Each year, Gartner prepares a report describing the market position of digital commerce platforms. The most recent report was released in August of 2022. This year's report evaluates 18 vendors of eCommerce platforms to help companies make informed decisions.
Gartner and the report
Gartner is an analytical and research company founded in 1979 in the U.S. that specializes in issues related to the strategic use of technology and technology management. Gartner currently operates in over 100 countries and employs over 16,000 employees. The company is listed on the New York Stock Exchange. They’re headquartered in Stamford, Connecticut, in the U.S.
Their main activity is to provide the knowledge needed to make decisions about information technology through a subscription program. That includes access to analysts and reports published by Gartner.
In the field of technology administration, the company deals with issues like, among others, application development for enterprise resource planning (ERP) and customer relationship management (CRM). They also deal with corporate portals, content creation, business intelligence, information management, and IT infrastructure and operations.
What are digital commerce platforms?
Gartner focuses on platforms that allow companies to make digital transformations and provide their customers with outstanding shopping experiences. According to Gartner, digital commerce platforms are a technology that:
- Will enable you to make purchases yourself.
- Must provide an API.
- Must contain a self-service shopping environment in the form of a storefront.
- Must have product listings, a product detail page (PDP), a shopping cart, a checkout process, and “My account” functionality.
Inclusion criteria for vendors
To be eligible for the Magic Quadrant, each vendor had to meet the following inclusion criteria as defined by Gartner on March 31, 2022:
- The vendor must have offered at least one digital trading platform for sale.
- The digital commerce platform had to serve more than 60 manufacturers from more than one unique industry.
- The digital commerce platform had to be used by paying customers in more than one region.
- A couple of others.
Magic Quadrant’s design
The Magic Quadrant has two scales: the Ability to Execute and the Completeness of Vision. I want to explain what influenced the evaluation of the vendors.
Ability to Execute
Gartner took into account the following factors in assessing the Ability to Execute:
Completeness of Vision
The Completeness of Vision evaluation included:
Challengers tend to provide less functionality than Leaders. They focus on a smaller number of markets, geographies, industries, and technologies. They’re very respected, and they invest a lot in innovation. They have R&D resources and use them to gain profits and improve their reputation.
Leaders are characterized by the broad functionality in the B2B and B2C markets. They provide eCommerce opportunities across multiple models and markets. These platforms can scale up. By using them, you can use partner applications, external services, and integrations. You can work with suppliers who can integrate with these platforms, and you can innovate.
Leaders are also profitable. They have extensive technical and organizational resources.
As you can guess by the name, they’re in a narrow band of the market where they can be trendy. Shopware on the DACH market, even though this vendor is not popular all over the world, is a good example. Often, these vendors don’t provide scale, don’t scale themselves, have fewer technology partners, and focus to varying degrees on B2B and B2C.
They innovate powerfully and effectively, disrupting well-established commercial markets. They incorporate new architecture and technologies into their platforms, and use unpopular pricing strategies. Visionaries usually offer modern solutions but lack the resources compared to bigger competition. They have smaller affiliate networks but are growing fast.
“Magic Quadrant for Digital Commerce” as of August 2022
“The digital commerce platform market’s revenue grew by 22% in 2021. This Magic Quadrant evaluates 18 vendors of digital commerce platforms to help application leaders make informed decisions.”
Gartner “Magic Quadrant for Digital Commerce” report, August 2022
In the graphic below, you can see the “Magic Quadrant for Digital Commerce” which is the main feature of the Gartner report.
Figure 1: “Magic Quadrant for Digital Commerce”
Pros and cons of some of the presented vendors
At Divante, we develop eCommerce platforms based on three out of the 18 vendors qualified for the report from August 2022. I’m focusing on them in describing the results of Gartner’s analysis.
Adobe is a Leader with its Adobe Commerce platform. It’s crucial for Divante because we’ve worked with this platform the most among all eCommerce systems. Remember that we’re talking about Magento. The enterprise version was renamed Adobe Commerce. The open source version’s name hasn’t changed.
Adobe Commerce can also be deployed with Adobe Experience Manager (AEM). It includes Adobe content and digital asset management (DAM) solutions. The Adobe Commerce platform can be hosted on-premises, in public clouds, or using Adobe services.
Companies from a wide range of industries choose this platform, including manufacturing, retail, and healthcare. Most Adobe customers have online sales of less than $50 million in annual gross merchandise value (GMV). Larger customers also use its platform.
