#33 New chapter for Shopware with Alexey Pronin

What direction is Shopware moving in and what does it mean for the industry? Kasia is talking with Alexey, new General Manager EMEA at Shopware.

 

Kasia

Hello everyone. It's a really special episode because I have a special guest directly from Shopware. Hi Alexey, I'm really happy to have you here and can you say a bit of yourself?.

 

Alexey

As you might know I'm pretty new to the Shopware community and happy to be part of that and continue to learn that I started in Shopware first of June in the role of general manager for Emea I think moving forward we'll discuss a little bit more what it means. Before that I'm not new at all to the ecommerce world and to the ecommerce industry kind of turned out to be specialized in this area and in these dimension since 2011 was working in Oracle  before then, hybris, recently Spryker and now it is Shopware so that's kind of shortly my journey between 2011, actually now yeah and the journal in the it industry in different capacities in different roles across Emea since already 18 years so I feel myself a little bit old by now sometimes.

 

Kasia

We'd love to hear more about your background and your journey that led you to join Shopware. What's motivated you to be a part of this organization? Please tell us more about yourself because it's very interesting.

 

Alexey

It's quite simple and straightforward. So as mentioned I started my IT career so to say eighteen years ago. Originally as implementation consultant for the year then I kind of quickly figured it out and got the feeling in all of this. Kind of system testing and writing instructions for the users and analyzing the processes is quite interesting and definitely an area to explore but this is not something I wanted to do for the rest of my life. I felt myself more kind of closer to the commercial function. And this is where I shifted quite early in my career first and became one of the Microsoft Gold partners and then at the end of 2008 was headhunted into Oracle so I was a part of the Oracle retail global business unit organization for about 5 years taking care of the enterprise retailers. Across eastern Europe within Oracle and then as I mentioned already in my short introduction in 2011 an interesting occasion for my future life turned out to happen. Oracle acquired Atg and the Atg became part of our product portfolio which I needed to position to my customers back then so that's how I started my ecommerce journey. So this was quite a successful and interesting journey. In 2013 I was headhunted by a well-known name I think in the European space, a company called Hybris and they asked me to practically kick off and start their operations in Russia, which is my home country originally. This is what I have done and then the hybris got acquired quite soon by the app group and this was kind of my entry point into scp where I spent 8 years and the scp gave me great opportunity to work in many countries and many geographies so relocated end of 2017 to Switzerland was running in swiss business and there and then had a original responsibility as the ceo for Ema North business how Icp calls it a covering the Uk Benelux Nordics and France then in total was like quite a long corporate journey with Oracle. I started feeling okay either stay in this beautiful corporate world like kind of forever or I want to go somewhere more dynamic where I have got also more freedom to execute and more freedom to build things from scratch and this is where I joined the Spryker team so early twenty twenty one I was in for two and a half years covering the international expansion of the business across various geographies such as Uk, Nordic, France, Middle East, Spain, and lately Apac and with a strong focus on the enterprise segment because I think many listeners of these podcasts know this is exactly the focus of Spryker. Earlier this year we connected with Stefan Hamann whom I guess everybody knows on this podcast for natural reasons and we started exchanging our views on the market and also the experiences we have got. I have learned about what Shopware plans for the future and the ambitions when the company has to expand into the mid market space. I got really intrigued to join the executive team of the company and see how I can best support and make it printed to the next level of the business. Specifically what motivated me I think first of all I would definitely highlight the culture of Shopware which is as some of the listeners might have heard, open, authentic and visionary and I would say that Stefan and Sebastian were really super successful in my view of bringing this to life, and this is what I observe on a daily basis both within the company and within the community that these principles really work and they really move forward Shopware day by day and help. And secondly of course look there cannot be a niche software player where product is not important right? So product is definitely extremely important and has been for more than 13 years by now in the ecommerce space. I can definitely say that what I have seen from the product value proposition so far and the feedback I'm hearing from the merchants is really incredible. So the functional capabilities and the technological backbone which Shopware has is one of the strong reasons which are motivating me and which makes me believe that we have got a lot of success ahead of us.

