Is being agile really an important contributor to the success of retailers today?

Demandware commissioned L2: Business Intelligence[1], a research organization that analyzes and quantifies trends in digital commerce, to conduct a custom research project, “E-commerce Agility” with the objective of answering that and two other key questions:

How is agility defined as it relates to digital commerce?

What enables a brand to be more agile?

L2 devised a comprehensive approach to evaluate 82 brands across various verticals with the goal of addressing each question with a combination of creative methodology, publicly available data and meticulous analysis.[2] L2’s founder Scott Galloway presented the findings this week at the Demandware XChange Conference in Las Vegas.

The Results:

L2 concluded that brands on cloud platforms excelled in many measurable indicators of agility. The advantages of a cloud platform over alternative solutions become particularly important as consumer tastes and technologies evolve and the need to dynamically execute strategic, technical and functionality changes continues unabated.

L2 cross-referenced 82 brands across 3 different dimensions: choice of commerce platform, their degree of agility (demonstrated via feature changes, content modifications, and new sites), and financial performance over the last 5 years. The results indicate that brands that have adopted cloud-based platforms ranked higher on agility vs. those  on non-cloud platforms. This in turn resulted in exceptional financial growth:[3]

 

  • On average, brands that leveraged a cloud commerce platform had the highest number of proactive changes to their sites, with 18 feature or content modifications, compared to 15 changes exhibited by brands managed on an on-premise platform, and 13 by brands utilizing an in-house solution
  • The brands using cloud-based commerce solutions reported an average annual sales growth rate of 12%, compared to 9% and 6% with on-premise and in-house platforms, respectively.

 

 

Defining and Measuring Agility                                                                     

I wrote in a prior blog post about the importance of speed in commerce, but agility encompasses much more than just speed. It is the nimbleness to act and react to market changes, to adopt promising yet not quite mainstream technology innovations, and embrace a reasonable level of risk for the promise of greater reward. L2 defined a methodology to identify agile brands focusing on how well they executed the following:

  • creating dynamic content rapidly
  • integrating new digital technologies
  • entering new markets

Enabling Agility

Business agility requires the appropriate platform combined with the level of speed, flexibility, and execution that brands need to keep pace with changing consumer expectations. L2 focused their research on the three categories of solutions available in the market to assess the impact that platform choice has on a retailer’s agility.

  • custom/in-house applications
  • cloud-based platforms
  • on-premise software

Download the full report here.

 

[1] http://www.l2inc.com/about

[2] “E-Commerce Agility” report by L2: Business Intelligence

[3] “E-Commerce Agility” report by L2: Business Intelligence