Edmund Frey - The explosion of e-commerce due to the Covid pandemic
Edmund Frey is the Chief Revenue Officer of Spryker Systems GmbH, a Germany-based commerce technology company that produces the Spryker Cloud Commerce OS.
One of the most significant changes we're seeing lately in the digital industry is the explosion of e-commerce that began in 2020 with the Covid-mandated lockdowns. In this episode, we talk more about this, from the history of the evolution of e-commerce to the changes in commerce and customer experience in a post-Covid future. Edmund also shares some examples of how Spryker has empowered clients during this period and talks about how their business model is uniquely positioned to respond well to this rise in e-commerce.
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“It's never too late. But the earlier you start, the faster the ROI will happen and you could be the one to disrupt your competitor by new ways of engagement, new ways of thinking and Spryker is here to make that motion work.”
Welcome to the Agile Digital Transformation podcast, where we explore different aspects of digital transformation and digital experience with your host Tim Butara, content and community manager at Agiledrop.
Tim Butara: Hello everyone, thank you for tuning in. Our guest today is Edmund Frey, Chief revenue officer of the Germany based Spryker Systems. They're the producers of the Spryker Cloud Commerce OS. We have a really great topic for you today, and it's one that we've all definitely experienced and been affected by in this past year. Today, Edmund and I will be discussing the explosion of e-commerce due to the Covid pandemic. Welcome Edmund, it's really great to have you as our guest today. Anything we should add before we dive into the questions?
Edmund Frey: Yeah, thanks for having me, Tim. I super look forward to such a pretty present topic to go over it and of course, Spryker plays a pivotal role also in supporting in times like this. So, I’m eager to discuss and let's see where your questions will take us on this one. So, nothing to add on the entrance, let's just roll into the conversation, I think.
Tim Butara: Awesome. I’m also really excited about this particular topic and it's been one that I’ve had on my mind basically ever since we started the podcast, but I wanted somebody who's really an expert and has experience in e-commerce. So, I’m really glad you're the guy for this.
Edmund Frey: Thanks for the flowers.
Tim Butara: So, let's begin with a short look into the history of e-commerce. Was there any particular moment or like an event that kind of changed the course of e-commerce, it changed how people view it?
Edmund Frey: An interesting question. I think to answer that one is a bit tough to say like a particular event so at least I can't point to one. I'm in the industry since the early 2000s and I remember my time with BA, where BA was a J2E infrastructural app server where it was the idea born to standardize commerce and bring the internet in a shoppable moment was the product WebLogic Commerce back in the days. I remember where I was sitting with a catalog retailer back in the days where I tried to sell him the way forward that he's able to leapfrog, bring his client the same experience also online on the internet, and he said to me back in the days ‘Eddie you’re young, you're ambitious, I understand you, but you have to see our customers are catalog customers’. Five years later, they went bankrupt because of that.
So, maybe there was a particular moment in my life, I understand not everybody believes in what's to come and now looking backward we all know what happened. I think with Amazon at the forefront I’m betting all horses on online. Coming from books to the marketplace, to all the words now they-- with Prime, with Fresh. I think they're conquering as we all know everything which can be sold online. They gained the trust, they made it easy to be found, they understood that the internet has to be used as a full service and to strive forward. I think that, as people understood more and more, was how commerce has changed. So, no real particular event. As we talk later about corona or Covid, I think that is an event of acceleration. But till then, it was just people of several ages, different verticals also found and copied concepts, and I think it's just here to stay and it's just accelerating on the way forward definitely.
Tim Butara: Yup, I definitely agree. And actually, that's a good example of Amazon, you know, since Amazon is the player in the e-commerce industry, the main name. Basically, some people don't even order anything off any other site, they just get everything from Amazon. So, I think that definitely was a kind of first milestone so to speak. But you also correctly pointed out that probably an even more important milestone was the Covid pandemic, which we're still experiencing now. But maybe before we move on to that, I’m interested in… you know, these were kind of the two big things that helped with the adoption and acceleration of e-commerce, but were there any other factors in the development of e-commerce and the development of the web and tech in general that contributed to it?
