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The forgotten mid-market? How Shopware is filling a much-needed gap

The forgotten mid-market? How Shopware is filling a much-needed gap

A few weeks ago, we brought together a group of more than 100 Shopware partners in Chicago for a day of learning, idea-sharing, and community-building. We put together a few observations from our first Shopware Partner Day, including some insights from partners at Above the Fray, Unleashed Technologies, and Web Solutions NYC.

You might not have noticed it, but there’s been a significant shift in ecommerce over the past seven years. Big tech companies are overlooking an entire “mid-market” segment.

It wasn’t always this way. Since 2017, if you had a successful but still-growing shop, there were platforms available: Solutions like Magento, Hybris, and Demandware were options for the mid-market players. However, over time, larger companies have bought out these solutions. 

Bigger companies like Adobe swooped in, taking over Magento for $1.68 billion (1). Oracle and IBM could buy mid-market options and pull them “upmarket,” tailoring their solutions for larger-scale enterprises. However, the results were higher costs and increased complexity. Mid-market merchants became an afterthought.

Now there’s a glaring divide in the market. Platforms like Shopify work for new shops and small businesses. Then there’s a giant gap until you reach the enterprise-class solutions. 

But what if you’re in the mid-market? What if you have an established shop and need to scale it? What if you don’t have the budget for major enterprise offerings from the big tech companies? The answer is easy for about 50% of ecommerce businesses without a big budget. They settle for suboptimal SMB solutions or overinvest in big-scale platforms. 

Today, there’s a “Goldilocks” option to consider: Shopware.

(Keep reading below the images!)

How Shopware fills the gap for mid-market ecommerce businesses

Is mid-market ecommerce a wasteland? Some people, like analyst Rick Watson, writing about mid-market ecommerce platforms, seem to think so. You’d think with ecommerce being projected to reach over $1 trillion in value in the U.S. by 2025, there would be more mid-market solutions available (2).

But that’s not how merchants feel. Mid-market shops are dissatisfied with the current platforms. The mid-market is a big range, after all: these are companies with a gross merchandise value of $10 million to $250 million, and many companies fit into that category. These companies have all sorts of challenges, including:

  • Increasingly complex business structures

  • Increasingly diverse brand portfolios

  • Extensive (and growing) catalogs

  • A need to handle different omnichannel scenarios

The problem? The same merchants who are dissatisfied with their current options are also risk-averse. Changing platforms can be costly and time-consuming. As a result, many brands default to procrastination, and companies simply put off their platform upgrades. 

Christopher Carson, CRO at Above The Fray, says this is one key reason so many mid-market ecommerce merchants are behind the times.

Christopher Carson ATF at Shopware Partner Day

Merchants can’t afford to do nothing. Mid-market or not, every merchant competes with other merchants—some of whom may be much larger. Given this competition, the digital vendor experience you offer customers is paramount. Data echoes this, too: A recent McKinsey study noted that over 70% of B2B ecommerce software buyers believe this experience is as critical as your product’s price (3).

Mid-market merchants also face challenges beyond these basic capabilities. When competitors use big-time tech solutions for a better customer experience, overpaying for an enterprise-scale solution can be tempting. 

The solution to the mid-market gap

There is a potential “Goldilocks” option: Shopware. Shopware offers a suite of B2B, omnichannel, and headless commerce solutions perfect for mid-market merchants. 

Or, as Yitz Lieblich, CEO/Founder of Web Solutions NYC, recently put it:

Yitz Lieblich Web Solutions at Shopware Partner Day 2014

Lieblich says Shopware offers the ease of use of Shopify, combining it with the scaling power of Magento. There’s your Goldilocks solution. Shopware is accessible to growing companies, yet capable of handling growth throughout the mid-market. And with core functionalities like B2B capabilities, subscriptions, and digital sales rooms—no mid-market merchant gets boxed out of tools they want and need.

Even better, Shopware doesn’t share the pitfalls of cheap cookie-cutter solutions, as Shopware President and GM Jason Nyhus noted at the Talk Commerce Podcast (listen here). As Nyhus said, companies often put their profit motives ahead of the success of individual stores. 

But there’s nothing cookie-cutter about Shopware.

Serving the forgotten mid-market

Let’s zoom in. Given the dearth of available options, what does a good mid-market solution look like these days? If you ask us, a technology needs the following if it’s going to serve the mid-market effectively:

  • Excellent distribution. Open-source technology, for example, makes it possible to roll out a service with the flexibility to handle growing companies. Shopware’s offerings include an open, headless commerce platform on Symfony and Vue.js. A large community of developers and merchants can use this platform to expand their offerings.

  • Profitability. Profitability comes from meaningful revenue streams, yes. But it also comes from unlocking potential partnerships with the platforms you use. More on that in a bit.

  • Growth and scalability. Your platform should be able to grow with your business. However, it should also offer opportunities for scale you hadn’t considered, such as exploring revenue streams like training and certifications related to your business.

Shopware meets all three criteria. It offers technology and innovation to merchants without demanding enterprise-scale budgets to pull it all together.

“Big enterprises tend to be huge, moving very slow,” said Lieblich. “But the startups with cheap, affordable, cookie-cutter platforms aren’t always appropriate, either. “You really need that mid-market.” 

