Realizing a Decisive Advantage in Digital Commerce Through Economic Flexibility

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

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The stakeholders of today’s digital commerce and online shopping properties are currently afforded several significant growth opportunities, even in the face of today’s often uncertain times. That is, if they can successfully adapt to shifting online buying habits. The twin impacts of the pandemic and the resulting economic turbulence has indeed changed both consumer needs and perceptions.

These buyer shifts and the growth opportunity they represent are genuine and significant. For example, more consumers now shop online due to the pandemic according to United Nations Conference on Trade and Development data, with 3% overall growth globally from 2019 to 2020. This represents millions of new online buyers that can be readily tapped by those ready to meet their needs. Furthermore, as buying habits shift towards online, consumers may also be attracted to new digital experiences. This could quickly expand to buying experiences that weren’t considered online before, such as purchasing houses or using healthcare services.

The lesson: Those that adapted have tended to benefit most from these shifts. Yet, retailers have also encountered difficult economic times too, with sales having dipped measurably in recent months due to economic uncertainty. With a generally unclear sense of the near future, it’s certainly understandable that consumers may have interest in greater economic flexibility, such as more convenient payment options, from their preferred online shopping sites.

Solutions addressing economic objections directly in-channel have high appeal

The friction in the average digital shopping experience remains significant however, especially during the checkout process. In fact, today's e-commerce cart abandonment rate has risen to just over 70%, a rate it has remained at for years. This is because available means of payment or ease-of-credit-qualification has become a leading reason for cart abandonment. The latest data suggests that e-commerce sites seeking to reduce shopping cart abandonment must focus on reducing the friction directly in the payment process itself, where the main resistance tends to take place. This means e-commerce sites seeking to reduce shopping cart abandonment must focus on reducing the friction directly in the payment process itself, where the main resistance tends to take place.

Reducing abandonment of the typical e-commerce buying session has three primary solutions that can help reduce friction and increase successful conversions:

• Easier navigation and user experience.  Usability is intrinsic to the digital commerce experience, but it can be time-consuming and costly to implement and test.
• Just-in-time offers/coupons. Reducing the cost of the sales transaction is a key way to increase conversions, but negatively impacts margins.
• Flexible payment options. Making it easier for shoppers to use services such as buy now and pay later removes friction with little effort or risk on the part of the e-commerce site.

The Shortest Route to Offering Economic Flexibility To Online Consumers

While online storefronts have numerous options to address cart abandonment and e-commerce friction in general, an easier way is simply to use available offerings provided by existing payment partners. Because these partners are likely already integrated into the e-commerce site, they can be quickly activated and used to help reduce buying friction. This in turn offers more payment options to buyers with the least amount of time and effort and can directly help reduce cart abandonment.

Almost all e-commerce sites already have trusted payment partners that have flexible payment options ready to turn on. These almost always offer the shortest time to value for site owners and operators. In fact, in my current analysis, new payment options from trusted partners are the fastest route to conversion growth and higher customer lifetime value (CLV.) That isn’t all: In my research into modern e-commerce payment solutions, I have found that more flexible payment options don’t just address cart abandonment, it has other downstream benefits as well.

Figure 1: Overall cost creates the friction in the online buyer journey

The key downstream benefits of high economic flexibility in the customer jouney are:

• Customer retention/repurchasing. Shoppers who are given additional options to pay for their purchase tend to find the experience both helpful and rewarding and thus they tend to favor that site again says in-depth research.
• Higher customer lifetime value (CLV). Existing customers will convert more often and for larger amounts when they are given access to economic flexibility. This increases the key metric of CLV, which is the gold standard for customer value.

The key to rapid and successful rollout of shopping options offering economic flexibility is the use of trusted partners, who consumers may recognize and be comfortable with from the start.

A New Industry Example of Economic Flexibility: PayPal’s Buy Now Pay Later Solution

PayPal has recently entered in the market with a major offering that provides consumers with a way to buy now and pay later with a very simple and straightforward process. Pay in 4 from PayPal lets consumers split their payments for an e-commerce transaction into 4 equal payments, one every two weeks, starting the day they make their purchase. Pay in 4 is interest-free, has no impact on a consumer’s credit score and is fully backed by PayPal’s well-known brand.

Pay in 4 is prominently offered through the regular PayPal payment option in existing sites, making it extremely simple to use. One click makes it easy for an online shopper to understand the terms and another click to agree to them.

Figure 2: Pay in 4 payment options are typically included in the existing PayPal checkout experience

A leading adopter of Pay in 4 is the well-known food shopping service, Omaha Steaks. Omaha Steaks sought to offer their customers flexible payment options and evaluated Pay in 4 as a primary solution. As a key step in the evaluation, they chose to A/B test the economic flexibility solution to ensure the results were net positive.

During the test, Omaha Steaks displayed dynamic messaging about Pay in 4 to 65% of their customers on both product pages and in their shopping cart. Within a few months, the company saw an increase in both conversion and Average Order Value (AOV). As a result, they decided to roll out Pay in 4 to 100% of their customers in March 2021. Pay in 4 has since cited a 10.4% increase in AOV for those that use it in their messaging in the cart to customers.

The best part is the overall effort to enable Pay in 4 by most merchants is lower than the other ways of reducing friction that are listed above. Integrate easily and add dynamic Pay in 4 messaging with just a few lines of code.