 

Kasia

Quite an experience. Regarding the culture of Shopware. This is very important to work in a place where culture is good and it's open for open-minded people. So I guess there is a place for your open mind ideas.

 

Alexey

Yeah, so far. There is quite some place for sure. And yeah, look I think it's always like a much more effective approach compared to like the top down motion so to say because the moment you are, you're really doing. It's an open and authentic and visionary way you have many more ideas and many more opinions and suggestions coming from across the organization from across the community which is even more important. So It's not only that we are open to the ideas and the suggestions and thoughts on how to improve for our employees which is definitely the case and they can say that in the last couple of months. I had quite a number of initiatives which were coming exactly from the team and this is incredible. This is perfect. This is what many companies would like to stimulate and are looking for the way to do so and Shopware I would say pretty much succeeded already in achieving this. But what is also even probably more important for the wider community. It's not only about our internal team but it's also about the ecosystem which we have gotten in place. So this also relates to our integration partners, our technology partners and moreover. Of course our merchants and customers exactly.

 

Kasia

The whole community right? Yeah, how has this Shopware structure evolved over time and what are the key changes that have been made? What is your role in Shopware compared to Stefan and Sebastian because I guess it's a very very important question. Have there been any recent changes within the Shopware structure? Please tell us more about this topic.

 

Alexey

Yeah, definitely happy to cover this and explain in a little bit more detail. So my scope of responsibility within the shopware is everything to do with what I would call go to market and commercial operations so this includes marketing business development. Sales integration, partnerships technology, partnerships customer success, customer support Shopware academy and of course our Shopware store or our actual marketplace for our ecosystem previously. All of those functions were reporting directly to Stefan and Sebastian.Through of course the specific leadership and management team. So far so on and with myself taking over this overall responsibility in this part and in this scope of business Stefan Sebastian will be having more and more focus on this on the future strategy of the company on thought leadership and product innovation. That's what I mentioned, that's kind of.

 

Alexey

Our agreement and of course together with that they are remaining the Ceos, coCeos and co founders of the business. They're super actively engaged into the community. They have got their super strong networks of both merchants and the partners whom they know for ages. And of course we are actively collaborating together to make sure that we secure the success and the future vision and the benefits for the community in general.

 

Kasia

That's great that Stefan and Sebastian will have more time to focus on ideas on product and and everything because they have you ah so. To do many important things so that's great. Thank you for sharing this with us as the hype around Shopware has been growing because we can see this. Could you provide some insights into its current state and the direction it is expected to take within the next year

Alexey

Yeah, sure so look first of all I think it's great to know and to hear that the hype around the Shopware is growing. That's exactly what we need to continue successfully to grow in our ecosystem and grow our business and our ultimate goal. How we recently are formulating this to have more Shopware everywhere practically. That's kind of the ambition where we are standing now. I think it is also quite important because we have got a really strong basis specifically in the media so out of my knowledge of the market and of my observation in the last couple of months we clearly have got the largest digital ecosystem of merchants. And technology providers in the dark space and clearly one of the largest players in Europe as well which is focused in this area so this is like a super strong foundation for us. And moving forward our plan and the bishopness from one side to definitely sustain this foundation and strengthen this. In the markets where we are already present but in parallel also of course expand further our presence into the wider and immediate territories so we have got many new countries and ideas to come and I would suggest the community to stay tuned on that. Of course another important dimension for us is definitely the expansion and growth in the US which is like a strategic project for the company and with the super strong attention from both Stefan and Sebastian and of course also our investors. Last but not least I think it's clear that we are fully committed to stay visionary and make sure that we are always at the forefront of Ecommerce innovation and here I would say that our my peer in the executive team Mark Stanley and our CTO is doing a fantastic job. Together with his guys in really bringing on a regular basis. The most recent innovation is in the ecommerce space into the Shopware product and into the Shopware community.

