Magento braces for next decade of e-commerce
In early November Magento Commerce officially became an independent company, after eBay sold the division to global investment firm, Permira.
Mark Lavelle, formerly the senior vice president at eBay Enterprise, was appointed Magento’s new CEO and was in Australia last week for the company’s conference, MagentoLive.
Having been spun off by eBay, Lavelle said the next six months will involve getting the company on its own footing and reconstituting the parts of the business that Magento relied on eBay for, as well as getting back into the market talking to customers and its partners.
“We are very solid on the product and technology side and we shared a lot of resources on legal, finance, and sales and marketing with the greater eBay business,” Lavelle said.
“So now we are reconstituting that. Getting the leaders in the right place to drive the company is kind of the next objective. And then it’s just about hitting our goals, our growth goals, our financial targets, that’s what the year will shape up to be.”
Lavelle said strategically Magento was in a very good place before splitting with eBay. That direction is set to continue.
Magento’s strategy was in the spotlight last week during MagentoLive in Sydney, when the company announced the launch of its next generation open source e-commerce platform, Magento 2.0, described as, “a significant re-architecture of the industry’s leading digital commerce platform.”
“The types of things that were created for the first decade of e-commerce just aren’t well-suited for what’s happening now,” Lavelle said.
“So, way back three years ago our plan was to arrive at a place where we can say what we just said on stage, which is, ‘Magento is a digital omnichannel commerce platform that allows for merchants to engage their consumer, no matter where they are’.
“Doing it in the context of eBay would have been fine. Doing it as a private, separate company just allows us to focus more.”
Magento 2.0 promises retailers open-source flexibility of the software that is still enterprise grade.
“The leadership position we have — and we aim to keep — is that combination of enterprise readiness and open-source flexibility. It’s pretty unique,” Lavelle said.
The next decade of e-commerce
The next decade of e-commerce will be characterised by retailers knowing customers better than they know themselves, Lavelle said.
“I really think we are going to move beyond the structural inhibitors of engaging the customer and really the game at that point is going to be what I call ‘anticipatory commerce’, for lack of a better word.
“It’s knowing that customer so well, that you’re actually providing things to him or her before we might even realise what we want.”
For example, Lavelle pointed to the evolution of subscription services, which today send consumers things they didn’t know they would like— such as fashion box subscription service Trunk Club— or your fridge automatically re-ordering milk when it runs out.
“Those things that were way out there before, in the next 10 years that’s what this platform is going to be able to do,” he said.
Lavelle said he remembers a decade ago, when the industry worried about how much effort and investment was going into e-commerce, while online sales were only in the single digits as a percentage of total sales.
“Today you don’t here that at all. Why? Because regardless of where the checkout happens, the internet and technology are influencing the majority of our purchase decisions and that’s hard to tease out.”
Lavelle said he believed the overall percentage of online spend would continue to head upwards, but that number will become less relevant as sales channels continue to converge.