How to Choose Between Traditional, Cloud, and Headless Commerce Platforms

 

In the two years since the peak of second wave commerce platforms -- solutions like Magento, Hybris, Demandware and others -- the leading providers have changed dramatically, and an entirely new class of commerce platform has emerged. The third wave of digital commerce solutions is here, but to understand why they matter, and which to choose, we first need to dive into the platform selection of the second wave.

As recently as 2016, deciding which platform to use was pretty simple. If you focused on B2B sales or used other SAP products,  Hybris was your best investment. If you focused on fashion, you would follow your sartorial comrades and turn to the Salesforce Commerce Cloud (back then called Demandware). If you needed the complete code control of Hybris but had a more modest budget, you likely turned to Magento. If you already used Wordpress and wanted to easily add commerce capabilities, you would install the WooCommerce package. If you were a scrappy, digital-only brand you would start your store on Shopify. And if you used Drupal 7 and wanted to plug in commerce to your experience, you would install the Drupal Commerce package.

In the second wave, Magento matured and established a strong market position, WooCommerce use exploded, Shopify Plus grew rapidly, Demandware dominated fashion brands, and Hybris stagnated.

The pain points of the second wave commerce platforms would make themselves known soon after going live. Demandware caused frustration because of the tight coupling of the platform and the front end experience. Hybris had a limited experience layer in building engaging UX, and its promised cost savings was always elusive. Shopify didn’t allow users to customize certain parts of the platform. Deploying Magento 1 probably went well, but then Magento 2 was released and the upgrade path cost as much as moving to a new platform entirely. WooCommerce would work swimmingly for some time, but the technical debt accumulation and the lack of plugin ecosystem compared to mature solutions like Magento would continuously increase ongoing support costs and negatively impact the release agility of the team. And Drupal Commerce came with the same limitations as WooCommerce, plus an even smaller plugin ecosystem, lack of basic commerce features, and a community in a continual state of crisis.

Fast forward to 2018, and a lot has changed:

• Shopify’s enterprise platform, Shopify Plus, has rapidly matured into a powerful solution that offers the scalability and cost savings of regular Shopify with the enterprise flexibility of more traditional platforms.

• The true total cost of ownership of Hybris is clearer, thanks to staggering license and initial implementation fees. SAP has shown no interest in broadening the appear of Hybris beyond a niche platform of B2B SAP customers.

• The rollout of Magento 2, which was built not as an upgrade to Magento 1, but as a completely different platform, has caused retailers to evaluate alternative solutions, and diminished the value of Magento’s strongest asset: its rich ecosystem of plugins (none of which are compatible with Magento 2 without being rebuilt).

• WooCommerce has captured an incredibly impressive amount of market share by being easy to use and fast to deploy.

• The continued success of digitally-native brands like Glossier has increased the investment dollars flowing into startups seeking platforms that they can rapidly deploy and will scale without a large investment.

• Existing API-only headless commerce platforms have matured and a number of ready-to-scale new players have appeared.

• The value of the customer experience— the appreciation of that value by decision makers in commerce—has increased considerably.

The third wave of commerce platforms is characterized by:

1. The maturation of SaaS commerce platforms into viable enterprise solutions.

2. The demonstrable success of digitally-native brands.

3. The emergence of API-only headless platforms that allow commerce to be plugged into an existing customized customer experience.

4. Budget shift from IT to marketing, where the value of marketing spend is more closely measured against its impact to revenue.

The third wave of commerce platforms has also brought an entirely new option: headless solutions.

Commerce Approach	Characteristics	Examples
Traditional	Front and backend experience Full code control Full hosting responsibility Lack of effortless scalability	Magento 1 & 2 WooCommerce SAP Hybris BloomReach
Cloud	Front and backend experience Limited code control Built-in hosting responsibility Effortless scalability	Shopify Plus BigCommerce Salesforce Commerce Cloud
Headless, API only	Backend experience only, no front end Limited backend code control; complete front end code control Hosting responsibility is split between backend (unnecessary) and front end (client responsibility) Effortless backend scalability	Elastic Path Moltin Reaction Commerce OrderCloud.io Drupal + headless Magento Drupal + headless Hybris

The leading third wave commerce platforms are:

• Traditional: Magento 2 and WooCommerce

• Cloud: Shopify Plus

• Headless: Elastic Path, BigCommerce, OrderCloud.io (B2B), and Reaction Commerce

In this new world, how do you select the right platform to best position your organization over the next three to five years? Here’s a matrix to help you decide:

Consideration	Traditional	Cloud	Headless
Do you have an existing customer experience that is instrumented properly and working well for your KPIs?			+1
Do you use a modern open source CMS like Wordpress or Drupal that is tightly coupled to your commerce experience?			+1
Are you starting a new brand?		+1
Do you have uncommon security requirements?	+1		+1
Are your products highly configurable?	+1	+1
Do you more than 100,000 SKUs?	+1		+1
Do you need to run stores in multiple languages in multiple markets?	+1	+1
Are you more content than commerce?			+1
Are you more commerce than content?	+1	+1
Is your budget limited in comparison to your peers?		+1
Do you have complex editorial workflow requirements for publishing content?			+1
Does your marketing team need the ability to rapidly create complex landing pages without talking to engineering?			+1
Are you running Adobe Experience Manager?			+1
Do you need to embed commerce into an existing mobile application, custom hardware device, or brick and mortar flow?			+1
Are you building a typical digital commerce experience with or without integration needs?		+1
Are you using SAP internally?	+1	+1
Are you B2B focused?	+1		+1
Do you have varied, robust promotion requirements?	+1	+1
Are you promotions requirements simple?		+1	+1

 

There is no single platform that is right for all use cases, so carefully consider the factors above to make the best long-term investment for your organization.

Need help evaluating the best platform? Contact us today.