Bottom line: New Innovative Payment Options Boost E-commerce Sales

E-commerce firms must ride industry and consumer trends successfully to continue to thrive. This means adapting to current market conditions as well as to specific customers’ needs to achieve sustainable growth.

Those who aim at directly reducing one of the largest sources of conversion friction — given it is one of the most significant sales performance advantages available to most merchants today — is an easier option for most e-commerce sites today.

Payment options such as PayPal Pay in 4 are leading examples of trusted payment options likely to drive growth in sales and customer acquisition/retention through offering shoppers more economic flexibility in a highly consumable way.

Learn more about PayPal’s buy now pay later solutions.

Additional Reading

A New Digital Experience Maturity Model for Improved Business Outcomes

How CXOs Can Attain Minimum Viable Digital Experience for Customers, Employees, and Partners

The Digital Transformation of Back-End Customer Experience: What Leaders of The New C-Suite Are Thinking

Matrix Commerce New C-Suite Next-Generation Customer Experience Tech Optimization Innovation & Product-led Growth Future of Work AI ML Machine Learning LLMs Agentic AI Generative AI Analytics Automation B2B B2C CX EX Employee Experience HR HCM business Marketing SaaS PaaS IaaS Supply Chain Growth Cloud Digital Transformation Disruptive Technology eCommerce Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP Leadership finance Customer Service Content Management Collaboration M&A Enterprise Service Chief Information Officer Chief Marketing Officer Chief Digital Officer Chief Revenue Officer Chief Technology Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Executive Officer Chief Operating Officer Chief Customer Officer Chief People Officer Chief Human Resources Officer

Big Idea: ESG Solutions Address the Impending ESG Imperative

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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News Analysis: Unpacking CCP China's Crypto Crackdown

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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Matrix Commerce Innovation & Product-led Growth Next-Generation Customer Experience Future of Work Marketing Transformation Digital Safety, Privacy & Cybersecurity Distillation Aftershots Data to Decisions Tech Optimization Insider Associates SoftwareInsider Metaverse AR Leadership Chief Customer Officer Chief Procurement Officer Chief Digital Officer Chief Information Officer Chief Technology Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Executive Officer Chief Operating Officer Chief Experience Officer

Crisis/Incident Management in the Digital Era

Andy Thurai

Vice President and Principal Analyst
Constellation Research

About Andy Thurai Andy Thurai is an accomplished IT executive, strategist, advisor, enterprise architect and evangelist with more than 25 years of experience in executive, technical, and architectural leadership positions at companies such as IBM, Intel, BMC, Nortel, and Oracle. Andy has written more than 100 articles on emerging technology topics for publications such as Forbes, The New Stack, AI World, VentureBeat, DevOps.com, GigaOm and Wired. Andy’s fields of interest and expertise include AIOps, ITOps, Observability, Artificial Intelligence, Machine Learning, Cloud, Edge, and other enterprise software. His strength is selling technology to the CxO audience with a value proposition rather than the usual technology sales pitch. Find more details and samples of Andy’s work on his…...

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When it comes to crisis and incident management in the cloud/digital era, HOPE IS NOT A STRATEGY!

An Incident is defined as unplanned downtime, or interruption, that either partially or fully disrupts a service by offering a lesser quality of service to the users. If the Incident is major, then it is a crisis!

When it starts to affect the quality of service delivered to the customers, it becomes an issue, as most service provides have service level agreements with the consumers that often have penalties built in.

As I continue my research in these areas, and after talking to multiple clients, I have come to the realization that most enterprises are not set up to handle IT-related incidents or crises in real time. The classic legacy enterprises are set up to deal with crises in old-fashioned ways, without considering the Cloud or the SaaS model, and social media venting brings another quirk. Newer digital native companies do not put much emphasis on crisis management, from what I have seen.

Especially with the need and demand for "always-on," opportunities are more than ever to break, and incidents do not wait for a convenient time. Problems can, and often do, happen on weekends, holidays, or weeknights when no one is paying attention. When an incident happens, a properly prepared enterprise must be in a situation to identify, assess, manage, solve, and effectively communicate it to the customers.

Another key issue to note here is the difference between security and service incidents. A security incident is when either data leakage or data breach happens. The mitigation and crisis management there involves a different set of procedures from disabling the accounts to notifying stakeholders and account owners and escalating the issue to security and identity teams. A service incident is when a service disruption happens, either partially or fully. It needs to be escalated to DevOps, developers, and Ops teams. Since they are similar, some of the crisis management procedures might overlap. But if your support teams are not aware of the right escalation process, then they might be sending critical alerts up the wrong channel when minutes matter in a critical situation. For the sake of this article, I am going to be discussing only service interruptions, though a lot of parallels can be drawn to a security incident as well.

Avoid incidents when possible

Avoidance is better than fixing issues in any situation. There are many things an enterprise can do to avoid situations, such as vulnerability audits, early warning monitoring, code profile audits, release review committees, anomaly detection, etc. One should also invest in proper observability, monitoring, logging, and tracing solutions. I have written many articles on those areas as well; they are too complex to cover in detail here.

Prepare for the unexpected

With most enterprises, there is no preparation or plan of action when an incident happens. In the digital world, incidents do not wait around for days to be solved or managed. If you let social media take over, it will. Sometimes it can even have a mind of its own. When you are not telling the story, the social media pundits will be telling your story for you.

