distant future growth plan that may not materialize. Critical Ecommerce success factors are many and most of them lie in the business model, branding, GTM strategy and similar areas and not so much in the specific toolkit you will use to enable meaningful buyer journeys. There is a proper ECP toolkit at every level of business – some are usable for merchants of all sizes, some support SMB / start-ups well, etc. There are many good options to choose from, and it’s very hard to make a serious mistake. Remember, you may well swipe a credit card, upload a product XLS & images and be online in hours on Shopify to have a proof of concept running; and when it begins to scale, you can roll it into a more sophisticated platform, customize it, etc. In fact, I've had clients like J&J, Dolby, and others launch their DTC test initiatives in this exact way. Crawl - Walk - Run. I had a call today where a business selling roughly $0.5m online claimed they really need a top CDP like “NOW!”, a very custom checkout, and perfect CWV scores – all for a budget of roughly $50k including licensing. Do not buy a microscope to hammer nails. And be really careful not to mistake a sexy polished hammer for a microscope. : ) Not as hard as it sounds, you just have to let go of your ego sometimes.

In closing

It is fun to compare software applications, play with, and test platforms. We live in a very exciting time – cool new concepts and products pop-up daily. But in the brave new composable microservices-based AI-driven world of Ecommerce, we do not need "pay-to-play" rankings. What we need is a meaningful, competent, and open dialog amongst our community of professionals (prac-ti-tion-ers!) in the Ecommerce technology space – and this dialog is actually happening; it’s exiting to see and I am very much looking forward to navigating in this industry together with you all.

UPDATE: Thank you everyone for joining the conversation, your great comments, and adding color to the perspective - especially Brian Walker , Rick Watson , and Matt Hampshire . I also appreciate all the DMs from people who can't comment publicly due to their ECP affiliation - it is very clear that its time we must all hold analysts accountable for the methodology and approach they advocate to evaluate and rank products in our industry.

? Never Ever Stop, good people! ?

Sergei

P.S.: If you are planning to or already are evaluating Ecommerce platforms for your DTC or B2B online sales channels and need expert assistance in choosing a product that fits your specific needs, or have any questions related to this topic, reach out to me here on LinkedIn or via email. I will be glad to help.

And if you like this article, please, like and share with friends. If you hate it, share with enemies. Thank you! ?