The Power of the Cloud

This week I had the pleasure of attending Demandware XChange 2015. The conference provided a great opportunity to meet leading retailers and talk retention. One common theme I heard throughout the conference - how cloud-based businesses are more scalable, nimble and ultimately yield better results. This is fitting given Demandware’s LINK Marketplace, which gives their customers the ability to continue to grow their business through innovative partner features.

One of the highlights of the conference was a talk by Scott Galloway, Clinical Professor of Marketing at NYU Stern School of Business and Founder and CEO of L2. Scott presented L2’s research that showed, on average, merchants using cloud solutions grow 12% more than those using an on-premise platform. Companies using cloud solutions have an easier time scaling and being nimble. While custom solutions are great when they’re working, they require a lot of work to build and maintain. Whereas cloud solutions take less time and maintenance, so on average you’ll get a better return (time + money / results) than a custom solution. It’s telling then that L2 hasn’t seen any custom builds in the last 24 months.

While there were a number of early players in the eCommerce game, the ones who weren’t first and took their time working on finding the best cloud-based solutions have seen greater benefits than those early adopters.

Adapt or Die

Galloway expressed that pure-play commerce merchants are at risk given the multi-channel nature of consumers. While consumers are researching and shopping on multiple devices, they still shop in store, and often want to pick up a product for immediate satisfaction, so it’s key for pure-play commerce merchants to evaluate ways to be closer to the consumer. Leading eCommerce retailers like Warby Parker, Bonobos, and Amazon are all opening up physical stores.

Luxury was also a hot topic. All retailers covet the reach and margins of luxury brands, and none is more admired than Apple. Galloway addressed how, at it’s core, Apple is truly a luxury brand. Their innovative approach is crushing the competition. Example - on day 1 of the Apple watch launch, they sold 1,244,100 devices, in contrast in 1 year Motorola, LG, and Samsung sold 720,000 wearable devices.

Overall, XChange was a terrific conference full of great content and networking. Many thanks to the team at Demandware for organizing this event!

 

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