- Many features for B2B, B2C, and B2B2C. These features include the possibilities for segmentation, personalization, loyalty and rewards programs, and recommendations, along with Page Builder, a content management tool that works with PWA Studio.
- Artificial Intelligence (AI) allows you to monitor customer experience (CX) and activity.
- Cross-channel personalization includes personalized promotions, emails, and dynamic product recommendations.
- Updates could be a plus because it takes the burden of security updates off users. However, changing the version of the software is quite a tedious and lengthy process.
- B2B functionalities have many functions missing. At Divante, we often make proprietary solutions for B2B and use ready-made third-party modules.
commercetools is also a Leader in the report. To understand what commercetools is and who it’s for, it’s important to note one fact. It’s a leading influencer of the composable retail space thanks to the principles of MACH architecture based on SaaS. MACH architecture is microservices, API-first, cloud-native, and headless. This means that its storefront can be built in any solution, delivered by any entity, and hosted anywhere in the cloud.
commercetools has a consistently strong presence in Europe, and its presence in North America continues to grow. It’s aimed at large global companies with a large proportion of its customers with over $250 million in annual GMV. Users of commercetools come from many different industries, but most of the newly acquired clients are from the retail sector.
- Extensibility to promote the MACH principles: Looking at it another way, these principles affect the entire market, so commercetools will often be a natural choice that fits the architecture of digital solutions for prominent participants in the market. It favors building large ecosystems built of components selected with flexibility in mind from different vendors.
- Free trials: You don't have to decide to pay for the platform immediately. You can run commercetools internally for free testing and adjustments.
- commercetools front end: This is an independent storefront creator and page builder that allows for previewing changes in real-time using a QR code on various devices. It can be combined with other headless systems, such as content management system (CMS).
- Limited built-in B2B functionalities: There’s no comparison with Adobe here.
- Personalization and analytics: There are a few possibilities in this field, but you can integrate with third-party solutions.
- Technological complexity: Gartner customers report that commercetools is expensive, complex to implement, and most often suitable for enterprises with extensive technically experienced sales teams.
Shopware (Niche Player)
Shopware is a Niche Player in the report. Shopware 6 is based on the PHP Symfony framework. The pricing model is based on licenses for on-premises and commercial cloud deployments, such as SaaS or PaaS. There is also an open-source community version.
Shopware operates mainly in Europe, the Middle East, and Africa (EMEA) regions, focusing on the Germany, Austria, Switzerland (DACH) countries. It’s also developing in Asia and the Pacific region. Shopware's target segments are small and medium-sized retail and B2C brand manufacturers and B2B wholesalers.
- Flow builder: Customizing ready-made functions such as segmentation, promotions, personalization, loyalty programs, and B2B workflows can be created and edited in the visual editor without interfering with the source code.
- Multisite: The ability to run multiple shop windows.
- Many sales channels: You can quickly launch new sales channels using ready-made integrations with external, popular services such as Google Shopping and Facebook Ads.
- Shopware PWA: I honestly have to admit that Gartner has indicated Shopware’s progressive web app (PWA) as a caution because it’s only built on Vue.js with no possibility of choosing other JS frameworks. Other digital commerce providers also provide options in other commonly used front-end frameworks, like Angular and React. However, Vue.js has become increasingly popular over the years and is in the top three of the most popular front-end frameworks.
- Narrow geographic scope: Most of Shopware's employees, customers, and partners are based in the DACH region. However, the Shopware community is becoming more and more active in Poland.
- Only a mid-market focus: Most of Shopware's customers are B2C businesses with less than $ 50 million in annual GMV. Large eCommerce businesses account for a minority of Shopware users.
How does it compare to our experiences at Divante?
The latest Magic Quadrant and related report confirm that we’re on the right track. Just three years ago, the dominant eCommerce technology at Divante was Magento. However, we decided to diversify. Currently, we’re against too much specialization because eCommerce requires different approaches. That’s why we started to analyze new solutions on the market and implement them for our clients. Our global analysis and experience coincide with Gartner's assessment. In fact, the positions and the level of adoption of these solutions locally may change.
We implement solutions of two of the four Leaders indicated by Gartner and one Niche Player. The last of them, Shopware, in our opinion, would have been classified differently by Gartner if the report concerned only the DACH or EMEA market. We will continue this strategy in the coming years.
Published October 18, 2022