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Technology ‘no longer a competitive advantage’ for online retailers

As the e-commerce industry matures technology is no longer enough to set retailers apart from their competition, says digital commerce veteran, Bob Schwartz.

Speaking with Internet Retailing in Melbourne last week, Schwartz said the industry is “moving to this next phase of e-commerce” where technologies are commodities, not a competitive advantage.

“[Technologies] are weapons and you desperately need those weapons, but they are commodities,” Schwartz said. “You need the best-in-class technological weapons to be competitive in the market, but they are not going to create a competitive advantage for you.”

Instead, competitive advantage will be gained by shifting focus to brand, product selection and service, he argued.

Schwartz was formerly the president of Magento (sold to eBay Inc) where he and the founders built the company into a global e-commerce technology platform. In the early days of e-commerce, he was hired by the CEO of Nordstrom to start and build into an industry leader.

“It sounds horrible from a guy who helped build Magento… but you need a good enough set of technologies and good enough site. You need not to interfere with your customer. Then all your energy should go into brand development, product development, service development and experience development.”

As the e-commerce industry matures a shift of thinking is required from industry veterans.

“We went through this very vertical build e-commerce stuff, now that it is all coming together under retail, I think we are now starting to learn to look at it differently and that’s why I say we need to learn to let go of our old way of thinking and start to have fresh eyes,” Schwartz said.

“We used to be the new guys, now we are the old guys because we’ve been at it so long. We are finding the new path which is all just retail, it’s all merchandising, it’s all about your customer.”

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