Christopher Carson agrees: mid-market companies need turnkey solutions with scalability for growth. According to Carson, a platform should be simple to unlock. However, it should still offer flexible solutions that grow with the business.

“Shopware represents the ease of a turnkey solution like you would get from SaaS platforms,” says Carson. “[But] with much more upside and scalability for customization to bend [the platform] to how you need it to work for your business, rather than the other way around.”

Shopware’s features also cater to a mid-market need: B2B sales. For example, pricing differentiation for big-business sales is a must-have feature if you’re a growing company selling your products to other businesses. Shopware also offers the ability to publish tailored content for different customer segments.

As Dustin Hickle and Beata Mercier of Unleashed Technologies recently noted, people appreciate these features.

Dustin and Beata of Unleashed

Custom-tailoring content for specific customer segments can feel like a big-time enterprise-grade solution. Yet with Shopware, those same features are available to mid-market merchants.

Strengthening partnerships for the mid-market class

Few mid-market companies can tackle their growth alone. To scale their offerings and compete with big-company technology, they’ll need partners. 

With Shopware, natural partnerships are already built in. Shopware’s open-source approach creates a network effect of agencies, technology partners, and open-source contributors who use the platform.

Building technology partnerships is particularly important for mid-market merchants. These companies often need to leverage tech partnerships to achieve the scalability of larger companies.

For example, Christopher Carson’s company, Above the Fray, is looking to collaborate with Shopware on several features. Carson hopes for co-branded assets, webinars, and events. “Shopware’s engagement with agencies is becoming the gold standard of the United States,” says Carson.

The crew over at Unleashed sees it the same way. Unleashed sees Shopware as a potential solution for serving its mid-market clients better. It’s especially focused on merchants looking to transition to more advanced ecommerce platforms.

"When we heard about Shopware…we knew this was the tool we've been looking for,” says Beata Mercier.

Hickle agrees. “I think there’s more appetite than there ever has been for a solution like Shopware, especially in the Midwest and the flyover states where the bulk of our business is.”

Building momentum with Shopware

Think of Shopware as a momentum-builder. And it’s building momentum in more than one way:

Helping merchants build momentum

For starters, Shopware’s turnkey offerings for growing merchants offer easy-access features. A mid-sized ecommerce company may need omnichannel customer experiences to compete with the big-time merchants in their industry. Shopware’s pooled customer data and synchronized stock features keep the shopping experience consistent for customers—even if they’re browsing through multiple channels. Merchants using cookie-cutter offerings might not have features this robust.

Shopware also helps these merchants take advantage of their growth. For example, Shopware’s ecommerce automation includes automated email campaigns and seasonal promotions. You can also automate upselling and cross-selling with personalized recommendations for your customers. From the customer’s perspective, very little differentiates your customer experience from a premium shopping experience at a big chain. Your personalization and automation features will be just as robust.

Finding momentum in the U.S. market

Shopware is also building its momentum in the U.S. market. It’s not often that mid-market ecommerce companies can find turnkey solutions with the capacity to offer scalability and customization.

According to Carson, the ease of starting with Shopware is contributing to that momentum. Carson sees Shopware as offering the ease of a SaaS platform, but with enterprise-quality features you can’t find elsewhere.

Shopware Codie PHP

That’s why Carson says he’s sending team members to Shopware events. He sees opportunities for further training and partnership development at these events. 

How does Shopware see it? There should be changes in 2024, especially with the possibility of an oversaturation of vendors in the ecommerce market. 

Some platforms, unable to offer mid-market-friendly features, may struggle. Some may attempt to serve both large and small clients, for example. But in trying to do a little of everything, there’s the danger of offering too little to the mid-market. As a result, their merchant clients may feel tempted to churn platforms until they find the “Goldilocks” solution they’re after.

That could create more momentum in Shopware’s approach: a mid-market solution that makes scaling and partnership much easier. It’s especially useful given the underserved sector of mid-market merchants. 

Where the mid-market goes from here

We traditionally define the mid-market as those companies with a gross merchandise value of anywhere from $10 million to $250 million. That’s quite a large range for an underserved market. And if the ecommerce opportunities of the 2020s have told us anything, there will be more opportunities than ever for small ecommerce merchants to rise to this category.

In our future outlook, we see an industry where platforms may have to start paying attention to mid-market merchants. If platforms can’t keep up with the Adobes of the world, they may be forced to reposition to the mid-market. But there are problems here: there’s the potential for more churn and dissatisfaction as platforms stray from their ideal customer profiles.

We also see a change in the conversation. Shopware wants to force a broader conversation about the plight of mid-market merchants. Do companies offer agency support? App ecosystem dynamics? Do they cut out payment inefficiencies to make their offerings tenable for mid-market ecommerce companies?

Shopware thinks mid-market companies shouldn’t be an afterthought. If you’re doing things right, the enormous mid-market opportunity should be a platform’s focus. That’s why we’re looking to fill the gap in mid-market commerce and provide scalable solutions that other offerings simply can’t.

Request a free consultation with Shopware.


(1) https://www.magestore.com/blog/adobe-acquires-magento/

(2) https://www.linkedin.com/pulse/ecommerce-platform-exodus-how-shopware-seizing-adobes-peterson-3nrrc/

(3) https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-multiplier-effect-how-b2b-winners-grow

All photos by Julianna Pressley

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