Edmund Frey: Yeah, I think when we look just e-commerce it's a bit narrow, I’d say. Although when you talk to an insurance company or a bank and you want to have them lean into e-commerce, they will not adapt it, because the word commerce always is like selling goods to someone at least in the area of the markets I oversee. So, I think looking a bit more broadly and how the internet evolved, there was the web 1.0 which it was primarily where in the beginning of 2000s where companies had to enter the web. It was more a representative website, like a business card like ‘this is my company, this is my business, call me, or fax me’, maybe even back in the days. Then web 2.0 was arising or in the beginning there were a lot of players like search engines, applications found a way and also was the introduction of mobile phone with smartphones, 2007 I think until 2010, we saw a big shift where the web content management had to go more omnichannel, I’d say, or multichannel it was back in the days. Not so much evolving commerce to the forefront but it was already there significantly but just supporting, let’s say, the local storefronts and bringing commerce to the forefront.
Today, web 2.0 has been seen as the GAFAs. So basically, Apple, Facebook, Amazon and Google are the main entry portal, so it really accelerated down to the big players to rule how we use the internet today, and also then how you find somebody to make a sale or to find the commerce transactional applications.
I think forward looking, and we might touch that a bit later, web 3.0 is on the forefront, where we free up ourselves to also get out of the browsers and get out of the app stores to download only the apps Google and Apple allows us to with PWA in front end as a service, as trend technologies. But looking to this from the development side, I think there was several stages where commerce played a pivotal role of “easier to use”. When it was more the catalog type of browsing and ordering it really got more based on search to find things and then I think with the rise of social, there was a different notion coming to play. So every new channel put on top of commerce and digital has driven shifts in where people buy, how people buy and how commerce was rising, its importance for the companies to drive businesses.
And as I said, retail mainly but we also see, in other verticals now nowadays. I was just talking about insurances, how lemon.com has changed their complete way or Airbnb, that service wouldn't exist with an internet and commerce platform to disrupt the area of hospitality. Or take Netflix, how they disrupted the normal broadband television in terms of, I consume when I want, and how I want and what I want a type of offering, so you're not called e-commerce, but that's also transactional businesses which is part of commerce, yeah. So, I think goods, services or things I was just mentioning are blending to the motion and it won't stop here. We're just in the midst of that shift into the online world.
Tim Butara: Those are some very good points, yeah, Edmund. It’s exactly that, right? It's a topic that's actually-- I thought that the explosion of e-commerce due to the pandemic was a broad topic, but it's not broad enough to cover everything. As you rightly pointed out, it's things like Netflix subscriptions which can't be rightly called commerce, but we still saw a massive rise with them basically alongside all the milestones that you mentioned, the improvement of the web, the improvement of how people interact with it, mobile, always on, stuff like that.
So, yeah, I think that’s a discussion for another time. Let's just focus on our topic for today. And yeah, as you said, we're going to be talking about how the future of e-commerce and these kinds of services will look like in a post-Covid world, but let’s jump back a bit and focus on the current pandemic and what was going on. And you as Spryker you’re experts in e-commerce, you probably have a lot of partners and clients who turn to you for these services. How have you seen these partners and clients been affected by this rise in e-commerce and more importantly even how did you act on it?
Edmund Frey: It is a broad question with a lot of points. So, let me take first what we saw and I think nobody planned, was the pandemic. Nobody could foresee and still foresee how things are going forward. So, I remember because I started just a month before the pandemic really hit the society with full-fledged, I started with Spryker in the beginning of February, I remember because I was traveling the Asia and even Hong Kong back in the days in January where the first case had been found. And then yeah, I thought it was a normal 30, 60, 90 days plan when you take on a business with the focus of aligning to the right verticals, aligning the team, go forward with scale.
