The world of enterprise commerce and enterprise software has been rocked in recent decades by successive upheavals, including the rise of cloud computing, the growth of SaaS tools and platforms, and the maturity of a widely differentiated and feature-rich market of ecommerce platforms.
For enterprise leaders, the question has shifted from keeping up to getting ahead. A digital strategy is table stakes, and an ecommerce presence is a baseline expectation. What was once innovation has become a first step toward competitiveness in the modern era.
To get ahead and stay ahead, the best enterprise leaders have shifted from thinking of software as an additive value to software as a transformative value. Migration, rebuilding, and refactoring aren’t tasks to be taken lightly, but letting enterprise software become stagnant is even riskier.
According to TrustRadius research, nearly one-half of all traffic hitting ecommerce platform websites is now coming from organizations with more than 1,000 employees. It’s clear that enterprise leaders are reconsidering what their software needs are and rethinking the role of enterprise commerce in their long-term business strategies.
What is enterprise commerce?
Enterprise commerce is a term used to describe a large, enterprise-level business that sells its services and products to individuals and other organizations. Typically, companies that fall under this umbrella generate hundreds of millions to billions of dollars in revenue. They also tend to have expansive product lines and a large global brand presence.
When companies reach this level of maturity, they take a closer look at their ecommerce solutions and ask themselves critical questions. How can you build checkout features that are reliable despite massive user fluctuations across holidays and regions? How can you maintain security systems that protect your customers’ privacy? How can you acquire all the customers they need to survive and build a retention strategy that measures lifetime account value, conversion rates, and average order value?
In many cases, enterprise-level merchants ultimately decide to migrate to a solution that gives them new growth levers to drive incremental scale across different areas of their business. While this sounds like a logical next step, many companies struggle to find the right enterprise commerce solution for their specific needs—and the process often stalls before the selection process even begins.
Enterprise commerce solutions
The search for the right enterprise commerce solution is not an easy one. A commerce solution is both central and pivotal, where central means many stakeholders will want to advise on the decision, and pivotal means leaders will need to draw out the implications and consequences of choosing one solution and not another.
Making this all the more complex is that commerce solutions don’t merely vary feature by feature, and enterprise leaders can’t simply draw a list of pros and cons. Different solutions pose very different strategies, and a perfect solution that doesn’t match an enterprise’s strategy won’t work.
Before the selection process even begins, enterprises will have to answer a range of questions to inform their search.
How should the solution be hosted and delivered?
Many legacy commerce solutions are on-premises, but modern solutions tend to be cloud-based. But cloud-based solutions vary. Some are delivered as a service, meaning most, if not all, of the cloud management is taken care of by the vendor. Others require more infrastructure management (but potentially more flexibility) on the part of the enterprise.
How should the solution be architected?
Many legacy tech stacks are monolithic, meaning the entire application is housed inside a single application. Modern ecommerce solutions provide a range of different approaches. Some provide a headless architecture that splits the front end and back end, some provide a web of microservices that separates all components into distinct services, and some provide a platform that provides most or all of the features an enterprise might need out of the box.
Will the solution enable innovation or create lock-in?
Many of the enterprises searching for a new commerce solution are doing so because they’re tired of tech debt and tired of spending more time and resources on less innovative progress than their competitors. Modern commerce solutions recognize the need to innovate, but each will pose different limitations.
For example, an all-in-one solution might allow an enterprise to catch up to the competition but limit further innovation if those competitors keep innovating. A composable solution might have a similar effect, depending on what a given enterprise can actually support. And many microservices-based solutions promise flexibility, but enterprises can struggle under the weight of the resulting complexity and end up less flexible than before.
With these questions in mind, the search for the right enterprise ecommerce platform is less about listing every commerce solution and more about determining what the enterprise’s current needs are and what business goals they’ll have to find which solution best aligns with those goals.
Some of the leading enterprise commerce solutions include:
- Shopify, a headless enterprise ecommerce SaaS platform that provides core functionality via a robust platform as well as extensibility via Commerce Components.
- Salesforce Commerce Cloud (formerly known as Demandware), an enterprise commerce solution that offers a headless option and focuses on omnichannel options.
- BigCommerce Enterprise, a SaaS ecommerce solution that started as an online sales platform and offers a headless structure and a range of open APIs for front-end customization.
- Adobe Commerce (formerly known as Magento), an enterprise commerce solution that can be hosted in the cloud or on-premises and offers a variety of third-party integrations.