 

Kasia

That sounds interesting I Guess you can't say more in.

 

Alexey

You will as soon as there are some more detailed questions either from you or from some of the listeners I am always open to to respond to them. You can find me easily on Linkedin or wherever else so happy to discuss in further detail. Anybody who's interested.

 

Kasia

That's great info for our listeners. So thank you for that and guys you can reach Alexey on Linkedin and ask him direct questions. There is an increasing importance of cloud regarding technology and regarding Shopware paths and Saas in the ecommerce industry. How does shopware approach and leverage these technologies from your experience because it's a really important topic regarding e-commerce, our customers and agencies.

 

Alexey

Yeah, thank you for the great question. First of all it's important I think to highlight that. Definitely we are similar to other providers on the market. We have got the cloud first strategy from commercial product and ecosystem perspectives. So we make our various cloud offerings more and more attractive to the merchants and to the agencies and all of our let's say innovation and product investment is going first and foremost into the cloud offerings which we bring to the table. What I think really makes us stand a part compared to the other players on the market. The competitors of ours and the good friends as well. It's definitely the variety of cloud options which we are bringing into play for different use cases and for different levels of complexity of our merchants. So while other players will be highlighting which ones but I think it's clear right. Sometimes focusing on purely single tenant paas offerings and this obviously makes the total cost of ownership for many of their target customers quite high and to be honest, not always effective or quite often. Not effective right. In comparison also to purely multitenant Saas players and there are many of those we are actually providing best of both worlds. So yes, for different use cases we can propose both the paas approach and the multitenant Saas approach. It always depends on the customer, on what the merchant and what the agency is willing to achieve with our platform, with our technology and to make sure that we out of our portfolio of Cloud offerings find the right fit and the most effective motion for them.To optimize the TCO and to achieve the goals of the business which they have got.

 

Kasia

May you agree with the sentence that Saas is the future of e-commerce.

 

Alexey

As I outlined I do strongly believe it depends on the use case if there is no let's say one size fits all right if it would have been the case there would not have been so many different commerce providers on the markets. So yes, Saas is a very effective and good move for the companies who have got pretty let's say commoditized business. From the Ecommerce perspective. So if you have got a limited assortment of products if you have got like 1 country of presence and you have got okay even higher volumes of operations, Saas is a good option for you because actually all of your Ecommerce processes are pretty straightforward and they're similar to many other players you have got but together with that if you have got multiple business models in place if you are present on multiple international markets, if you are combining both products and services, and you have got a large product catalog, and you have got different types of bundles and so on, then I'm not sure that Saas is the way. This is more likely to happen. The Paas option is more attractive and more feasible for these types of complex merchants and complex business models. I think exactly the beauty of Shopware is that we are not saying that here is your like 1 size fits all, your merchant sticks to this and there is no left and right, and there is no opinion from your site. But we really provide the options and really can accommodate the different specifics of our merchants.

 

Kasia

Yeah, and from my point of view it all also depends on costs and a budget because this is also very important right?

 

Alexey

Yeah, definitely look as discussed of course like from a cost perspective Saas would always be the best way to go. If you do the TCO calculation, you need to understand what flexibility you need to enable. And you need to understand what fluctuations from the standard Saas offering you potentially need for your business and if you really need to do your specific extensions and if you really need to tailor the approach to different markets and so on, you just need to do the proper evaluation. Otherwise you can end up with multiple Saas providers which are not integrated with each other and you have got a lot of headaches where agencies can of course help you but will be cost effective I would doubt it.

Kasia

Yeah, I definitely agree with that. Regarding pricing in Shopware was a hot topic in the ecommerce community since the release of the new approach. How do you perceive the change especially as someone relatively new to Shopware? How will this change help customers and the agencies?

