Kelly Goetsch, chief strategy officer at enterprise commerce technology platform Commercetools, expects to close this year on a high note.
Clients are moving beyond the general uncertainty of the election, and retailers are in a better position to finally make decisions that they’d been sitting on, Goetsch told Retail Brew. “Projects that have been frozen for six months or whatever are now getting approved.”
It’s heads-down holiday season crunch time, and Goetsch said, “What everybody’s looking to with running legacy tech is…they need to get to something better and stronger and be certain it will work, which is why we’re seeing such a big rise in business.”
Commercetools, which powers digital commerce for retailers like Sephora and Express, reported a gross merchandise value increase of more than 45% YoY to over $30 billion in 2023, with annual recurring revenue growing more than 65% YoY in the Americas region.
Goetsch sat down with Retail Brew to discuss rising competition and future roadmaps for e-commerce tech providers.
This interview has been lightly edited for length and clarity.
Do you feel rivals like Salesforce, Shopify, and others are encroaching on your business?
If somebody’s deciding between us and like a Salesforce, one of us, as a vendor, is in the wrong room. Because, that, to me, says that the retailer doesn’t know what they want, because they’re very, very different approaches philosophically.
We as a company can be as opinionated as our customers want us to be, and we have a lot of customers who say, “Look, this tech is great. We love the openness and flexibility, but we need some guidance and support. Help us out.” And we can be as consultative as we need to be.
How has the e-commerce tech stack tangibly changed over the years?
In the ’90s, 2000s, even today, a lot of legacy platforms are traditional, three-tier architectures. You have physical servers…and then you’ve got application servers that actually run the software application.
It was a lot of software, and the challenge with it is if you touch one part of the application, you don’t know where there’s going to be impact…And then you had web servers or load balancers, and then you have to stack it to scale up everything…That was historically the architecture.
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We invented something very different. We came out of cloud and cloud-native. We invented MACH [microservices, API-first, cloud-native architecture, and headless commerce]. Micro services are little bits of functionality that are all written as single, autonomous code bases. And what’s great about it is [our team] can make changes to that all day long…They can add net new functionality, which they do, and as a result, you can get the innovation pace way up.
Which cloud computing platform do retailers most commonly use?
So the most common, and it’s ironic, is we have Google [Cloud] on the backend, and then [our clients] have AWS [Amazon Web Services] in the front end. And it’s interesting, because a lot of CMOs of retailers will swear up and down that they hate Amazon, and the CTOs say, “Whatever, we’re just going to do it.”
What areas of functionality is Commercetools likely to invest in for the future?
It’s things like promotions that we’re continuing to build out and support, like buy one, get one free.
Subscriptions is something that we’re working on right now….It’s subscriptions functionality is what it is. There are a lot of things that people buy in subscription. You can buy socks on subscription, whatever it happens to be. So, customers have been able to do subscriptions forever with us, but it’s taken a little bit of work, and now we want to just bake that into the product.
[For] some of the more advanced promotion use cases, we’re continuing to focus on scalability, performance, throughput, security…and make sure that we’re good there.
What do you most look forward to about being CSO at Commercetools?
I look ahead. So it is my job to make sure we don’t get disrupted by some crazy new technology five years out.
What could that be?
Well, first, I think AI is enough for now.
If somebody manages to get quantum computing actually functioning…that’s going to break all the encryption on every website you’ve ever used in your entire life. And that has big implications for us, because every security mechanism any retailer has installed could be potentially broken if quantum computing actually becomes a thing.