With March, with the lockdown, nothing that was planned could be executed in the way I think. So, it's now clear and the first program we were looking at is, who are winners or losers. And loser is a hard word but definitely, now we know there's a lot of verticals where travel, hospitality and others did see and retail especially with all the lockdowns a super under pressure. And it was foreseeable, so we checked in with the analysts, we checked in with our client base and yeah, I had to adapt to that, to support that motion.
Basically, I think from that point, now we are more than one year into this theme, I also know because 15th of March is my birthday and I was having the last party before we had to shut down and it's almost again in the next two weeks from now on. So, it's really a year in, so we can look back but we also can look forward. And your question is more about what happened last year.
And I think clear winners are the ones who were able to adopt fast enough. And look into the IT stack, some companies have and adopt fast enough means you have to use what is the only channel you have available in the lockdown. It's online, right? So, not every vertical or everyone, especially, in the DACH area was prepared to do so. So, we saw a lot of customers reaching out to our partners and ourselves, like, how can we bridge the gap?
So, like a car manufacturer for instance, they have a great main site, they could see the spike of people coming on the site, sitting at home at the couch, browsing over their property, but they had no store attached to this to sell the cars they have in their dealers, right? And even there, there was a dis-link between the dealer and the main page because they were always like ‘we don't want to take business away from dealers’ or ‘let's not mix it up.’ Pandemic changed the game. So, that’s one of the great examples, I think, where we could with a modular system we have built and bridge the needs between their own properties, so, we're headless, we could integrate easily to the web stack and with being modular, we could also integrate dealers together with the marketplace modules we got, and in just three weeks we, from first touch, launched that site to be live. People could reserve their car and buy the car online, which then after the lockdown, could be grabbed and so they even accelerated their businesses instead of slowing down by that motion.
And there’s other examples where clearly in B2B where it was not just, you cannot go with a sales rep to your client and you have to use online channels, you have to use I don't know LinkedIn or other social media to get in contact with your clients, but also the supply chain has been broken because of a lockdown country and stuff like that.
So, we've seen a lot of requests in this area. To support them with the heavy systems, they had, they couldn't change the supply chains fast enough, so Spryker as modular as we are, and having the right understanding of what to do in an agile way, we could prepare and support them to bring manufacturing home to integrate with the systems agile and fast, to kind of mitigate the shortfalls here from the IT side.
So, great examples, maybe one more; a sport retailer who's buying goods. Typically, they meet every quarter with the vendors they buy from in person. So, what was the request we solved also in a two weeks project, again, very agile and lean, that they can meet all the vendors online and exchange the goods they will need to purchase to be able to not miss out a season. So, that's how they could at least act in the summer, to have the prices negotiated, to have their shelf being built and that one, I’m pretty proud, we brought forward in such a fast, innovative way. It's never been done before so, Spryker could help together with partners how that problem could be solved.
So, a lot of pandemic costs, problem statements were speed is everything. Having a modular system like Spryker to only install, to only bring into the project what is needed, to also get down on the level of maintainable system in the end. That was things we could help with the pandemic.
Then on the other hand we clearly see in further need which went along all the year in terms of ever locked retails, so click and collect is something which is absolutely the only way how you can still combine let's say a personal touch to your client which is a mix of online order and personal take away. So, we've seen that motion in the US, it's called curbside delivery. We already started such a project together with a do-it-yourself store, we had all the components on our modular commerce platform which yeah, we could help a big discounter here in Germany, to bridge that gap because they've never thought they wanted to have such a solution. In four and a half weeks we built it next to their IT stack and helped them out and now we've seen several other projects to adapt to what we have and drive that forward.
So, I think I have tons of other examples, but it always comes down to how Spryker and especially our ecosystems with partner can help or how we helped and we will help is to bring forward what is the problem statement to build and adopt in an agile way and to build from there and scale it to the enterprise.
