Web-based CRM vendor Salesforce.com Inc. unveiled its Commerce Cloud product at the Shop.org Digital Summit in Dallas, underscoring its strategy to expand its e-commerce services
Commerce Cloud is based on Salesforce’s recent acquisition of web-based e-commerce platform Demandware, and offers brands web, mobile, social and in-store services, in addition to web-based customer-relationship management services already offered by Salesforce. Salesforce in June announced it would pay about $2.8 billion for Demandware; the deal closed in mid-July. Brands including Cole Haan, Puma and Suitsupply, are using the new Commerce Cloud, Salesforce says.
While consumers will place more online orders on smartphones than on any other web-based device by the end of 2017, according to the Q1 2016 Demandware Shopping Index, 90% of retail purchases are still made in stores, Salesforce said Tuesday in announcing Commerce Cloud.
“Today, the costly legacy systems that many brands and retailers use to power their commerce do not support the entire customer journey and lack the flexibility required to connect the variety of channels consumers use for shopping,” Salesforce said in the release. “To stay competitive in this quickly changing landscape, brands need a platform that allows them to engage directly with shoppers on any channel and deliver a personalized experience throughout the customer lifecycle.”
Notable features of Commerce Cloud include Einstein, an artificial intelligence-powered tool for product recommendations and predictive sort, which customizes and sorts search results based on a consumer’s likelihood to engage with the product results. Einstein also includes Salesforce’s Commerce Insights, which Salesforce says will help retailers understand the correlations between the products customers purchase. This tool will aid in merchandising and store planning. Commerce Cloud also supports Apple Pay for the mobile web.
Amsterdam-based Suitsupply.com uses both Salesforce and Demandware and says its online sales grew 25% to 30% last year, with web sales accounting for 30% to 40% of total sales. The retailer launched in 2000 and now has 75 stores in 20 countries and sells online in 90 countries.
Suitsupply says it will soon use Einstein for product recommendations based on previous purchases, what the shopper has looked at and what items go well with items the customer is purchasing, says Nick Botter, manager of marketing technology.
For in-store shoppers, Suitsupply uses technology from Salesforce to display, on a large screen by dressing rooms, what consumers around the world are buying online and in stores at that moment. The digital screen also shows the number of shoppers on Suitsupply.com.
Suitsupply also uses Salesforce to collect customer service ratings from customers for every online and store purchase. Poor ratings go to an appropriate web site or store manager to follow-up on what went wrong.
The retailer also offers a service that allows shoppers to order suits in two sizes but only pay for one after they try on both suits and return the one that doesn’t fit. And, just a few weeks ago, Suitsupply.com launched a service called Box Office that connects shoppers with a personal stylist via Facebook messenger or the chat service WhatsApp. The stylist determines what the shopper’s wardrobe needs, takes note of the styles the shopper prefers, and then ships him a box of products to try. The consumer only pays for what he keeps.
Botter, who says Suitsupply has been using Demandware for four years and Salesforce since April 2015, says combining the two in Commerce Cloud will make using the vendors’ services easier. “With Salesforce everything was possible before, except the commerce part, and now that is integrated,” Botter says.
While Salesforce and Demandware always have delivered their technology through the cloud, with Commerce Cloud they will compete with such major technology providers as Oracle Corp. and Magento Inc. that initially provided on-premise e-commerce software but in recent years have launched cloud-based offerings as this model gained traction. The new Salesforce Commerce Cloud also will compete with NetSuite, which like Demandware has from the start delivered its software via the cloud.
“Salesforce’s acquisition of Demandware will extend the company’s CRM leadership and position it to capture the multibillion dollar digital commerce market,” says Dwight Moore, senior director, retail for Salesforce. “The Salesforce Commerce Cloud will create opportunities for companies to connect with their customers in new ways, giving them access to an enterprise cloud commerce platform, but also Salesforce’s existing sales, service, marketing, communities, analytics, internet of things and platform solutions. And this will benefit customers of both companies.”
The purchase of Demandware comes after Salesforce earlier this year acquired Steelbrick, which provides technology that lets businesses quote prices based on custom configurations. There has since been growing speculation among industry experts that Salesforce would dive further into e-commerce software.
Demandware, which was publicly traded before the acquisition, reported in February that its 2015 revenue increased 44.1% to $75.7 million. Salesforce said in announcing the purchase said that it expects the Demandware acquisition to increase its revenue for the current fiscal year by $100 million to $120 million.
Commerce Cloud powers more than 1,800 e-commerce sites in 53 countries, with more than $16 billion in merchandise sold in 2016, Salesforce says.