Australian retailers shopping for technology products prefer to stitch together a best of breed tech stack rather than betting all on a unified marketing cloud.

Over the last few weeks Which-50 has spoken to marketing and digital leaders in retailers such as Temple and Webster, Nude by Nature, and Lux Group, along with other executives who commented on condition of anonymity as they are not authorised to speak to the media.

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Costs, disparate needs and concern about integration of a vendor’s acquisitions into the stack are all factors deterring retailers from embracing a marketing cloud solution from a single vendor.

Sven Lindell, CMO of online retailer Temple and Webster, is an advocate for bolting together a best of breed solution which is tailored to the business.

Building your own marketing cloud allows businesses to decide what is the most important piece of technology and add to it as needed, Lindell told Which-50. And, he said, the best of breed route has the advantage that you only pay for what you use.

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“It’s much more cost effective to build your own marketing cloud and you can actually build it around the capabilities of your organisation not the acquisition path of a big software company,” Lindell said.

“It’s cheaper — I’ve been looking at them for years — and you don’t get cost savings by going to a platform provider that has everything. In fact they charge you three or four times the amount because they say they make it easier for you. You get a whole of stuff that you don’t need and don’t use.”

To be able to go and build your own marketing cloud, businesses first need an underlying technology layer that can capture all the customer data generated at each touchpoint along the shopping journey.

Temple and Webster is in the process of building a customer data platform to hold micro-level customer behaviour data.

According to Lindell, software systems have typically been designed to capture “big CRM moments” such as a purchases. Now, however, it is just as critical to capture micro data moments — such as a customer clicking on a product page twice — and use that information to start promoting products to that person in a particular style.

“You have to ask yourself as a business, can you capture all that information and do you have the technology sets to be able to do that? If you are willing to invest in that technology then I would go down the path of building your own marketing cloud, absolutely,” Lindell said.

Integrating applications from different providers is a non-issue these days thanks to advances in webhooks, APIs and software design, Lindell said, adding that he wouldn’t consider any software systems that can’t be easily integrated to an existing tech stack.

On the flip side, older marketing technology still has work to do when it comes to making it easy to get data in and out of its systems.

“My frustration is that a lot of business-critical systems, more the legacy providers, haven’t gone enough of a way open up their technology to allow that sharing of data,” Lindell said.

One large multi-brand omnichannel retailer told which Which-50 he prefers best of breed over a singular platform stating, “I don’t think anyone has cracked every corner of retail yet.”

The choices are best made on best fit, he said and they will vary on a business-by-business basis. “Every retailer is different, so while Gartner reports are helpful, retailers won’t necessarily chose the vendors in the top righthand corner every time.”

One problem vexing omnichannel retailers with large store networks, a solid digital offering and large loyalty program, is online to offline attribution of sales.

“It is important to think of digital as ecommerce as well as marketing.” He told us that so far his team have been unable to find a key metric to measure the impact of digital on total sales.

The retailer explained that the current attribution of digital influence over store sales is largely a manual process of following breadcrumbs left by shoppers.

For example, if a loyalty club member receives an email, opens it and then later presents their loyalty card in-store when making a purchase, they can understand the customer journey.

Two schools of thought

Even retailers who don’t feel strongly toward suite versus best of breed, tend to come down on the side of best of breed in practice.

“We would be agnostic as to both options but currently we purchase specific products for specific marketing tasks,” Adam Schwab, MD of Lux Group, told Which-50.

Gavin Merriman, Head of Digital at Nude by Nature, said both approaches have merit, however Nude by Nature has opted to build its own marketing cloud using individual apps because of the prohibitive cost of a single marketing cloud.

“In theory I like the idea of a single integrated platform — for example Adobe Marketing Cloud — as a fully integrated single platform should be more powerful and easier to operate. However, in practice I still think they have a long way to go before they are properly integrated as a single platform, rather than lots of separate acquisitions that have been stitched together,” Merriman told Which-50.

“At the moment I think you’re better off going individual solutions, especially when you factor in the cost. But in a few years I think a single marketing cloud will probably be better once it really is properly integrated.”

Another omnichannel retailer Which-50 spoke to anonymously said his business preferred a best of breed approach but pointed out there are two schools of thought on the topic.

“Best of breed is the preferred choice but it does come with integration issues that usually can be solved through a good middleware solution, and having a team who can identify the integration points and support the both systems when issues arise. This results in getting the best out of all systems,” the retailer said.

“Having a one-system-fits-all approach is also good if you don’t have a good digital and IT team to support complex integrations, although this type of approach usually falls short in giving the best results for all areas.”

He emphasised that vendors need to be aware that different retailers will have different technology needs, however the majority are still shackled to legacy systems.

“The other major issue with vendors is they don’t realise that most retailers have old archaic back end systems and integration is hard, time consuming and cumbersome and not as easy as they make it sound.

“Before going to market, they need to speak with the major vendors and develop all integrations. Then the solution implementation for the retailer will be much quicker and easier,” the retailer said.

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We also spoke to retailers who have opted for integrated stacks. While they were happy with their choices, most were still in the early phase of their projects and unable to commit to a position based on real life experience. Where they had criticisms they related to specific elements of a marketing cloud that came with the stack but didn’t fit their requirements or was less effective than point solutions they knew about.

Price was also an issue. Retailers felt that pricing for the top shelf marketing clouds reflected the scale available in US and European markets — which they said was not replicated in Australia.

“It makes the ROI case hard to justify,” said one.

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