Why Commerce (e-commerce) is not a Commodity

We’ve been seeing for quite some time many opinions out there from a variety of software firms and consultancies, saying that "commerce is a commodity.” The trend, they say, is to "build your differentiation and buy the rest" and "composable architecture is the way to go." However, to take a more balanced approach, a counter view is needed from places where enterprise scale is achieved and is driving significant value.

Good friends and people I trust have developed these mantras in the industry with massive marketing budgets over the last few years. But I have to say that I respectfully disagree, having experience both as a provider of large system integrators and digital agencies and as an employee of an enterprise software company.

Let’s consider this first: What is the definition of “commodity?” We would assume the term being used is Merriam-Webster’s definition: “a mass-produced unspecialized product.”

Given this definition, there's an opportunity to view e-commerce differently.

Firstly, having a software solution that scales and performs is not a commodity. Carts (which for true commerce platforms are modeled as orders) are a far cry from a “commodity,” because achieving high performance to develop an order is critical to driving revenue and beating the client’s competition. For one of our top B2B clients we learned that a 10% increase in page speed time would drive around $90M in incremental revenue (nearly 8%) – so speed equals revenue and it matters.

Handling order volumes at unexpected peak periods also matters. It’s not accurate to say that everyone’s cart is a commodity. In reality, orders can have many different behaviors – B2C, B2B, B2B2C, etc. Supporting all these order models in the same platform – like HCL Commerce Cloud – is not a commodity.

Nor is getting that to scale a commodity. It's more of an art form that must be at the core of the platform from inception, because its scale has been designed in and can't be added after the fact.

This is an example of an HCL Commerce Cloud Client’s Business Scale.

This matters most for firms doing complex pricing, data driven personalization (especially with CDP's now starting to drive high-speed AI/ML driven insights), complex pricing models and promotion management. And frankly, those are the goals of most firms, regardless of online revenue size so it applies to everyone. The details matter making this not a commodity.

Secondly, having common and easy-to-use business tools that are constantly innovating to manage the behavior of business processes (customer-built and packaged) is not a commodity. Infusing AI/ML insights to automate behaviors of these course-grained packaged business capabilities (Gartner’s definition of what we call "integrated composable commerce") that support the velocity of the customer interactions may seem like a commodity. However, only robust platform providers know how to do this because they accounted for it in the initial design. HCLSoftware sees this as a tremendous opportunity and a major area of investment.

Thirdly, software vendor support and accountability is not a commodity, especially at critical online revenue moments. One of our HCL Commerce Cloud clients just completed their 5-week peak and found they had 100% uptime — not a single issue. We were on our typical high alert, especially for our clients' big events, and as we are for all our clients (our clients’ online revenue of $220B/year stellar reputation speaks for itself).

This can be contrasted to those that think assembling a narrowly scoped collection of many vendor components, which are usually changing and evolving, is more optimal.

Given this idea of assembling both internal and multi-vendor components, consider this:

A single customer journey at the key moments in session (real time) will traverse across many vendor components and those a client built as well. In these situations, clients must manage all of it themselves. They end up in a support nightmare, having multiple component vendors on the phone trying to do problem source identification on a performance problem. No one becomes accountable in this scenario - except the internal customer IT department.

All that said, the thing that really stands out is…

When you hear, "build your differentiation," that is a “secret code” for the customer. They end up in build mode and use a woefully incomplete set of “component-based products” to try to support a horizontal customer journey. The problem is that they must touch everything, from complex pricing to promotions to personalized content – and it had better be fast.

Trying to paint a picture for clients that promises to provide commodities creates tremendous risk for clients. Systems integrators who push this risk see it as a means for billing revenue or generating large support contracts end up doing a disservice to their clients. Unfortunately, this is an even more acute problem given the shortage in talent and turnover in the market, where all the knowledge in that custom vendor integration leaves with the employee.

My point is to avoid an architecture purity debate altogether. The market trends have shifted abruptly over recent years. We’ve seen SOA, Client Server, N-Tier Architectures, and even Headless (which isn't new, but that’s a story for another time as I’ve implemented headless applications since the early 1990’s) come and go. Our clients want scalable, robust, highly functional platforms that let them design new engagements for their customers. They also want to partner with those providers to drive innovation. The debate isn’t “monolith vs. composable” – that’s marketing buzz. The debate is revenue growth at speed and scale layered with privacy and security.

So, what’s the alternative?

Clients can benefit more by partnering with software firms like HCLSoftware. Our solutions drive your online revenue in new ways – and at speed, scale, security, and privacy. We help our clients create unique new partnership agreements that drive value directly.

At HCLSoftware, our clients can #ExpectMore+.

It's not a software problem, technology problem or architecture problem. It's a design problem first.

This is the entire reason we created the #HCLCXStudio for our clients. We are a team comprised of 450+ years of digital agency experience. We work with our clients on their design challenges for the purpose of 1) showing how our commerce platform can solve those design challenges, but also 2) to inform our roadmaps of new capabilities, while giving clients insight into areas of important differentiation.

This co-creative approach is where clients really get value. Stop in to learn more about the #CXStudio here.

Why HCL Commerce Cloud?

We drive $220B+ in online annual revenue for our clients. We take the art and science of what we do far from “commodity.” Read more about HCL Commerce Cloud.

We have learned in the last few years that the costs of pure composability are wrought with big service bills and higher people costs and higher risk. Instead, we’ve found a way to “thread the needle” of a proven scalable platform. We’ve partnered with clients through the CX Studio Approach while delivering a complete set of functional depth of our business processes.

The good news is that platforms are not dead. Far from it. Platforms really mean robust depth of function. The best solution is one that scales, is performant, secure, private and allows room for client/vendor partnership to drive new innovation and IP. Come and see why HCLSoftware is trusted and accountable. In fact, we’ll prove it. That’s why we’re called "The Platform of Trust". Learn more here.