Alexey

Our new approach to pricing is definitely strongly linked. First of all to the business outcomes which we are driving for the customers and of course it has the cloud first focus as I mentioned also earlier right. We have desperation and the targets to provide our merchants with the best end-to-end shop offering including different scopes of Shopware capabilities hosting devops, responsibility abilities and customer support. So we actually aim to make the lives better of our merchants.Frank has spoken also of our agencies easier and more straight forward by securing this one stop shop service from our side and the super attractive issue and as you mentioned I'm new to the Shopware community but believe me I know the offers and the proposals of other players on this market. The reality is that what we have got in play from price and perspective right now in comparison to the capabilities and the technology innovation which we are bringing into the table is the most effective and the most attractive offering if you look into this. If you don't forget some elements of your TCO when you do the calculations exactly and not only external investment but also the internal one.

Kasia

That's a very important thing to calculate the investment properly.

Alexey

Merchants have got a special treatment for the external costs they are carrying but kind of forget that the internal resources also cost them money.

 

Kasia

That's the really popular thing in companies. So thank you for mentioning that. You mentioned that you are bringing to the table a really big thing regarding technology. So in case of that Composable Commerce is gaining traction in the Industry. How do you see this concept in relation to Shopware? Is this the right direction?

 

Alexey

Well yeah, first of all for sure. Composability is the topic in the last few years I would say right and out of my impression. There is a bit of hype on that as well on the market. Again down to the question of like 1 size fits all. So from our perspective when you think about composable architectures. You really need to keep in mind the size and scale of your ecommerce business, your operating and properly balanced sales and your composable approach. So. If you are like a fortune 500 millions company and with the hundreds of team members in your I department substantial online revenues of hundred million Euro and above, multiple different business models, international presences and complex requirements and sophisticated catalogs and so on and so forth. Most likely the approach to composability. For example, our friends and colleagues from the market from Mach are promoting this makes sense for you. Then you can allow yourself to have a dedicated system for ecommerce, a dedicated system for order management and dedicated one for search, for pricing, for promo, for loyalty, frontend and so on. You name it then you have got like I don't know 7 to 10 vendors in your ecommerce landscape. You have got various integration partners who know the technology but don't know each other. Supported by various internal technical teams. If you can allow this and if your business freely needs this then it can be the way. If you are a mid market player and a mid market is clearly our focus at Shopware and cannot allow all of these complexity and you don't have hundreds of people in your department and you don't want to recruit I don't know a few 5 to 7 different integration partners agencies specialize in this other the technology probably you better follow a more opinionated approach with a limited set of composable elements exactly where you need those. To make sure that you actually can achieve the effective TCO and what is probably even more important for the businesses nowadays is quick time to market and that's exactly what we bring into play together with our technology partners and this is our focus area. This is where we see our strength and I would say that out of an already recent observation for me specifically in the last months right it has more and more importance for than customers, for the merchants because many of them jumped onto this composable hype in the good times when ecommerce was going like this as we all know during Covid and now that they figured out that actually this fantastic and massive growth is kind of slowing down from one side to the other side. The overall economic situation in different markets is not as positive as it used to be. They understand that the stacks they kind of created with a super decomposed approach are probably TCO-heavy and then they need to find a way to optimize it and we have got quite a few conversations with the merchants and actually across Emea going exactly in this direction.

Kasia

Regarding that because you said something about customer support and that you are supporting agencies.I would like to jump into topic related to Shopware 5, and that you announced the end of support of Shopware 5 in 2024 so it's the next year. As there are still around 32000 shops using Shopware 5 so it's a huge amount of shops still. What plans does the company have to help customers with the migration process?

