Commerce Syndication:
Add Indirect Sales to E-Commerce

Electronic Workplace: Internet Server Software

Key Issue
What types of capabilities will be incorporated into major Web server software packages over the next three years, and what capabilities will be provided by other products and vendors?

The practice of electronic commerce is no longer recognized solely as an issue to be addressed through direct sales to end buyers. Instead, enterprises increasingly are deploying e-commerce as a way to enable distributors, dealers, agents and other members of the sales chain to establish their own storefronts and make sales.

Such services smack of paternalism at their best and authoritarianism at their worst. Many distributors and dealers maintain relationships with multiple powerful manufacturers or other product originators, and resent the dictation to bring to the surface only a single line of products. These dealers and distributors represent a powerful class of partners that their suppliers can ill-afford to offend. They must therefore be granted the ability to place goods from more than one supplier in their storefronts. Many such partners have already done so through a homegrown Web site or other independent installation. However, these sellers have simultaneously discovered that the process of establishing multiple-product-line storefronts is an onerous task, and so they are amenable to solutions that do not require them to put so much effort into their storefront support processes.

As a result, these seller partners invite their manufacturer suppliers to populate their interactive sales channels with product data and the underpinnings of other aspects of sell-side e-commerce. This especially includes marketing content (such as product data sheets, images and metadata), catalog content and aspects of the interactive selling system. Such a system meets the needs of the sales partner, which wishes to assert and exploit its independence; as well as the manufacturer, which wishes to avoid versioning and support issues inevitably caused by its "downstream" partners' adoption of its selling information.

Commerce Syndication: Easier Said Than Done

However, despite the necessity and clarity of some business goals, execution can still pose a significant challenge. The simple necessity of publishing catalog information to multiple recipients is a daunting task, made no easier by the recipients' persistent requirements for particular data formats or intermediate stages. Gartner is aware of the necessity for legacy formats for outbound publishing, including EDI and comma-delimited files, as well as richer but less-well-known formats incorporating XML. The ability to offer multiple paths to sales partners — including those in highly volatile environments, such as e-marketplaces and private exchanges — is intimidating, if not impossible, for enterprises with limited IT resources and little desire to deploy resources at the whim of supplier partners.

Sell-side e-commerce vendors increasingly seek to answer this conundrum through their own development offerings. Data-translation vendors are adding commerce syndication to their own arsenals of products. In essence, Gartner sees two tiers of provision of commerce syndication.

Two Tiers of Commerce Syndication

The First and Simplest Tier: At this level, enterprise selling information — including the underpinnings of a catalog and the marketing information that supports product lines — is transmitted raw, so that presentation can be layered on top to meet the needs of the seller partner. This most-basic version of commerce syndication does not usually require the services of a rich information broker. Typically, sell-side software is directed, whether manually or automatically, to perform an export of catalog data to a neutral server, from which such data is retrieved via some type of file transfer protocol. Such syndication takes place on a periodic basis.

Subsequent Tiers: More-sophisticated tiers require translation of data into other formats to exploit the complexity of product information, which facilitates the discoverability and marketability of the products. Integration to buyers' e-procurement installations may require data to be translated to particular flavors of XML or to legacy formats, such as EDI. Such formats also support supplier integration for e-marketplaces and facilitate the connection to enterprise resource planning (ERP) systems.

A vendor that provides such data translation and even the syndication service is also necessary, as enterprises will want to syndicate information to more than one destination. Managing such integration can drain enterprise resources. Destinations may include: 1) any combination of supplier management projects initiated by major buyers; 2) shared commerce services installations established by sales partners; 3) impartial and private exchanges; and 4) one or more enterprise sell-side installations.

1. Enterprises require methods for overlaying e-commerce on traditional business methods.

2. E-commerce demands more than direct sales to succeed.

3. Rarely can an enterprise use a single data format to communicate with more than a few channel partners.

Increasing levels of sophistication carry not just a list of products and associated attributes, but metadata, which will enable users to locate the products via searches and interactive selling systems.

Bottom Line: Commerce syndication serves the needs of dominant sellers whose selling partners possess the resources and inclination to develop their own e-commerce platform installations. Enterprises must deploy shared commerce services and commerce syndication to support channel partners — or face lost distribution channels and irritated customers.

Gartner's Business Management of IT Research Note TU-13-7966, 11 June 2001.

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