On the first of June, 2016, Salesforce announced that it will acquire Demandware for $2.8 billion and completed the acquisition on 11th of July.
CEO of Demandware, Tom Ebling, said:
“Demandware and Salesforce share the same passionate focus on customer success. Becoming part of Salesforce will accelerate our vision to empower the world’s leading brands with the most innovative digital commerce solutions that enable them to connect 1:1 with customers across any channel.”
This acquisition may prove to be Salesforce’s dramatic entry into the arena of retail. Before the acquisition, the number one Customer Relationship Management (CRM) provider lacked the capability to transact with customers. However, now they are able to do that, and more.
Head to Head with Online Retail
Online retail is all the rage these days, and the market is growing steadily, with more and more stores opening online. There are many opportunities that online retail services offer that the regular brick-and-mortar stores lack, which is why many are offering online option for their customers, as well.
Marc Benioff, Salesforce Chairman and CEO, commented on the press release,
“Our customers are trying to connect with their customers in a whole new way.”
This says a lot about where Salesforce can go next. Omnichannel, the bridge between online retail and offline retail, is the integration of the best of both the options, and this is what Salesforce now has access to. The company is now in a position to offer solutions to offline retail, without getting rid of them. Offline retail does have a powerful advantage that the online retail stores cannot offer: connecting with the customer on a more personal level. Not being able to touch, feel, or try out a product first comes only second in the least favorite parts of online shopping, according to a survey. Salesforce can tap into this huge resource and come up with solutions that can provide customers with a variety of options and flexibility in shopping.
Tmall.com, a small company, succeeded in bridging the gap between online and brick-and-mortar stores. James Hardy, head of Europe, Alibaba.com, said that “for this year’s Singles Day in China, Tmall extended its promotional activity to 30,000 bricks and mortar stores, encouraging people to visit the stores in the run up to November 11 to try out goods. They could then scan product QR codes with their mobile phones to add goods to their virtual shopping cart and automatically receive the appropriate discount.” In this example, the customers of the company had the opportunity to experience a combination of mobile, physical and digital mediums in their shopping.
Salesforce has had a great experience with huge retail brands in the past, like Burberry Toyota and Louis Vuitton. There is no doubt that with the resources of Demandware, Salesforce could become the next major retail solution. As we have mentioned in the example above, combining online and offline retail to provide a better solution is not a new concept. There are many vendors for it out there.
But, as Brean Capital’s Yun Kim puts it:
“Salesforce brings the overall holistic view around servicing the customer by providing not only the ability to transact but also tying that with marketing and customer service as well. There’s no other vendor out there.”
Contributed by Santosh Prasad