The Impact of Adobe's Magento Acquisition on the Commerce Market | Perficient Digital

The Impact of Adobe’s Magento Acquisition on the Commerce Market

Adobe’s acquisition of Magento is sure to send shock waves through the commerce industry.  Why?  It acknowledges and validates recent investments by many of the leading commerce platform providers toward improving their business user tooling to manage the user experience for their commerce storefronts.  Efforts have focused on enhancing the site capabilities for business users to manage digital content, personalize the user experience, segment customers, build pages, manage catalogs as well as improve business processes around B2C and B2B solutions.  Despite these improvements, the commerce platforms of today still fall short of providing marketers and content authors the robust capabilities of a content management system (CMS) such as Adobe’s Experience Manager (AEM).

Why do marketers and content authors prefer managing the shopper/buyer experience using CMS tools?  What they crave is the speed and agility that tools like AEM provide to manage the user experience.  For example:

  • To use a single tool to manage both the brand and the commerce experience
  • To quickly update, share and manage digital assets across the enterprise
  • To deploy new content and experiences several times a day, if needed, without IT constraints
  • To build a blended brand and shopping experience and remove the historical separation buyers have been forced to navigate
  • To infuse commerce capabilities across the enterprise with the ability to market and merchandise product and service offerings to make every moment shoppable
  • To manage their digital content and site experiences in teams with secure approval and publication workflows

Commerce platforms boast many strengths but inherently are focused on conversion and transactions.  As a result, they lack many of the ‘experiential’ CMS capabilities relative business users love.  Conversely, AEM and other CMS solutions,  are skewed toward delivering an engaging experience and lack the alignment with commerce platforms for building compelling commerce experiences.  To build a blended brand and commerce user experience required building an integration between a CMS and a commerce solution.

Adobe’s Need for a Commerce Solution

Despite its leadership in putting the power of building insightful and personalized brand experiences in business users’ hands, Adobe still lacked the ability to integrate effectively with commerce systems.  The gap persisted around ‘owning the glass’ end to end and driving these experiences across channels and all customer interactions.  Adobe’s previous release of their Commerce Integration Framework (CIF) lacked the architectural approach and functionality for many commerce customers to integrate AEM effectively, particularly for B2B.

The good news is the CIF has been completely rewritten and due to release in the third quarter of 2018. They completely changed their approach to integration and now can effectively integrate with any commerce platform and support more complex commerce scenarios.  To learn more about the new framework, refer to the blog Understanding Adobe’s New Commerce Integration Framework for a deeper understanding.

Although this provides a first step in achieving a common tool for managing the user experience for content and commerce, it still requires work.  The framework provides the capability but the actual implementation will require both AEM and commerce development to customize the solution.

Why will the purchase of Magento change that?  Read on.

Filling the Commerce Gap

A key goal in Adobe’s commerce strategy is to build around the customer experience and transform how buyers and consumers interact with the brand.  Errol Denger, Adobe’s Director of Commerce Strategy, provided these insights into Adobe’s goals.

“Understanding the complex journeys that customers face goes far beyond transactional commerce.  We provide the tools for marketers to define who the shopper/buyer is, where they are on the buying journey, providing the right content at the right time to help customers solve problems (b2b) or to inspire the shopper (b2c) to help drive the buying decision and increase conversion.”

Adding Magento is a huge leap forward in achieving the goal of giving business users the power to manage the brand and buyer experience with the same set of tools. This will require some planning and execution to get there but Adobe has chosen a solid commerce solution to make the start. While the acquisition just officially closed, over time we will recognize Adobe eventually having a ‘native’ commerce offering integrated into their marketing suite. As Adobe builds the solution, the lines between commerce and brand experiences will continue to blur and will eventually become unnoticeable if you take advantage of using Magento as the commerce engine.

Assimilation of Magento into the Adobe Family

Keep in mind that acquisitions do not change a software vendor’s ability to meet the needs of the market.  There are countless examples of acquisitions by software vendors that resulted in little more than a rebranding of a software product along with minor investment in integrating with other offerings in the vendor’s portfolio.  There is a major difference between integration and assimilation.

Adobe has a solid reputation for investing in the R&D to assimilate acquired products into their portfolio.  As their portfolio has moved to the cloud, seamless integration has become even more important and Adobe has delivered.  Adobe has done an amazing job assimilating acquisitions such as Omniture (Adobe Analytics), Day Software (Experience Manager), Demdex (AudienceManager), Efficient Frontier (Media Optimizer) and Neolane (Campaign) as well as other products.

Expect the same approach to Magento.  The roadmap of how quickly Adobe will assimilate Magento into their offering will take time and planning but it is a key part of their strategy.  They need to consider the needs of legacy Magento customers in this strategy as some customers may opt to only use the Magento commerce capabilities to manage their user experience.  Again, having a native commerce offering as an ‘option’ in Adobe’s marketing suite is powerful.

Potential Impacts to the Commerce Market

Expect some initial growing pains as Adobe brings Magento into the fold.  If history is a measure of how this will play out, expect Magento to become another Adobe offering blended seamlessly into the portfolio.  Why this will become so compelling is that having a commerce suite native to the rest of the marketing suite gives Adobe a full suite of market-leading marketing tools to manage the brand and commerce experience end to end.  Consider having integrated marketing tools across the commerce and brand experience that provide the following:

  • Insights into who your customers are with advanced analytics to understand customer journeys, measure ROI and optimize the experience
  • Ability to set up, test and deliver targeted experiences based on user behavior, customer segmentation and profile data across all touch points
  • Tools to manage digital content for both commerce and brand, share content across the enterprise and advanced workflows to review, approve and deploy content to all sites
  • Tools to manage connected experiences across mobile, web and social communities
  • Ability to access commerce business functions (e.g. inventory availability, lead time, store location, price, promotions, etc.) to personalize the experience across all channels

Customers evaluating commerce platforms will face a number of decisions.  To compete in today’s marketplace requires building experiences that differentiate customers from their competition.  Adobe provides the marketing suite to build these experiences and with Magento integrated into the platform in the future, they will be a formidable foe for commerce vendors in the future.

Most of the current enterprise and mid-market commerce platforms lack the deep capabilities a CMS-driven commerce experience brings to the table.  Most commerce vendors will integrate with a CMS to provide this capability which adds complexity and cost to any implementation.  Additionally, having the rest of the Adobe marketing suite integrated adds significant value to the business proposition.  Commerce vendors such as IBM Commerce, SAP/Hybris, Oracle Commerce and Salesforce Commerce Cloud who have seasoned platforms lack the integrated CMS and marketing capabilities Adobe will bring to market after Magento becomes part of the Adobe Cloud.

A few vendors offer an integrated CMS as a part of their commerce solution.  Although this is compelling, they typically lack the deep B2C and B2B capabilities Magento brings to the table.

The depth of capabilities in both the marketing and commerce space will be hard to match if Adobe stays true to their reputation of assimilating Magento into their family.  There are still many unanswered questions but, make no mistake, this will have a major impact on the commerce vendor market moving forward.

In my next blog entry, we’ll discuss headless commerce using Adobe’s new Commerce Integration Framework and some early feedback on our participation in the beta program.

 

To learn more about the Adobe Magento acquisition, and how we can help, click here.

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