Identify the incident before others do

I wrote a few articles on this topic. In my latest article, "In the digital economy, you should fail fast, but you also must recover fast," I discuss the need for speed to find issues faster than your customers or partners can. Software development has fully adopted the DevOps and agile principles, but the Ops teams have not fully embraced the DevOps methodologies. For example, the older monitoring systems, whether they are application performance monitoring (APM), infrastructure monitoring, or digital experience monitoring (DEM) systems, can also find if there is a service interruption fairly quickly. However, identifying the microservice that is causing the problem, or the changes that went into effect that caused this issue, seem to be complex in the current landscape. I have written about the need for observability and for finding the issues faster at the speed of failure repeatedly.

Act quickly and decisively

When major incidents happen, it should be an all-hands on deck situation. As soon as a critical incident (Sev. 1) is identified, an incident commander should be assigned to the incident, a collaborative war room (virtual or physical) must be immediately opened, and proper service owners must be invited. If possible, the issue must be escalated immediately to the right owner who can solve the problem rather than going through the workflow process of L1 through L3, etc. In the collaborative war room, often finger-pointing and blaming someone else is quite common, but that will delay the process further. In addition, if too many people are invited to these collaborative war rooms, there has to be a mechanism to identify mean-time-to-innocence (MTTI) so anyone who is invited can continue their productive work by leaving if they are not directly related and cannot assist in solving the issue.

Own your story on your digital channels.

When a severity 1 or a major service interruption happens, your users need to know, your service owners need to know, and your executives need to know. In other words, everyone who has skin in the game should know. Part of it would be external communication. At a very minimum, there has to be a status page that will display the status and quality of service, so everyone is aware of the service status all the time. In addition, an initial explanation of what went wrong, what are you doing to fix it, and with a possible ETA should be posted either as a status update or on regular posts on LinkedIn, Twitter, Facebook, and other social media platforms where your enterprise brand is present. Going dark on social media will only add fuel to the fire. Your users know your services are down. If they get no updates from you, speculators, or even competitors, will spread rumors to ruin your brand.

This is where most digital companies are weak as they are not prepared, which can make or break an SMB enterprise. Real-time crisis and reputation management are crucial in those critical moments while engineers and support teams are trying to solve the problem. It is also a good idea to use sentiment analysis and reputation tools to figure out who is saying extremely negative things and to try to either take them offline to deal with them directly or respond in kind to avoid further escalation.

Do a blameless post-mortem

A common pattern I see across organizations is after the crisis is solved and the incident is fixed, everyone seems to move on to the next issue quickly. It could be because there are too many issues that the support, DevOps, and Ops teams are overwhelmed, or they do not think it is necessary to analyze what or why this happened. An especially important part of crisis/incident management is to figure out what went wrong, why it went wrong, and more importantly how can you fix this once and for good, so this will not happen ever again. After figuring out a solution, document it properly. You also need to have a repository to store these solutions so in the unfortunate incident that it happens again, you know how to solve this quickly and decisively.

Follow-up

In addition, discuss the situation with your top customers who were affected by it, what you did to solve the issue, how you fixed it so it will not repeat, but more importantly, discuss how you were prepared for the incident before it happened. This instills huge confidence in your brand. Not only will you not lose customers, but you will get more because of how you handled it.

In addition, the general advice from crisis management firms would be to cancel any extravagant events that are planned in the immediate future. If your critical services were down for days, but your executives were having a huge conference in Vegas, the social media world would be at it for days. Monitor social media platforms (LinkedIn, Twitter, Facebook at a minimum or whatever other social media platforms your company has a presence on, including negative comments on your own blogsites) for tone; you can even use AI-based sentiment analysis tools to identify still unsatisfied customers to discuss their concerns and how you can address them. Until these concerns are addressed, your incident is not completely solved.

Another best practice would be to avoid hype content or marketing buzz for a while after a major incident happens. I have seen companies go on with the plan and get a backlash from customers that they are all talk and nothing really works.

Conclusion

Let's face it: every enterprise is going to face this sooner than later. No one is invincible. The question is, are you ready to deal with it when it happens to you? The ones who handle it properly can win the customers' confidence, showing they are prepared to handle future incidents if they were to happen again.

Do you earn your customers' trust by doing this the right way, or do you lose it by botching and covering this up? That will define you going forward.

At Constellation research, we advise companies on tool selection, best practices, trends, and proper IT incident/crisis management setup for the cloud era so you can be ready when it happens to you. We also advise the customers in the RFP, POC, and vendor contract negotiation process as needed.  

 

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HOT TAKE: Intuit Ran the Numbers and Email Won Big

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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Those of you who know me know that this statement is not one to be taken lightly: this news left me speechless. RIGHT??? Doesn’t happen often. And it was only for a moment. But when I first heard the news that Intuit had agreed to buy the notoriously bootstrapped email marketing platform Mailchimp for $12 Billion in cash and stock, I was flabbergasted. I was flummoxed. I was ALL of the old-timey feelings for utterly confused.

That is until I remembered this one line from a keynote I once watched: “I'd like to see business go back to a model where everybody believes that marketing is the center of what every company has to do.”

