Aug 16, 2019 - Justin Emond

3 Trends that are Shaping Which DXPs Will Win

Choosing a Content Management System is a tactical choice. Choosing a Digital Experience Platform is a strategic choice.

A CMS is a single unit that can be swapped out if something better comes along—especially since it’s on the backend. But a DXP is a fully-encompassing platform where technologies are meant to play well with each other. To make that happen, that requires foresight and planning.

There are three sweeping trends that will determine which DXPs will perform best in the market:

  • A modern marketing approach that favors the nimble and is currently disrupting marketing processes across corporate America.
  • Major changes in the digital commerce players which dramatically shift budgets from IT to Marketing (can be upward of half to commerce development budget).
  • The first major architectural change to content management in nearly fifteen years.

Understand these trends—embrace these trends—and you’ll be better prepared to thrive in a digital landscape that evolves year in and year out.

Trend 1: Agile Marketing

Do you remember when all web projects used waterfall? I sure do, I even wrote a book about it.

The Manifesto for Agile Software Development was released in 2001 and the results in software development have been explosive. Fast forward a little more than fifteen years and Agile is now the most common digital project management approach used in American business with nearly a 70% market share.

Enter Agile Marketing. Agile Marketing borrows the parts of agile software development that work in a marketing context in order to increase these two aspects of an organization's marketing spend: Velocity and Adaptability.

This is a shift from big budgets, big timelines, and big risks to small budgets, small timelines, small strategies, and lots and lots of measurement and iteration. In “The Agile Marketer”, Roland Smart argues that there are four reasons this shift to adaptive marketing is taking place:

  • The need for speed over size
  • The rise of open-source and distributed development
  • The availability of low-cost development resources
  • The distribution of computing power at the edge of the network (the Internet of Things)

These realities should be familiar to any modern, digital marketer. Agile marketing provides the answer to any marketing leader whose CEO says in a meeting: “If we have data, we’re going with that. If all we have are opinions, we’re going with mine.” This is only a cursory overview of agile marketing. If you want a more complete understanding, check out Roland Smart’s excellent book The Agile Marketer. It’s terrific.

What does agile marketing look like in practice? 

Agile marketing rewards swift organizations with terrific returns. Take for example the ACLU.

When President Trump unexpectedly issued the immigration ban shortly after taking office, the ACLU digital marketing team was able to rapidly change the entire home page of the site to a simple appeal to ask for donations to fight this move. The result? The ACLU raised money in 48 hours what normally takes them six years to solicit.

How does agile marketing affect the DXP ecosystem?

Widespread adoption of agile marketing is only one to two years away, so you must ensure your digital experience platform is designed around this concept. If it’s not, you are going to have one unhappy marketing team in twenty-four months.

The crucial requirement for DXP to make agile marketing possible is high developer velocity. In order to continuously perform small experiments in a timely manner, you must have a platform where it is easy for developers to innovate and push changes to production. You must have a platform built on modern front end best practices that are built for speed. Without this, you will never achieve the level of throughput to gather the results and data that makes agile marketing possible.

How do you know if you platform has high developer velocity? This is best obtained by getting the sentiment of your marketing team. Ask them a simple question: Do you feel that engineering should be able to get more done in the time it's using now? Do you feel empowered or encumbered? If the velocity of the marketing team is mismatched with the engineering team, you have a serious developer velocity problem.

Trend 2: Rise of Cloud Commerce Platforms

We entered (what we call) the third wave of commerce platforms in 2018. This third wave is all about the current evolution of dominant commerce platforms which are cloud and headless platforms (like Shopify Plus or BigCommerce). Here’s why they have risen and will continue to explode.

  • Platform business model, used by companies like Uber and AirBNB, where the different types of customers (drivers and riders, landlords and tenants, etc) create a feedback loop where growth with one group causes the other group to grow which then circles back and feeds more growth. With their extensive app ecosystems, cloud platforms like Shopify Plus continuously offer greater value to merchants. 
  • Maturity. Cloud platforms have grown sophisticated enough to handle enterprise use cases, growing beyond small and medium businesses.
  • Value of developer velocity. Commerce brands are realizing that developer velocity is directly related to the bottom line. As more and more brands compete online for customers, the winners are often not just those that can move the best, but those that are smart AND can move the fastest. 

The most important consideration for your commerce platform

Though there are many, the most crucial consideration is understanding if your experience is traditional browse and buy or not. 

