A few months ago, a multi-billion dollar food and beverage brand approached us with a proposition. As part of evolving their eCommerce business, this company was evaluating new eCommerce platforms and considering what this change could or should mean for their subscription business.

However after a few conversations, it became clear that what they were truly after was a holistic relationship commerce strategy–something that would help them deliver frictionless, personalized shopping experiences while building lasting customer relationships, in turn accelerating recurring revenue.  The a-ha moment came when their CIO told our sales team: “We want you to think about Relationship Commerce first, eCommerce second.”

From that point on, priorities shifted. Instead of recurring revenue as an add-on to eCommerce, they wanted to approach their platform strategy in the opposite direction – with relationship commerce at the center and the eCommerce platform supporting that strategy.  This felt very similar to the shift in the 90s when an online shopping cart was “an add-on” to stores. Until it wasn’t.

Increasingly, we’re seeing more and more brands and retailers take the replatforming plunge, and doing so with relationship commerce front and center.

Companies that already have in-house subscription experiences are moving these experiences to a third-party platform, rather than trying to fuse new tech to an existing program. And many are partnering with providers like Ordergroove who have the technology, data and skills to help them implement and scale. Rather than allocating their resources to building on their own products, merchants can now concentrate on communicating their brand value and merchandising expertise.  The large majority of Ordergroove customers are replatforms and this trend is only accelerating.

Of course, replatforming is never an easy choice. Brands and retailers fear any interruption to their customer experience that they’ve typically sunk millions of dollars into their existing technology can be highly disruptive, especially when there are annuities and customer commitments involved. But the pros are increasingly tipping the scales towards replatforming with an eye towards long-term relationship commerce opportunities. CMOs, CDOs and engineering leaders are increasingly leaning on platforms like Ordergroove to handle key pieces of their technology stack, trusting those partners to keep ahead of technological innovations in AI and Machine Learning, while freeing up their internal engineering resources for other brand-specific initiatives.

There’s a historical precedent to this trend as well: eCommerce. While in the mid to late 90s, companies initially tried to bolt home-grown eCommerce solutions onto existing tech, they quickly learned that it was easier to buy than to build — despite the millions that had been spent initially on home-grown systems. Nowadays, the brands that build proprietary ecommerce technology are few and far between. But that’s also led to eCommerce platforms becoming more democratized, and platforms like Shopify gaining significant market share.

Enter Relationship Commerce. As recurring revenue grows as the fastest growing segment of commerce, a huge shift in the industry is at play as more and more companies realize they must put a large amount of importance, and investment, into the portion of their tech stack that drives recurring revenue. 

At Ordergroove, we have an accelerating number of brands where recurring revenue is 50% or higher of their total online sales.  The feature set and depth required to enable a CMO to unlock their Relationship Commerce vision requires a similar level of complexity and comprehensiveness as an eCommerce platform.  They know they need to have the strongest tools and technologies for their recurring revenue experiences on their side.

The fact of the matter is that brands and retailers are buying eCommerce platforms nowadays; not building. And as Relationship Commerce grows and matures, a similar path is evolving for the recurring revenue market – it’s 2010 all over again. Why would they try to build programs and keep up with rapidly evolving tech and consumer expectations themselves when they can have a partner who can keep up with the tech for them? 

Great question.