It was 2003 and it was the first time the CMO Council had gathered for what would become an annual event. The keynote address was delivered by the Chairman of the Board at Intuit…the former CEO with “humble roots” as a CMO. Bill Campbell didn’t just believe marketing was important. He truly believed that real marketing—the act of a brand engaging with and telling shared stories with a customer—should drive growth.

I honestly had not thought about that line from Campbell’s keynote until I read the Twitter statement from current Intuit CEO, Sasan Goodarzi, on the decision for the acquisition: “Together, we will deliver an innovative customer growth platform to help our customers grow and run their businesses with confidence.”

So let’s get into the weeds on this one. Intuit has officially announced plans to acquire bootstrapped mail phenom, MailChimp. Headquartered in Atlanta (which Mailchimp CEO Ben Chestnut has already dubbed Intuit’s east coast hub) with a roster of over 13 million users, Mailchimp represents a growth-driving solution for an SMB market that was ravaged in the pandemic.

A report from Intuit Quickbooks noted that in April 2020 alone, SMBs lost $4.6 billion in monthly revenue. Goodarzi is apparently betting that by binding a growth engine like marketing automation to back office finance resources, SMBs will regain pre-pandemic confidence in growth and business.

But the biggest hint as to WHY this acquisition happened isn’t in the power of the platforms being brought together or even Intuit buying its customer base a giant $12 billion dollar band-aid. The purchase driver is in the data…and they pretty much said so. In fact in an investor call held on Monday September 13, Goodarzi noted that Mailchip sits on “a lot of customer data. We (Intuit Quickbooks) have all the purchase data.”

This telegraphs, in a pretty direct and loud manner, that this move isn’t just to benefit Quickbooks, or even Intuit’s SMB customer base. This is a data and intelligence service play for enterprises that often struggle to gain access to intelligence based on customer behavior and customer transaction intelligence.

I’ll wait for everyone to search for books on “CMO / CFO Alignment”…yeah…there aren’t any…yet. But don’t be shocked if someone at Intuit releases one soon.

But maybe that’s where Intuit has been all along. Afterall, they had, at their helm for many years, a coach and a leader who was one of the first CMOs to step into a CEO role without so much as breaking a sweat.

What Intuit has done has shifted the center of gravity of a “business graph”—something Ray has been poking people on for years now— that is purpose-built to make better decisions at both speed and scale. (Check out this podcast where Ray breaks down the value of a business graph: https://lochhead.com/ray-wang-2/) Transaction and account data alone was never going to get there…the graph demands a massive amount of data on customer event and behavior…an overflowing firehose of data that…ohhh I don’t know…a sales and marketing engagement and automation engine like Mailchimp can provide. It is about helping business leaders make better, and perhaps as the Intuit Quickbooks Mailchimp Customer Intelligence (name totally made up for the record) solution moves farther down the AI path, more automated decisions.

So, does this mean H&R Block is suddenly in the market for a sales and marketing engagement tool. Dear lord I hope not. But, it sure shines a spotlight on solutions like Zoho One with its business operations platform for small business. What this ALSO means is that customer engagement engines need to innovate and advance quickly on just how their data can do more than parrot back campaign success metrics, CTRs and opens.

No matter where this new marriage leads: to a high powered decision velocity machine built to accelerate the path from micro to small to mid-sized business, or into a whole new realm of business intelligence for Intuit, there is one thing I know for sure: Campbell, who passed in 2016, is sitting back on a spiritual football or rugby field somewhere, having a pretty good laugh.

Marketing Transformation Next-Generation Customer Experience Chief Customer Officer Chief Executive Officer Chief Financial Officer Chief Marketing Officer Chief Data Officer

HOT TAKE: DAM Good Buy as Acquia Expands DXP with Widen Pickup

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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For the record, I love the DAM space…and not just because it lets me say things like DAM space, DAM ShortList and DAM solution. Saying DAM all the time is just DAM fun. I’m adult enough to admit I’m not adult enough to let that DAM opportunity pass. But a DAM is a critical tool that has oddly been confused with or replaced by cloud file storage solutions that allow for controlled file transfer and access…please…I beg you…don’t make error in content judgement. It is part of the last mile of experience delivery. Stop thinking it is just a place to stick brand police stuff.

Now with that out of the way, let’s focus in on the news of the day and why it should turn some heads. Acquia, the digital darling of the open-source developer set, has announced their definitive agreement to acquire Widen, one of the longest running names in assets. Terms have not been made public at this point.

Founded in 1948 as Widen Engraving, this family-owned business has literally been at the heart of turning words and photos into engagement, engraving type onto plates which then churned newsprint. As print turned into color, Widen evolved into a print leader producing assets from brochures to ads. As print turned into digital, Widen evolved yet again applying the organization, collaboration and distribution processes and mindsets required to successfully create printed assets into a comprehensive digital asset management solution. Widen has literally been there from the earliest days when assets started to shift buyer and market perceptions.

Acquia is best known for providing the building blocks for how experiences are developed, displayed and deployed across an expanding list of digital presentation layers. Acquia splits into two product clouds, Drupal Cloud for composing and deploying experiences and Marketing Cloud for engagement development and orchestration. Acquia’s CMS comes in the exact size and shape an enterprise needs with traditional, hybrid and headless applications available, enabling content to flow where and how organizations intend and envision. Acquia’s Marketing Cloud takes that same open-source spirit of their CMS and applies it to how customer experiences and engagements are developed, deployed and optimized with a CDP, marketing automation and journey orchestration capabilities.