So, there's no need to wait, there's no need to make a big project for commerce with a lot of money, a lot of time, a lot of people involved; you can start with Spryker on a small scale and then to roll it out globally, you can really bring what you've built MVP by MVP, step by step in an agile way to then a full-fledged system in the end.
So, I think that was what the pandemic showed pretty significantly, because people went off the normal trails, means, to do a brutal long governance project to spec out every nut and bolt and to go off the waterfall way of thinking and behaving in very fast and agile ways. I think we've seen that several times and it's continuing like this. And this is where Spryker fits in very well, being a very modern and modular platform to fulfill that kind of motion, I say.
Tim Butara: Awesome yeah, well said. Agility and speed are definitely the name of the game, in a time when everything moves so fast, and when they're-- if everybody is on the web, if everybody's selling stuff on the web, that means that your competition is probably also moving fast, right? So, if not for other reasons, then you at least have to move fast because you don't want to be outsmarted by your competition, right? So, it makes perfect sense that you should focus...
Edmund Frey: Absolutely, although it's interesting there wasn’t so much, like, what is my competitor doing? It's really like getting the supply chain downstream upstream in order in B2B. Or as mentioned, I can't even reach my customers anymore. So, to bridge the gap, to go online, especially, and that's why I had a hard time to answer your first question, I think in the DACH area, Germany, Austria and Switzerland, we're a bit behind still on the online topic. I know a lot of brands are not bringing them forward where they're still hesitant to bet online. Yeah, I’ve seen statements like, ‘yeah, online is a good channel that's clear, 10 %, 20 % is what we will drive through’.
That has been waived through pandemic. Nowadays, only online and they've been late to the game, altogether, not just one. And it’s not to look at what the competitor is doing, it's like, all right, we have to get the thing going and I think that's the good news. And this is what propelled the Spryker of course in our partner ecosystem because, you're also etching then, how much can you deliver at the same time, you know, because everybody is now starting to do what they should have done the last two or three years in a normal motion, in a rush, you know.
So yeah, basically, of course it's also if you do not do it, but your competitor does it, that also swings in but it's not the high priority from what I see, it's more, what's the new normal, later on? What's the new normal, everybody says like when pandemic is gone, how should the world look like? Then the competitor, if he was smarter, and he was faster and he's already modernized his stack, I think this is where trouble lays ahead of people who got hit by a pandemic, most of the verticals don’t make their normal revenue, I’d say. So, you have a double hit: you lost revenues in 2020 and your competitor has maybe have outsmarted or outpaced you by online is now there, you will not catch up if you're not also doing the same thing. But nobody is really thinking … not to say nobody, but … I still see a lot more for themselves than looking left and right at the moment.
Tim Butara: And another thing that I assumed is that, since customer experience is a huge part of business, a huge part of e-commerce, I would assume that, with the rise of e-commerce, with the rise of digitalization, it would also make sense that digital customer experience is becoming more and more important. Like, are you seeing any major CX trends arising due to this rise in e-commerce? And what do you think the key aspects of CX are now with e-commerce being kind of the main player?
Edmund Frey: Yeah, it's a very good question. I think first of all, customer experience is not pure digital, right? So, it is a play of all channels and everything a customer experiences with a brand, right? And I go that far that customer experience is also too short in how to look at it, so you find myself talking about really experience management as such. So, it's really about the holistic view, also how is the employee feeling along with this on the other side, because when you have a human touch, whether it's like we talk right now, whether it's on channels, chatboting are trends I see on how to get faster reaction and also to kind of lean manage cost and efficiency but in a way a customer feels at home.
So that experiences are also part, and then interestingly enough there's one measurement out there which works very nicely which is the star rating, yeah. So people will leave their comments how they feel. People give you a ranking of how they feel, and I think everybody in the industry should be aware that this is the ultimate measurement publicly outside and not even on your own property, where you might be able to tweak, to delete a comment or I don't know kill some of the stars. Nobody will do this officially, but just to get a better outside view. But if you don't own the property, you have to live with what social has been collecting about experience ranking.
