How merchants choose technology vendors
Digital commerce is going through an era of transformation as technology advances innovation across the landscape. From enhancing operational efficiency to reshaping the shopping experience, retailers rely on technology vendors to access best-in-breed solutions.
The problem is that there is often a disconnect between retailers and tech vendors. Businesses don’t always end up with the right technology; vendors often fail to position their solutions effectively, missing out on building strategic partnerships.
The decision-making process of how merchants choose technology vendors can be cloudy. Having a deeper understanding of merchant challenges and expectations can be a game-changer for vendors – helping to better position themselves and secure strategic partnerships.
Fuse helps technology companies reach more merchants and connect them to the wider world of commerce. As the specialist integration division of Tryzens, we have access to merchant insights from the Customer Success Team. We are going to use this to clear away the clouds and bring clarity to how merchants choose technology vendors.
Let’s tackle three key areas: the catalyst for technological change, the considerations that merchants take in choosing the technology, and the differences in their buying behaviour.
What prompts merchants to look for new technology?
A merchant’s technology stack needs to adapt as the digital commerce landscape changes. This requires a continual review of systems, platforms, and processes and identify areas of optimisation on a merchant’s digital roadmap.
Implementing new tech may be born out of a clear necessity (such as pivoting towards ecommerce capabilities during the pandemic) or thorough analysis (such as identifying painpoints in the checkout experience and recommending different payment service providers).
Here are some catalysts for adopting new technologies:
Businesses traveling along a strong growth trajectory may reach a point where their needs surpass their current technology. To a point where their platforms impede growth. A common challenge we see among merchants is that an increase in multichannel orders leads to discussions of implementing an order management system (OMS). Another is when a growing catalogue calls for a product information management (PIM) platform to better organise assets and content.
When businesses evolve, they tend to start building out tech stacks based on an immediate requirement. As times go by, and licences come up for renewal, merchants will begin looking to strategically align technologies being used by their team. Does it make sense to make changes and updates in 3 or 4 different places? Wouldn’t you rather consolidate multiple services under one cover-all provider? This frees up so much valuable time for teams to dedicate to what they do best – instead of losing time weaving in and out of multiple log-in screens.
Not all decisions for new tech are driven by outgrowing current set-ups. Often, they come from broader business goals. Ideas pitched in budget meetings by department heads at the start of each year quickly snowball into RFPs. For example, merchants may pivot towards retaining active customers by building an omnichannel loyalty scheme. Or driving new sales through a more complex customer relationship management (CRM) platform. Or focusing on average order values by expanding credit options to make big purchases more accessible.
Interestingly, there are times when we find that merchants have the right technology in place, but there’s an upskilling issue that’s holding teams back. These scenarios appear when the people involved in the implementation of new technologies leave the company without transferring knowledge of these new systems. This leaves a knowledge gap.
Technology vendors can bridge this gap by widening their pool of contacts at existing customers. This helps to maintain platform knowledge inside retailers regardless of whether key individuals leave. Vendors can also ensure that all new team members are given access to full onboarding and ongoing training of their technology. The key is continuous engagement and communication with merchants.
This is particularly important today as a lot of technology implementations were carried out during the pandemic. Much has changed over the last couple of years. New employees enter the company while others leave. This has shifted team structures and dynamics and left plenty of gaps in knowledge when it comes to current technology stacks.
What are the key considerations for implementing new tech?
When merchants decide to implement new technology, several key considerations come into play that shape the decision-making process. These include:
- Cost and time of implementation
The cost and time of implementing new technologies are critical factors that merchants take into account. They need to find the right balance between investment and return, making sure that the technology not only aligns with their strategic vision but also fits within budget and time constraints.
This is where integrations, plugins, and apps play a crucial role in implementing new technology. Because they are designed to be seamlessly installed and deployed, they tend to minimise the time and costs pressures normally associated with an implementation. Merchants with more complex infrastructures will typically go through longer processes – product discussions, IT engagement, functionality considerations. Pre-built integrations allow them to plug in and play with much lower risks in terms of investment, resources, and time.
Merchants are also going to look at the documentation of integrations, plugins, and apps to assess how easy they are to use and understand. If its complexity stretches beyond the capabilities of a merchant, it’s going to consider the tech’s level of support.
- Level of tech support
Tech support is crucial for facilitating smooth and successful implementations as well as ongoing assistance and maintenance. Without it, merchants can quickly get stuck in the mud of implementation processes or knocked off course by maintenance issues.
Vendors need to make sure that they are clear on who their go-to teams are for supporting merchants once they are live with a new technology, with clear processes in place to resolve any issues that appear. By maintaining open communication from the beginning, merchants can feel the full benefits of a vendor’s expertise, ongoing updates, and dedicated customer support.
- Proof of success
Merchants do their homework. They carry out research of the technology landscape and seek out recommendations from peers who have experience with the specific technology. They also value the recommendations of their strategic digital commerce partners.
This highlights the need for vendors to showcase their success stories – whether it be on their website or industry events. They should provide detailed case studies and clearly communicate their capabilities, using real examples of how their technology is benefiting customers and how they deliver dedicated customer support.
What are the differences in the buying behaviour of merchants?
Merchants find themselves among a vast land of technological choices. Each of them is on a separate journey to find the right solution based on a number of variables – size and complexity of the business, the budget available, the area of the business under consideration, and so on.
Let’s dive into some of these differences by looking at two types of companies looking to implement new technology: a small and medium-sized business on Shopify and an enterprise powered by Salesforce Commerce Cloud.
In terms of out-of-the-box capabilities, the SMB will rarely act on third-party options that don’t include an app baked into the digital commerce platform. This is because payment gateways and enablement of options can be complex and time-consuming – something that enterprise platform users face in order to maximise their capabilities across complex platforms.
Shopify has created a model that makes their baked-in Shopify Payments gateway attractive for SMB customers on a budget. Out-of-the-box express payment options, no set-up requirements for the gateway itself, and a transparent fee structure all make it a significantly more appealing option than a complex third-party integration. That’s why an estimated 85% of Shopify Plus sites are powered by Shopify Payments.
On the enterprise side, businesses look to align their in-store and online payment providers. Yet enterprise-level platforms don’t offer native gateway solutions. This makes integrations (or in the case of Salesforce, cartridges) indispensable for seamless operations and functionality.
With larger technology budgets, the decision-making process of enterprises is often based on the usability and challenges that one single tool can tackle at once, rather than the cost of implementation or licensing. The overall ROI that saving time and reaching wider audiences grants them will outweigh any savings from using a native tool. That may mean an enterprise powering its ecommerce on Salesforce Commerce Cloud while hosting its CMS on Contentful.
For businesses with smaller budgets on Shopify, they tend to base their decisions on the available options in the app store and their associated monthly costs. Once a solution is identified, it can quickly be plugged in and tested out.
Larger budgets demand larger responsibilities. Enterprises often go through full RFPs for new technology solutions, especially on the scale of OMSs and PIMs. It may take months to reach a decision – meticulous analysis goes into identifying options, tackling the challenges, quantifying total costs, and measing the ease of use.
Technology vendors are not confined to serving one type of business. For example, Shopify is aiming to expand its range of customers. The platform is popular with SMBs but the launch of its composable Shopify Plus signals a move towards attracting enterprise-level businesses.
With a better understanding of the merchant mindset, and how they currently choose technology, vendors can better position themselves to market their solutions, cultivate stronger partnerships, and ultimately drive growth.
Are you seeking strategic advice about your positioning to merchants? To connect with the wider world of digital commerce, then connect with us.