Now…an open-source digital experience platform has brought on a seriously enterprise grade DAM and product information management (PIM) solution for an end-to-end content operations and experience play. I like both of these solutions for very different reasons having named Acquia to the recent Constellation Shortlist for DXP and Widen to the ShortLists for DAM for High Volume Commerce, DAM for DX and PIM. This is a bit like the ultimate ShortList mash up. And gotta say...I like it. The thing to keep an eye on is where the DXP heads next.

For so many in the DXP space, focus has been on unifying the tools and the data that power the most powerful digital experiences from websites, mobile apps to advertising and email campaigns. The addition of a DAM and PIM advance the toolkit of what can be used to aid in telling those content stories and delivering on those moments. While Acquia remains the developer’s friend, tools like Widen add to the growing demand for marketing and business unit friendly solutions that make the work of engaging with a connected customer through cohesive, personalized and relevant stories easier and more secure. It starts to empower engagement teams to think beyond the confines of an asset they have created or a channel they have built and manage.

The real power in these systems is in the intelligence they can deliver BACK to the organization…HOW are these moments in an asset’s journey helping optimize the next step or next engagement? Are the moments of content engagement occurring where, when and as long as we expect? Is there more to content’s value than its ability to appear where we ask it to appear? What can the content and drupal cloud tell the marketing cloud about the customer? That’s where the DAM rubber meets the road.

What is taking shape in this Acquia acquisition is a clear shot across the bow of the engagement and experience players like Adobe, Salesforce and Oracle. Acquia isn’t just “that Drupal CMS” or that open-source “build it yourself kit.” The intentional expansion of the Acquia DXP signals a clear intention to mix it up with those marketing and experience cloud players. With the addition of Widen to the arsenal, content has a whole new toolkit and a pretty big sandbox to grow in.

Marketing Transformation Chief Information Officer Chief Marketing Officer Chief Digital Officer

How Headless Revolutionized Content Management

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

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In my new research report exploring the future of content management, I examined the many new attributes and capabilities that a vital new category of content management services provides. Known as advanced content management, some of these improvements offered by these new types of platforms have led to a literal revolution in the art-of-the-possible when it comes to managing today's complex content ecosystems. However, the advancements have been quite rapid and so I find that that many organizations are still in the process of learning to fully appreciate and effectively absorb how these potent new features can transform what they do.

As shown in the first figure below, there are a number of compelling new capabilities that have emerged from hard won lessons over the years from both the traditional content management as well as enterprise content management (CMS) industries as they sought to reconcile early generations of such tools with what organizations actually needed to do with their content as a business and lessons learned in general from the last decade of operational experiences in the field.

For a limited time: A complimentary copy of my new report on The Future of Content Management

Of all these advances, however, there is one that stands head and shoulders above the others. That's because it has become a foundational capability that makes today’s more complex and sophisticated content scenarios not just possible, but straightforward and easy to manage.

Specifically, I am referring to the so-called “headless” capability of today's advanced content management systems. In the past, the traditional content management approach was to manage content by putting everything in a single bucket: Content, images, HTML, CSS, everything. This made it impossible to reuse the content easily because it was commingled with code. Even worse, all content typically was handled inside a single platform, not recognizing that today content must be managed from and delivered to whatever digtal touchpoint it needs to be on to satisfy the needs of the business with as little effort as possible.

As digital platforms have evolved to fill far more niches in our businesses, the need for more flexible ccntent services has emerged. Now, enterprises are developing websites, mobile sites, apps, digital displays, connected devices, and conversational interfaces that need access to content stores, wherever they might be, or perhaps one master content source at a central headquarters.

What is headless content management

As I highlighted in my research report, a headless CMS is any type of back-end content management system where the content repository body is separated or decoupled from the presentation layer, or the head. Content that is housed in a headless CMS is delivered via an industry standard interface (an API) for seamless display across different devices. 

By defining this simple industry standard, the content management industry, and all the platforms that support it, have enabled virtually any kind of arrangement of different content systems into one functioning ecosystem. 

The actual benefits of headless content management

One advantage of this decoupled approach is that content can be sent via the interface to multiple display types, for example, mobile, wearable, and Internet of Things (IoT) devices from a single content management system, alongside the website it's hosted on. A minor disadvantage of headless, however, is the requirement to maintain two or more separate content systems for a single site, which can require more resources. However, in practice, organizations often maintain different content management systems to their advantage because they offer different features that are uniquely designed for the strengths of a particular channel or use case.

Those who not only adopt headless content management standards for their content management systems but fully take advantage of what it offers, can realize the following benefits.