Talking about the five-star experience, it's simple to understand when I ask you the question, you go on Trip Advisor and a hotel is ranked with three stars only. Would you book that hotel? Or think of a car ride with Uber, if a rider is ranked three stars would you enter that car? I think you wouldn't, right? So, that’s how you need to think of how experience has found the ranking and is very well used. So, everybody should go for the five-star ranking and we talked about Amazon. I think they are doing very good. I wouldn't give them the stamp for having the most beautiful designed web page, or Amazon does targeting well, yeah. When I bought a monitor, I still got advertisements on various channels about that effect.
So, I’m not going there that the customer experience is great in the way how glossy and nice their digital property is, but the overarching promise that you deliver a full-fledged service in the best way, that includes the understanding of who the customer is, it includes the trust you will deliver the goods I’m ordering, it will also include if I don't like it I can send it back and there's no hassle to get my money back or if something breaks in a year from now on, somebody will take care in terms of services.
I think this is the holistic customer experience and that takes a digital to be employed and connect to the real world on every single customer touch point, where you need to have the customer profile ready, you have to have your systems connected to each other from the marketing, towards the selling and the servicing of the goods and you also have to get the data right.
So, basically if that play is in charge, you're halfway there and then, why is Spryker so important in that mix? We see us in the center of connecting the dots being the transactional business platform for operating systems. I already meant, the word commerce doesn't go along for all the verticals, right? So, it's really about having a system at heart where you can connect all the dots to do the digital transformation based on transactional business models.
You also want to have a flexible system like Spryker to try out new ways of engagement of a customer. Whether it's business models, whether it's to have a marketplace attached on the same platform to add services you do not own yourself, but you can sell along with your goods or with your services. That gives you the proper platform to maximize the customer experience or say to go for the five-star rankings all the way.
So, definitely a good point. So, you ask me also what trends I see in terms of customer experience on the forefront? We already briefly strived the topics of social commerce, commerce come to mail, so you might be able in the very near future to order goods within an email which is tailored to your needs. We also see Alexa or other voice systems taking on the markets, so voice commerce is something very critical people need to think about, because, thinking about customer experience in a voice commerce for instance, I always like the questions, how do you ensure your brand is still relevant when somebody wants to sell whatever, batteries for instance? If you say, ‘hey Alexa order me some batteries.’ you know what you will get? You will get Amazon essential batteries. So, how do you ensure Alexa asks you just to give you some brand names? What batteries do you like? This is where the brand has to be in the mind. Do you not see any content like storytelling marketing or content marketing?
So, the question is of a sense, then you can answer with brands, what factories you like, Varta or Duracell? That could be a totally different type of engagement because, when you said I don't want essentials, you send it back to be weaven in and the next time you talk and have the same similar order to give more options, right?
So, I think there’s a lot of things in that space we have to find out. How we engage best as human beings with commerce to the system and again, here you need a modular way to test out in real time what works and what doesn't. And then, there will be one major driver I think which is in the automotive industry. We still talk about futuristic stuff that we see autonomous driving. But if we have it, it will be a game changer because you will sit in it in a kind of living room area for quite a while if you commute to your work space or if you're traveling just for leisure.
This is free time we've never had in our hands and I think in this area, advertisement, in this area, commerce, in this area, voice to commerce because you will not have a keyboard in a car you will enter, will be one of the biggest new browse areas for commerce. And I think who got that right we’ll see a great brand-new market for themselves. It's a bit futuristic but it's not that far out I would say. It's like the example in the very beginning, if I now pitch that to somebody who has a catalog customer, you might tell me, there will always be self-driving cars because it's fun to ride a car. But the truth is, there will be a big change and I think that's a big new topic to customer experience as such.