Alexey

Great question and definitely this migration process is super important for us and we have got a strong focus on making sure that we support both agencies and the merchants the best from this perspective. What I think is important to highlight is that the as everybody knows this migration program was kicked off early earlier this year and so far we are seeing a fantastic momentum and a super strong interest from the community of our merchants to move to Shopware 6, and there is a special attractive migration offering from Shopware 5. For Shopware 5 customers again I think which is pretty visible to the market and in terms of helping both merchants and our agencies in this process we continue to run enablement sessions for both of the segments, for both of the audiences. This shows quite a strong efficiency helping the ecosystem to get up to speed and guiding them within the process together with that specifically for larger merchants with more complex and kind of tailor made Shopware 5 installations. We also established a dedicated Shopware consultancy Services Team who can provide advice both to the merchants and to our partners, to the agencies on what is the best and most effective way to tackle this migration and to make it as efficient as possible. So they have pre-identified packages. Regards to helping the merchants together with the agencies evaluate the readiness of the migration and also give guidance of what is the best path to do so.

 

Kasia

So you are open to help them first of all and you have special pricing for migration. You are open to help all agencies and customers. That's very important because from my point of view when I was working on a project with Shopware we were really happy because Shopware was helping us. With all features and and everything. So from my experience Shopware support is very helpful or regarding support So I hope that everyone who are still on Shopware 5 will have the same support I had once.

 

Alexey

Definitely a very good observation from your site. Thank you and I think together with that is even more important and really cool to highlight is that it's not only about our internal team. It's strongly about the community. So as you know we have got dedicated select channels and dedicated groups where the expertise around Shopware across Emea is concentrated. This is like a super active community where you can actually solve and clarify many of the questions which you have got in place and you can also get the experience of sharing more and more. We are also actively promoting this of course with the larger companies and with the larger brands which are in our portfolio.

Kasia

What advice do you have for smaller agencies that used to implement small shops? Is cloud a solution for small agencies or or it's not for them?.

Alexey

I definitely believe that it makes perfect sense for the smaller agencies to really focus on the Multitenant Cloud Saas offering which we have got and to promote it together with us to be able to iterate quickly with their target customers and provide them. With the most effective from Cost-effective ecommerce platform on the market specifically with this in mind we recently launched the Express launch package how we called it based on our multitenant Saas offering which has now been adopted by quite a number of agencies across Emea. With exactly the idea in mind to have like a super packaged proposition for the smaller merchants and help them really iterate quickly and achieve the result quickly which they need for their business. On this topic again the shout out to the agencies listening to this podcast if you have got questions with regards to the Express launch package and the way how we see it and how we can bring it to market together. Please don't be shy, feel free to reach out to myself and my alliances team.

Kasia

That's really great. I hope that you will have many questions because I know from the community that people are interested in the product and in this approach. With the current crisis and the recession affecting markets, in the US and Germany, are there any visible impacts in the ecommerce sector from the vendor perspective and it changes on the market how you see this?

Alexey

Look as always as with everything in life. There are, let's say, positive sides to everything and there are negative elements. So I think what is a great use for the US is that we see a lot more positivity if we can say so from this perspective. The reason why is simple so our focus has historically been and what I also mentioned previously on the cost effective on cost effectiveness and the nonreactive TCO and as I mentioned out of my observation of my personal analysis after many years in the industry we have got the most attractive offering on the market. So for us, it's actually quite positive news that we have got merchants from quite a few of our competitors coming over to us and saying that look you know what we're looking for the path to make it more efficient in terms of the cost and in terms of the TCO, in terms of what is automated within the tool, which is even more important with the AI revolution. We have gotten in place and can you help us out and this is exactly our sweet spot so has always been our focus. And that's how we can help the merchants and that's how it is the positive use for us on the kind of the realistic and the downside together with that of course it is clear that any single company nowadays. Thinking about platforming and thinking about overall moving forward will of course think twice or probably win 3 times before they do that and they need first to make this decision to make it happen. They clearly need to have a clear business case internally which they can prove to their CFO. Which they can prove to their leadership team, so the sales processes themselves can take more time but that's kind of the reality of any downturn period in the economy and we are well equipped for that with the team and also with our consulting services organization which I mentioned earlier.