• A non-linear productivity improvement. The more content management systems an organization has, the more content that has to be manually moved around in order to get it to the desired locations. With headless content management, one headless content management system can seamless publish to an unlimited number of downstream content management systems automatically, and with no manual effort. For very large content ecosystems, this can literally be a 100-fold improvement in productivity.
• Greater consistency, quality, and reach in content distribution and publishing. Headless content ecosystems are much more reliable in terms of getting changes propagated to downstream systems and keeping them in sync accurately. This increases the overall quality of content production and distribution processes. It also makes it far likelier the right content is delivered at the right place at the right time.
• It offers a strategic system that runs more like their business. Headless content management systems are connected into content networks that look like the underlying business, whether it is publishing news in multiple languages on different sites around the world, maintaining documentation for a global company with different divisions, or maintaining a series of marketing microsites. The advantage of this is that content management flows mirror what the business does more naturally while requiring only some oversight instead of continuous effort to keep the business operating seamlssly, with its content flowing steadily as desired.

However, one obstacle to headless content management is that it does require a more sophisticated understanding of how federated content architectures work. In other words, a bit of technical skill and conceptual understanding in this area. However, even if it’s a bit of learning effort, a good working understanding of headless quickly pays off with all the attendant benefits cited above. This system runs like the business as a technical realization of what the business actually does, instead of relying on manual operation (importing and exporting content, etc.) to make it so. FInally, it's also clear that headless is here to stay, and consequently organizations must develop experience with it.

Those looking on capitalizing on the considerable power of advanced capabilities of headless content management have to take care of a couple of other things too, such as making sure all their content management systems are headless capable and producing their content in a format that can be easily federated across many different channels. For most non-trivial use cases, headless content management provides businesses with a sustainable strategic improvement to their operations.

Additional Reading

The future of enterprise content is modular and headless | ZDNet

How CXOs Can Attain Minimum Viable Digital Experience for Customers, Employees, and Partners

To Strategically Scale Digital, Enterprises Must Have a Multicloud Experience Integration Stack

 

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HOT TAKE: Adobe Acquires Even MORE Collaboration with Frame.io

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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How much collaboration does Adobe want? $2.775 billion dollars’ worth…so far. The creative and experience giant announced a definitive agreement to acquire video workflow and production collaboration solution, Frame.io in a $1.275 billion deal. Add that onto the $1.5 billion dollar deal for Workfront which was completed in December 2020…you’ve got nearly $3 billion that says collaboration IS the future. At least the future of both marketing and creative work. But…I like to think that this is core to the vision of where Adobe is heading.

Predictably, there is a video…

So now the brass tacks: The deal brings some 100 million Frame.io users more deeply into the tools many are already using like Adobe’s Premiere Pro and After Effects. Frame.io offers video editors and production stakeholders the ability to streamline everything from collaboration to approvals in a cloud-first workflow environment. Through key partnerships with industry leading hardware solutions, Frame.io offers a real-time camera to cloud secure footage upload solution that, when viewed in the totality of the Adobe video production suite, can extend from camera to cloud to completion in a fairly seamless and collaborative manner.

A great deal of Frame.io’s value proposition is wrapped in the idea of taking the pain, inefficiency and lag out of video production. As someone who has waited for hard drives to be shipped around the world (and one odd incident of tape, drives and a midnight run across the border into Mexico...don't ask) before raw footage can be reviewed let alone edited…the idea of fast, reliable and secure access to footage from camera to editing is worth its weight in gold. Then...if you start promising me that the workflows can extend all the way through the always painful gauntlet of approvals, suggestions and general frame by frame nitpicking…well…now I’m just blushing from all this excitement.

Yes. The Adobe pickup of Frame.io adds some valuable firepower to the video suite. And it hasn’t been a secret that a great deal of innovation attention has been paid to expanding and enhancing Adobe’s footprint in the world of video which extends well into 3D, AR and VR now. But as I day-dream about it...that's just the starting point.

Similar to the Workfront pickup, Adobe identified a partner that deeply understands the work of their customers. With Workfront, it was a foundational understanding of what goes into the actual WORK of marketing and engagement. I see that same vein in this Frame.io acquisition. Frame.io isn’t just “some collaboration tool” …it is a production tool developed by post-production for post-production. It isn’t a random workflow…it is purposeful and intentional. It is unapologetically for the makers, creators and do-ers. And that's pretty much become Adobe's new mantra.

What gets really interesting is when you extend the roadmap for collaboration beyond the integration of Workfront with solutions like Adobe Experience Manager and Adobe Assets, or beyond Frame.io with Premiere Pro. Imagine what happens when Adobe pulls the best of the best from BOTH Workfront AND Frame.io to reimagine what collaboration for creativity and experience really works like. THAT is the future that is worth at least $3 billion dollars in my mind.

There are plenty of competitors with collaboration and connectivity solutions. And there are oodles of solutions that address work coordination. My colleague Dion Hinchcliffe is one of THE leading experts in this space and has an exceptional ShortList outlining the leaders (hint: Workfront is already on it) in work coordination. But as a marketer, there is something I can say for certain: there is something just a bit different about the work of marketing and the work of creators. This is why tools like Workfront, Asana and Frame.io are as popular with creators as they are. Like the memes say…they just “get” us.

Only time will tell how far collaboration will connect the two sides of the Adobe coin—a coin that has had lines of demarcation segmenting Creative Cloud and Experience Cloud in a way that can feel like the gaps and fissures between marketing and creative teams themselves. If anything can bridge that gap in a meaningful way, it just might be collaboration and workflows. From camera to content consumption, once again, Adobe is just scooping up bigger chunks of territory in this shrinking land we call engagement.