Tim Butara: Well, we already kind of covered the topic related to the future of commerce in a post-Covid world. So, I’ll just move on to the final question that I have for you and this one's more practical, maybe directed to those listeners who maybe have some challenges with implementing e-commerce or who are worried that they missed the mark because they didn't get into the game and get online fast enough.
So, I want to ask you, as a final question, is it already too late for marketers and decision makers to kind of capitalize on this boom in e-commerce? And what would you say to people that want to capitalize on it, that want to get into it but haven't yet done it?
Edmund Frey: Yeah, very good question, the short answer, it's never too late. As we always see and there's one rule on the internet - there are no borders. Don’t think in countries, right? And the smallest company, look at Netflix or the examples we already scratched today, the smallest can interrupt or disrupt significantly because of the fact size doesn't matter and there's no borders on the internet.
And yeah definitely, it's never too late, as I said. We see big trends which are in the era of the marketplace right, I already mentioned it. It's part of our Spryker platform and offering. So, you can easily test out what else and services you want to offer with a third-party when the management is easily adoptable to sell it as a white label or sell it through or even build marketplaces without your own goods to test out markets, to test out enhancement, like I call infinity shelf, right?
So, you can build an infinity shelf, by technology and to test new waters not maybe in your home market but also, in some other countries, why not? I think we all got the tools and the borders to get something started are not too big and from cost it's also not too big if you consider it in an agile way as I described it. So, definitely not too late. Our ecosystem, ourselves, we are eager, as I mentioned. We have companies, we have customers or prospects coming at us with a problem statement and we are always ready to rumble.
We also say no to something, if it doesn't fit our heritage, yeah. But if it's a complex sophisticated problem to be solved by a business transactional commerce platform, we're ready to support with ideation, we are ready to support with our partners together of how a fast checkout could work like, to also calculate the business case to it and drive it forward and test the waters, right?
And then it's a crawl walk run, where failure is your constant partner, I’d say, you learn from failure and you create something big out of this. And this is where we see companies we work with to start small and scale to multiple, triple a digit million businesses even up to the billions from a MVP state. This is absolutely possible and again, it's never too late. But the earlier you start, the faster the ROI will happen and you could be the one to disrupt your competitor by new ways of engagement, new ways of thinking and Spryker is here to make that motion work.
Tim Butara: Awesome, some very motivational advice right there at the end. Great way to close the episode, Edmund. Just before we finish, if people want to reach out to you, to learn more about you or Spryker, what's the best place for them to do that?
Edmund Frey: Yeah, funny enough LinkedIn has really mutated to be one of the best ways to engage not just for me, but when I talk to colleagues or partners similarly. So, you will find me as Edmund Frey within Spryker as CRO. Drop me a PM there on the other hand. I’m also eager to put forward our great website, which is also a good resource to learn more about us in the first place, and of course we have a contact form there and who are our partners, what are use cases we achieved, so, feel free to also go there if you don't want to reach out directly to me to check in on Spryker a bit more and learn what we could do for you or together with you.
And just a small closing statement, it's not you choose technology, it's more, it's you choose technology, you choose a methodology, how you want to test out things and build things and you need a strong partner to support you with that factored in. I think that's the example we have and yeah, looking forward to connections through the podcast, what I hear here backgrounds on feedback, personal, is my thinking right? Is my view right? It’s not about right or wrong but, like, what your users and listeners are having as reactions to my a bit bold statement maybe in one or the other corner. I like to discuss that further beyond the podcast. So, feel free to reach out to me. LinkedIn is the best way.
Tim Butara: Awesome closing note Edmund. Thank you so much for being our guest today and for sharing these awesome and as you said maybe bold insights. But you know, it's better to have more bold insights, you don't want to be the guy who just plays it super safe and doesn't want to say anything that might be controversial, I think it will make for a more valuable episode the fact that we had bold statements as you pointed it out. Thanks again, Edmund, and to our listeners, that’s all for this episode; have a great day, everyone, and stay safe.
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