 

Kasia

Thank you for that. We mentioned before that we have hype on composable commerce. But I guess we have higher hype on AI, and this is the buzzword, and everywhere we can see AI and, and using Ai based tools. And this is crucial in the ecommerce landscape as an industry. What AI related features Shopware 6 offers, what are the plans for the future? How this AI will change the platform and the ecosystem because I guess our listeners are very curious about this.

 

Alexey

First of all I think in general I would say I'm super positive around this hype in the AI space because specifically as we just discussed in your previous question with a bit of a downturn. Not a bit but the downturn in the economy. Companies and businesses across any industry need to find ways and need to find paths to become more efficient. And how this is important not only for the ecommerce area but this is important across the board for any type of the function inside of the company. So this is what we are exploring ourselves internally for our own business and this is what we also bring and innovate into the ecosystem. So when we speak about what exactly we from a product perspective are doing in the AI space I think here we clearly prove the visionary play of ours and thanks to Stefan’s and Sebastian's innovative leadership and the fantastic work of our product team. We were actually the first ones who embedded the AI features into the software platform earlier this year. Today we have got 8 precise operational use cases inside of Shopware 6 commercial plans allowing our merchants to substantially raise their efficiency based on our estimates and bursting based on the first cases we see by sixty eighty percent depending on the area of the ecommerce operations. Which I believe is super appealing and super attractive and this is what every single merchant today needs to explore and needs to have on his or her table and the use cases we already implemented are the following like first of all, these are the product review summaries allowing the end customers of our merchants to really have a quick conclusion and aggregated feedback on the product they are considering. So this is 1 interesting feature I would highlight, then the AI generated product properties which is definitely as we all understand on this call as people specialize in ecommerce is super important. To strengthen your search and other capabilities within the ecommerce operations. Generated product descriptions dramatically decrease the efforts for the content teams of our merchants and again it's all down to the efficiency and quite a few more, and we're going to continue to innovate in this area and we have more use cases to come within the next year and within this year and early next year right so stay tuned on the topic. If you want to become cost effective and if you do want to use the AI features in your ecommerce operations I think we are the right address.

 

Kasia

Those features you mentioned are very important, especially AI generated product descriptions because if you have poor description you have a high return rate for example. And it's really important for a business to have a proper product description. Product review summaries are also crucial from my point of view. Thank you for highlighting this and we will wait for more. Looking ahead to 2024, so next year of course what do you envision for Shopware and yourself? How do you see both evolving in the coming year?

 

Alexey

Interesting question. I would love to have the crystal ball and all the details but so far we can only discuss the plans. We definitely have got a lot of plans and ideas for 2024 and beyond which we're actively discussing within Shopware as the executive team. First of all, as mentioned earlier, product is key for us and innovating in the product space. Bringing in more and more interesting new capabilities to our merchants and to the agencies is on top of our agenda. So we definitely want to sustain and improve even further our visionary leadership which we have got in place. Secondly, of course we put a lot of focus on growth ambitions on internationalization and we'll continue to expand into the new geographies so stay tuned. The agencies from across Emea if you are interested to be active with the Shopware technology in your geography, in your home market, in your home country. We are always open for discussion and to find the right model of collaboration for us. For me personally the last seventy days or how much is it by now probably a little bit more as part of the Shopware community. We're just really fantastic. I learned a lot and I met a lot of people and a lot of interesting projects and the initiatives within the Shopware ecosystem and the community space and I'm looking forward to getting to know even more and more people and experts within the community in the coming months to join forces and to actually contribute to our joint success to make Shopware even stronger.

 

Kasia

Alexey I'm really happy to have the opportunity to talk with you today. Thank you for joining us and sharing with us your experience and all your answers. Interesting answers. Thank you for joining me and I hope to see you soon.

Alexey

Thanks a lot for having me. It was a great exchange and conversation and I'm looking forward to the next meetings. Thank you.