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It’s Always Sunny in the State of Marketing…Until It Isn’t

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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Salesforce recently conducted a survey of over eight thousand marketers from around the globe representing all shapes and sizes of organizations. Overall, the message was pretty darn positive: Growth IS the agenda and marketing DOES play a substantial role in turning growth strategies into tangible, measurable reality.

The study—click here to download—tracks with much of what I’ve seen in the past year. Some 90% of the Salesforce study respondents agree that 2020 upped the ante with digital engagement and three-quarters of marketers now work…and collaborate…from anywhere. For CMOs, who in the face of unprecedented change managed to weather the storm, taking a break is NOT on the agenda as 70% indicate that they plan to continue to redefine success to match company goals.

It should come as no surprise that the only thing outpacing the rise of digital channels is the rise of data sources. With 78% of marketers indicating that their customer engagements are data-driven, this data surge should be expected. Even attitudes and definitions of metrics changed due to the pandemic with 78% of marketers indicating that they have changed or reprioritized their metrics in the past year, with the big shifts in prioritization of customer acquisition costs (+26%) and content engagement (+23%) while revenue growth remains the top metric being tracked.

So why the title of this blog…why lay down the hint that things might not be awesome? Don’t get me wrong, the story told through the State of Marketing report is incredibly positive and shares what I believe is a true and honest story of just how far Marketing has come, especially through the dumpster fire of a pandemic year like 2020. We deserve to have a state of marketing that is optimistic.

But a journalist didn’t once dub me the “Debbie Downer of Marketing” for no reason.

At first glance, there is nothing really that notable about the list of Marketer’s top priorities or their challenges. Similar to their top two priorities in 2020, marketers are prioritizing innovation and engaging with customers…with their top two challenges being engaging with customers and innovating. Yes…in that order…on both counts. Now, thanks to Salesforce providing access to the survey’s data via Tableau, I decided to take a dive into these findings…because if I am being honest, I got suspicious about this whole innovation is a top priority point.

What I found was that for the CMO, innovation doesn’t actually reign supreme. Instead, the priority (and the biggest challenge) is engaging with customers in real time and creative cohesive cross-channel journeys in the second priority spot. This tracks for me as CMOs are keenly aware that as customers have embraced digital channels so too have they embraced the expectation that their digital experiences should occur in the channel of their choice in their definition of real-time. It also tracks with marketing’s understanding that while they can imagine any number of journeys…it is the customer that is wholly in charge of their own experiences. And THAT, ladies and gentlemen, is what keeps the CMO up at night.

So, WHO is sweating innovation? Based on the data…marketing managers. Innovation stands at the top of the priority AND challenge chart…and what subsequently pushes innovation to the top of the overarching marketing data. This isn’t just innovation for innovation’s sake. Marketing managers are pushing boundaries and looking to innovate in order to achieve their biggest priorities and solve their greatest challenges. They are looking to solve the problem of HOW we engage in real time and HOW we orchestrate cross-channel journeys. All good, right? CMOs are looking long-term at how we craft the strategies, marketing managers are innovating to turn strategies into results.

All sunny in the state of marketing once more. So why do I keep bringing up cloudy skies? CMOs might not be setting marketing managers up for long-term success.

When asked to rate employee training teams receive, 47% of CMOs rate training as excellent…41% of marketing managers agree. Not a wide swath to be sure…but shouldn’t the recipients of the training be more enthused than the leader signing off on it? When you dig into what training is being offered, CMOs say that content marketing (47%), creativity (46%), data analytics (45%), communication (43%) and collaboration (41%) top the list. Managers shuffle the deck a bit, but for the most part agree: communication (48%), creativity (43%), content marketing (43%), collaboration (39%) and data analytics (37%).

Here’s where I get concerned…remember how marketing managers said their key priority and their top challenge was innovating…and remember how it was that innovation that could solve everyone’s big concern over real time customer engagement and cross channel journey orchestration. So why is it that campaign strategy (36%) and digital proficiency (34%) are, at best, in the middle of the pack for what marketing managers say their employers offer by way of training and support. Critical leadership skills like emotional intelligence, agility and adaptability and even resiliency rank far lower…and in an age of data dependence and digital innovation skills like data science and coding are near last.

In fact, the bottom three training opportunities listed by CMOs mirror the bottom three opportunities listed by marketing managers: data science (29%), coding (23%) and resiliency (22%).

Why are we training marketers to be successful in the year 2005 when our goals, priorities and challenges are distinctly SO 2025?

This isn’t to say that marketing skills like content marketing, creativity and communications aren’t important. We need to start upskilling based on what our teams, especially our managers and the functional teams on the ground fighting the good fight, are trying to solve…we need to train and educate so they can meet their own needs and expectations. They expect to be successful and to thrive. They WANT to innovate. So how are we helping that next generation thrive?

If there is a big ah-hah moment for me from this year’s State of Marketing report it is this: there is real cause to celebrate the resilience and fortitude of marketing, but the sun sets eventually. If we expect our digital tomorrow to be better than the dumpster fire we just survived, we need to start training teams to BE the marketers of tomorrow. Let’s start training for innovation, agility and resilience. Yes, let’s make sure content and creativity are still pumping through the veins of marketing, but let’s also remove the limitations of what a marketer can and can’t do. YES! A marketer can code. It IS possible. YES! A marketer can do more than just read a visualized data set…in fact, a marketer CAN pick up data science skills. And yes, in order to fulfill on that promise of humanizing marketing and engaging with each individual customer with empathy and contextual understanding, upskilling and uplifting marketers with emotional intelligence should be on the agenda right along with communication and collaboration.

