The world’s major corporations are increasingly relying on Spryker’s solutions to implement innovative business models. For example, the company is working with the US offshoot of Aldi to implement a new online grocery shopping experience – including delivery and curbside pickup.
GFM Nachrichten, in collaboration with the E-Commerce Berlin Expo (EBE), spoke with Spryker CEO Alexander Graf about the reason for its continued success and his view of the current market situation.
Can you briefly describe for our readers what Spryker does exactly?
We help companies to increasingly digitize their commerce flows – to reach customers online, to serve customers online, to link the whole multichannel/omnichannel issue. And that’s where brands have to decide from our perspective: Do they believe that the online experience is a differentiator or is that not relevant for the brand or the B2B company. We believe that it’s very important for most companies to be able to differentiate themselves online, because it’s about how people buy from a brand or a B2B company. Companies therefore need much more freedom in their choice of features and the speed at which they roll out new features. Of course, if you want to stand out in the market, you need software that allows you to do that. And in the e-commerce sector, we are currently the only ones to offer the necessary modular principle – in other words, a composable platform. Gartner put us at the top of the capability guide in the last Magic Quadrant.
We believe this is by far the fastest-growing segment. It is growing above all in the B2B environment, but also in business models that are very complex in themselves, because in some cases regionally different products, different prices, and different delivery and availability conditions have to be orchestrated. Of course, this cannot be accomplished in a platform that is built to connect a warehouse and have only one to ten products in the shopping cart at checkout. That’s why companies today have to make a decision: Do they want to be competitive online, i.e. do they want to perform as well or better than the other leading companies on the market? Or are they just a market competitor online, simply swimming along. Then, of course, Shopify will do. We are completely at the other end of the spectrum, serving the enterprise sector exclusively.
What about costs?
Pricing-wise, the most relevant factor is whether you can maintain your own tech team with your business model and whether it’s worth it at all. If I have to pay three/four people in an agency or have them on my payroll, six-figure sums come together relatively quickly. That’s nothing for a company that makes maybe 5 or 10 million euros in total revenue. For our customers, it starts at 500 million to 1 billion euros. These companies need a different service, where the support, the delivery in different countries and the contracts are very individually designed. Only enterprise platforms can guarantee this.
What advice do you have for companies that are not yet so well positioned?
Tip number 1 is, of course, speed. Complexity in the digital world cannot be dealt with by asking all stakeholders, then painting a huge decision tree, and then taking two years to take the first step. Today, good managers are able to break down complex decisions into small sub-problems and thus produce results more quickly. In the e-commerce environment, this means that you don’t necessarily have to start by tearing down the entire platform and redoing everything in order to be fit for the future. It’s better to consider where there is a part of your own organization that is already up for it today, that has the necessary knowledge and is staffed with people who are willing to roll up their sleeves and work on changes. We always call this the coalition of the willing. Doing this faster is actually a competitive differentiator. It makes it cheaper, it gives you data format faster (?), and it probably means you overtake your direct competitor.
It is also extremely helpful not to take Amazon as an example, precisely because many discussions in recent years have always been very Amazon-centric. It doesn’t make sense to say: If Amazon does this and that, then we’re screwed. There are so many great new niches that Amazon can’t even serve properly on its platform. Grocery is just one example where Amazon has completely failed in Europe. Who buys their groceries from Amazon anyway? There are also many other categories such as audio technology or vehicles. There is a lot of sales that still go online, where other platforms outside of Amazon are in demand. That’s where it’s important now to tap into that potential and not somehow wait for someone else to do it.
In a Sana Commerce study, it came out that the management level rarely consults the IT level before running off and doing anything, which of course creates cost explosions. How would you assess that?
We don’t see it as someone just running off, a decision on a platform relaunch can take six months to a year. It’s often driven by the business, that’s true. However, to return to the Sana study, the IT department also used to make decisions without asking the business. So it seems to be a kind of ripple effect. When the business says that everything is going too slowly, it’s important for IT to know that no decision now has to be made in a cost center. In the enterprise commerce corner, business is now definitely the decisive factor – but no one makes decisions without IT.
In your opinion, what will be important for brands and large retailers in 2023, i.e. what should they definitely not lose sight of?
The topics that have been mentioned again and again over the past ten years, i.e. mobile first and above all personalization, are still enormously relevant. I have to put myself in the shoes of every single customer, so to speak, and think: Why is he buying my solution and how can I make it better for him than other solutions? But it’s absolutely about the speed of implementation. You no longer have the time to wait for digitization, because other platforms might then take away customer access. That’s why you have to anchor the issue of time as the top priority in your management – and not wait for the perfect solution to be found or hire ten more consulting companies. That would be my most important tip: Management must ensure that more things happen at the same time and faster, rather than looking to ensure that only the right things happen.
In our world, no one can see into the future any more anyway: No one knows how tomorrow’s customers will decide, why they will decide that way, and what the drivers are. The new skill, therefore, is to simply be adaptable faster than the competition. If companies take that into account, they can forget about everything else for now. This is the only real success factor when you look at digital business models or projects that are more successful than others. This doesn’t happen because it was the better idea, because more money was invested, or because they had better strategic access to customers, inventory, or the like, but because they were able to adapt faster. This should become the main benchmark for decisions in 2023.
Visit E-commerce Berlin Expo!
Would you like to learn more about payment methods, marketplaces and store systems? Then make a note of February 23, 2023 – on this date, numerous exhibitors and speakers are waiting for visitors to the E-Commerce Berlin Expo (EBE) in Berlin.