- Oracle Commerce Cloud, an enterprise commerce solution with a multilayered architecture shadowed by recent criticism.
As enterprises search, they’ll have to carefully evaluate trade-offs—including the possibility that the right solution for a particular enterprise might impose few, if any, trade-offs compared to another solution.
For example, when MZ Wallace migrated from Salesforce Commerce Cloud to Shopify Plus, COO and CFO Kevin Mogyoros reported, “We’re spending less and driving sales more efficiently. It’s the best of both worlds.” When enterprises fit software to strategy well enough, benefits can far outstrip any would-be trade-offs.
The role of enterprise software in enterprise commerce
For decades, enterprises have faced the challenge of digital transformation.
McKinsey research shows that nearly two-thirds of companies have invested in SaaS products or other modern software products. Many more companies have invested in on-premises software that’s often deemed “legacy” but still shows a commitment to digital technologies.
Digital transformation has come and gone.
As enterprises evaluate the role and impact of enterprise software, the framework has to shift from having or not having the technology to the longer, more sustained work of iterating, migrating, and evolving that technology.
According to further McKinsey research, almost 70% of top economic performers use software to differentiate them from their competitors. The authors of the research explain that many enterprises “still tend to look at software as a capability that they can bolt onto their existing business” and that those companies are missing out on the still-growing benefits of software innovation.
In these companies, enterprise software exists but has a diminished role. As a result, legacy enterprise software can create a dangerous downward spiral as tech debt grows, software developers become disengaged, and enterprises fall further and further behind a growing ecommerce market.
With those figures in mind, it’s no surprise that tech debt has become a big drag on developers. Stripe research shows that 52% of developers believe tech debt hinders developer productivity, and 76% believe tech debt damages personal morale.
The result is that even enterprises that nominally embraced digital transformation are frequently stuck with legacy software systems loaded with tech debt that discourages innovation, which includes experimenting with ecommerce in concert with more traditional commerce channels such as B2C, retail, and B2B. As a result, the greatest cost of this isn’t yet on the balance sheet.
Morgan Stanley research shows that the ecommerce market is still growing, and the firm predicts the market will grow from $3.3 trillion (as measured in 2022) to $5.4 trillion in 2026. And this isn’t merely an armchair prediction.
When the pandemic swept the world, many new customers tried ecommerce, and the industry received a bump. New research is showing that this bump wasn’t a fluke. Forrester predicted that online retail sales will reach $1.6 trillion by 2027—in just the United States.
Together, these results show that the ecommerce market is on track to grow rapidly in the coming years and that there are millions of high-potential customers ready to be gained. But because ecommerce is a growth opportunity, enterprises will have to rethink the role of enterprise software in their organizations and figure out a process for continuous improvement.
The needs and expectations of enterprise customers
Finding and choosing enterprise-grade software isn’t an easy task. At the enterprise scale, security and reliability risks are greater, and there are many more parties and stakeholders involved in every decision.
These are baseline features that apply almost universally across companies at the enterprise level. Many vendors with otherwise interesting products are eliminated at this early point in the vendor selection stage, leaving enterprises with a limited pool of vendors and products to choose from.
Beyond these baseline features, enterprises are expecting platforms to be both dependable and flexible. Enterprise commerce tools need to be scalable enough for usage fluctuations, secure enough to protect high volumes of high-value data, and comprehensive enough to provide the many features an enterprise needs to serve a vast variety of needs. They also need to be flexible enough so that enterprise customers can adapt the software to their specific context and use cases, and extendable so that enterprise customers can build on top of the tool as needs change.
These are just a few reasons why Shopify recently launched Commerce Components by Shopify (CCS), which gives enterprise retailers a unique combination of development flexibility and access to world-class commerce components that are ready to use out of the box.
Commerce Components by Shopify gives enterprise retailers a unique combination of connectivity, optionality, and innovation, including:
- Access to high-performing commerce components, including our checkout, cart, search, and internationalization.
- Flexibility to integrate existing services with Shopify’s modular components via an API layer, giving you a clearer path to building unique customer experiences across all devices and touch points.
- Unmatched scale and support from hundreds of Shopify production engineers, who work hard to ensure you have the fastest, most resilient online stores on the planet, giving you the freedom to focus on your innovation roadmap.
Commerce Components by Shopify also offers a unique level of pre and post-launch support from a combination of world-class client success managers, solutions engineers, and architects. Merchants can also tap into our partnership ecosystem and system integrators to build ecommerce solutions that are are agile, performant, and ultimately increase conversion.