We’ve all embraced marketing’s role as growth driver. Now, let’s get marketers ready for what comes next.

Marketing Transformation Next-Generation Customer Experience Chief Marketing Officer

In Digital Economy, You Should Fail Fast, But Must Also Recover Fast

Andy Thurai

Vice President and Principal Analyst
Constellation Research

About Andy Thurai Andy Thurai is an accomplished IT executive, strategist, advisor, enterprise architect and evangelist with more than 25 years of experience in executive, technical, and architectural leadership positions at companies such as IBM, Intel, BMC, Nortel, and Oracle. Andy has written more than 100 articles on emerging technology topics for publications such as Forbes, The New Stack, AI World, VentureBeat, DevOps.com, GigaOm and Wired. Andy’s fields of interest and expertise include AIOps, ITOps, Observability, Artificial Intelligence, Machine Learning, Cloud, Edge, and other enterprise software. His strength is selling technology to the CxO audience with a value proposition rather than the usual technology sales pitch. Find more details and samples of Andy’s work on his…...

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In digital economy, you must move fast to survive. Not in six-month release cycles. But moving with fast release cycles, continuous releases, a mature CI/CD pipeline is only a portion of the solution. If you continue to break your systems at a faster rate but are unable to fix them faster as well, you are setting up for unplanned disasters that will hurt your business sooner than later.

I recently did a podcast with my buddy Mike Kavis, Chief Cloud Architect at Deloitte discussing some of these areas of concern.

To achieve this, the DevOps culture, agile development, CI/CD pipeline, and microservices are in full swing at most digital powerhouses. I recently wrote about the digital powerhouse release cycles on how many changes they make per day. The classic microservice architecture from Netflix from a few years ago claims they have close to 800+ microservices (at that time). Netflix, Uber, and most other digital giants claim to make thousands of "daily production changes." Sometimes multiple changes to the same service. That is the power of agile development. "Fix fast and fail fast" is the mantra of successful digital houses where they can be very nimble and provide the changes the customers want, sometimes by making multiple changes to the same service. The canary, blue-green, and rolling deployments give power to the developers and DevOps teams to figure out how to get the functions and features fast to the consumers.

However, this can be a nightmare for centralized Ops teams. As I discussed in my previous article, per Gene Kim in his The Visible Ops Handbook, 80% of unplanned outages are due to ill-planned changes. Distributed systems produce a ton of noise. If anyone critical microservice or underlying infrastructure component goes down it is not uncommon for IT monitoring and observability systems to produce tens of thousands of alerts. It is very common in many digital-native companies the Ops teams get drowned in alerts and often are "alert fatigued." The noise to signal ratio is very high in these environments.

After looking at the processes are multiple large customer situations, I have to say the "fail fast" or development cycle, has matured enough, but the "find fast and fix fast" cultures of Ops teams are still not mature enough. Using yesteryears tools, processes, and skills to fight the modern war is the most dangerous thing any organization can do and yet it is very commonplace with today's IT teams. Most of them seem to band-aid something until something major breaks.

War/Incident collaboration rooms are broken

Given the virtual nature we are operating in during the pandemic, most enterprises have successfully adopted virtual incident collaboration rooms instead of physical war rooms. A good thing about the physical rooms is that you can physically see how many are in the room, and who is appropriate and figure out someone important is missing. This will help reduce the incident collaboration rooms to the right size quickly before they can deep dive into the issue.

With virtual incident collaboration rooms, everyone who is tagged with a remote association to any critical service will be automatically invited to a virtual incident room (eg. Slack channel) and everyone starts to guess what went wrong. Not only too many cooks but most of those engineers, developers, system admins who would be doing something else productive instead. Sadly, as one high-powered executive told me in confidence, they established a "Mean Time to Innocence" to reduce crowd in those situations. In other words, invite everyone you can think of, and if they can prove it is not their work that is offending then they can leave the room. 

Find what is broken and fix it fast

I have written numerous articles on this topic. You need to first figure out if what happened is really an incident. All notifications/alerts/anomalies are not necessarily incidents. An incident is defined as "Something that affects the quality of service delivered." If it is an unplanned incident, you also need to figure out if it is causing problems to any user. You also should have a mechanism to figure out how many high-profile customers are affected vs random users which need to happen before the customer knows the incident happened so you can fix it.

AI/ML systems, Observability systems, AIOps, and proper Incident Management systems, if set up properly, can help a lot in this area. Those are some of my coverage areas that I am researching here at Constellation. If you have an offering in this space, please reach out to us to brief us. I would love to find out what you do and include you in my research report.

Keep in mind in the digital economy you need to fail fast and recover fast as well. If you just keep failing without finding and fixing things faster your business will fail permanently soon enough. It is not about how hard you fall that matters, but how fast you get back up that matters more.

I am currently a research VP and Principal Analyst at Constellation Research a silicon valley research firm. My coverage areas include AI, ML, AIOps, DataOps, ModelOps, MLOps, CloudOps, Observability, etc. Contact me if you would like to brief me about your company or you need content/research work.

 

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