Salesforce Inc (CRM)

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Salesforce to Fuel Esprit's Digital Transformation Journey
By: Zacks Equity Research | October 11, 2019

salesforce (CRM) has been selected by fashion magnate Esprit to enhance its digital strategy for retailers and consumers.

Additionally, Esprit has partnered with salesforce Success Cloud advisory services to expedite its digital transformation.

Reportedly, salesforce’s Einstein and Marketing & Commerce Cloud will help Esprit to bring its ecommerce and marketing on a single AI-powered platform to deliver connected, intelligent and customized shopping experience. Moreover, retailers will get B2B-specific functionality for larger and complex purchases. The partnership is expected to boost Esprit’s digital revenues, which forms more than 27% of its total revenues currently.

The alliance, which leverages three of salesforce’s key offerings, is an important step for the company to boost its Subscription and Support segment as well as Professional Services & Other segment.

salesforce.com, inc. Revenue (TTM)


Retail industry is possibly the only industry to be most impacted by customer demand. Retailers are experimenting with various ways to respond to customer behavior trends and shopper expectations to digitally transform the retail experience.

Notably, per MuleSoft, about 82% of consumers believe organizations in sectors, including retail, fail to recognize preferences across touchpoints and provide relevant information on time. This indicates lack of improvement in customer experience, and is pushing consumers to consider new service providers.

Notably, salesforce recently introduced Lightning Order Management to connect and automate the entire commerce order process. This product combines commerce, fulfillment and customer service, enabling companies to provide smooth shopping experience to customers.

The company also recently announced Consumer Goods Cloud to improve retail execution capabilities of consumer goods companies and enable them to drive revenue growth and maximize return on investment.

Further, salesforce’s new partnership with Alibaba (BABA) to bring its Sales Cloud, Service Cloud, Commerce Cloud, and salesforce Platform to customers in China and Taiwan is making management optimistic.

Cloud-Based Solutions: Key Drivers

salesforce is benefiting from strong growth in its cloud-based solutions globally. The company is gaining traction from a robust demand environment as customers are undergoing a major digital transformation. Management mentioned that digitization is driving strategic relationships of the company. Its ability to provide an integrated solution for customers’ business problems is the key driver.

Its products like Trailhead and myTrailhead are helping companies through their transformation processes and increasing their business scale with modern technology.

The company believes that digital transformation will consistently offer a huge growth opportunity for the entire industry.

In June this year, in an interview to CNBC, salesforce’s CEO Mark Benioff said, “every company and every industry and every government [agency] is recreating themselves with their customer, so this is what’s driving our growth.”

In the last reported quarter, Sales Cloud revenues jumped 13% year over year to $1.13 billion. Revenues from Service Cloud, one of the company’s largest and the fastest-growing businesses, also rose 22% to $1.09 billion. Moreover, Marketing & Commerce Cloud revenues surged 36% to $616 million.

salesforce’s focus on building Customer 360 platform is also a key driver. salesforce Einstein in Customer 360 is boosting customer experience. The addition of AI capabilities like Einstein Translation, Einstein Vision and Einstein Voice to all salesforce applications is a tailwind. The company’s initiative in extending the power of Customer 360 with new services like salesforce Blockchain and salesforce Maps is also a positive.

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