A browse and buy commerce experience is just that: visitors browse your site, look at various product detail pages, use search, visit collection pages, and add a number of items to a cart, maybe use a promotion code, complete a checkout to gather information like a shipping address. Jcrew.com and Amazon.com are browse and buy experiences. TicketMaster.com and your local utility are not.

If your experience is traditional browse and buy, you likely need to look at cloud leaders, Shopify Plus and BigCommerce, and not custom code control solutions like Magento 2. The cloud options will be just as flexible where it matters as Magento, but offer serious cost savings by dramatically lower hosting costs, infinite scalability for free, and fully managing the backend.

You can read our guide to picking the right commerce approach and platform for more information.

How does the rise of third wave commerce platforms affect the DXP ecosystem?

When compared to traditional platforms like Magento and Hybris, third wave commerce platforms offer incredible developer velocity. Doing more with less is the essential competitive advantage of the digital commerce dogfight merchants fight every day.

As an example, let’s compare Magento and Shopify Plus. A typical Magento project budget for Third and Grove is $150-250k. For Shopify Plus, it’s $75-150k. That can be a $100k difference which translates to a much shorter (faster) project. This is almost a third less for the build, and you should continue to enjoy 25-50% savings over time as you make ongoing site refinements. Why? As a cloud platform, Shopify Plus manages both the infrastructure and at least half of the backend code. With Magento, you have to manage the entire backend code and that takes time and attention away from more valuable engineering efforts.

A simple platform selection can have enormous consequences for developer velocity over the entire life of a commerce platform. Commerce is becoming increasingly common in the digital experiences of businesses of all sizes in the US. That is why it is crucial to thoroughly understand the titanic changes happening in commerce platforms to ensure the commerce component of your DXP is disruption ready.

Trend 3: Decoupled (read: headless) Content Management Systems

The vast majority of CMSs do two things: 

  1. Provide the front end experience site visitors see
  2. Provide the backend editorial experiences that your marketing team uses

This makes them monolithic CMS platforms, where the front-end and back-end technologies are heavily coupled together. The major drawback to this approach is that using this architecture makes it difficult to achieve a microservices architecture.

A microservices approach to content management

A microservices architecture is an approach already popular in IT departments, driven largely by the maturation of Amazon Web Services, where individual technology needs are provided by powerful, but discrete services bundled together into a compelling platform. This approach lets you leverage best of breed tools and is made possible by modern, standard APIs. This is not the integration tire fire your project from 2008 became.

Enter decoupled CMS. In this approach, you use a traditional CMS interface platform for the backend and you are then free to use modern experiential technologies on the front-end, like React or Angular.

The leading headless CMS backend providers are Contentful and Contentstack (both cloud options) and Drupal, which is open source and thus code you host (or run on the Acquia Cloud).

Decoupled is not for every use case. There are five situations when a decoupled approach is likely going to be successful:

  1. Want to be bleeding edge
  2. You have content multichannel needs
  3. A speedy user experience is a top priority
  4. You want to move away from siloed and fragmented content management platforms and workflows across disparate business units
  5. You want to increase developer velocity

How does a decoupled approach affect the DXP ecosystem?

It is early days in the transition to decoupled content management platforms BUT adoption rates are increasing and the long term prospects are very strong (just look at how much React and Gatsby have grown over the last few years). The bottom line is that to be future-ready, DXPs must provide support for decoupled use cases today.

Remember, it’s not about if you need decoupled today—it’s about realizing that decoupled might not be as far off as you think. If you don’t take the time to thoughtfully evaluate whether headless is needed in your roadmap, you could easily find yourself needing to implement this approach in twelve months from now but being on a platform that makes it very difficult to innovate in this direction.

What These Trends Tell Us: Open DXP has it all.

Let’s recap what these trends tell us. A responsible, forward-looking DXP will have:

  1. High developer velocity to support Agile marketing teams.
  2. Seamless integration with cloud commerce platforms that are booming and continually disrupting the commerce industry.
  3. Microservices approach to put together a best-of-breed solution from a decoupled use case to other martech tools that fit exactly what you need.

And there’s only one type of DXP that can satisfy all three requirements: Open DXP. The future is unknowable but there is one thing that we do know: that it’s unknowable. Open DXPs embrace that uncertainty by laying a strong foundation that you can build upon as you need new technologies to build memorable experiences and more sophisticated tools to understand your customers.

A poor choice today has compounding interest (just not the type that you want). Pick the right platform that grows with you and you’ll stay focused on building a customer-focused experience for years to come.
 

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