Ecommerce executives manage their own companies. But they are also experienced observers of online retailing in general. It’s in the latter capacity that we recently spoke with Rick Wilson. He’s president of Miva Merchant, the hosted shopping cart. He’s also a 12-year veteran of ecommerce. We asked him about the state of ecommerce, including the current topics of eBay’s recent acquisitions, mobile commerce and — what else? — Facebook.
PEC: For our conversation today, we’re speaking with you as an observer of the ecommerce scene. To start, what is the state of ecommerce?
Wilson: “The state of ecommerce actually is thriving and — as someone who’s been involved in ecommerce for 12 going on 13 years now — it’s nice to be the pretty girl at the dance again, if you will. I came to Miva in 1999 and immediately after I did, I was drawn to this idea of enabling business for entrepreneurs on the web and it’s turned into a great career for me personally. It’s been a great ride here at Miva Merchant.
“Now, we see a lot of changes and part of it is social. I mean some of this stuff I’m sure we’ll talk about, part of it is social, some of it is mobile. But for whatever reason, there is now a huge focus back in the ecommerce space that I haven’t seen since 1999.”
PEC: Since 1999, what are the biggest changes you’ve seen in the business? Social media and mobile commerce, maybe?
Wilson: “Actually, there are other changes that I consider far more significant to the bottom line of most of our merchants than social and mobile. The stuff that’s really amazing to me is the use of data [for predictive analysis].
“The things we see with analytics today are far more interesting, the ability to look at how someone’s behaving in your site and predict if they’re going to buy, if you want to alter the offer you’re going to make them, if you want to alter the products you’re going to show them. There is an incredible amount of data available now in lots of companies. I think we’re at the tip of the iceberg exploiting that data. Sure, Amazon’s been doing some of that stuff for maybe a decade. But we’re really seeing these things we brought down to the level of someone doing $50,000, $100,000 to $1 million a year in income and being able to afford it.”
PEC: Anything sinister about the use of that data?
Wilson: “I can surely imagine some sinister things. But, most of it [the data] is not personally identifiable. So, it’s a fine line there, which is they don’t know that you’re coming to a website, but what they do know is that you are a however-old male, living wherever you live, and that you happen to be on a clothing site and that the last 30 days, you’ve been to a lot of clothing sites and you haven’t bought once. Or, in the last 30 days you’ve been to four clothing sites and you’ve bought at every one of them. Certainly, the use of that data to a merchant’s benefit — not necessarily a consumer’s — I think we’ll see some changes legally and otherwise about how that data gets used and collected. But at the end of the day, I’m not sure you can put the genie back in the bottle.”
PEC: Let’s ask your views on some current ecommerce topics. eBay has been active on the acquisition front. It purchased GSI Commerce, a platform for larger retailers, and more recently Magento, the open source platform. What’s eBay up to?
Wilson: “Let’s start with what they’re saying publicly. They’re trying to build an ecommerce platform for the future, and I think they’re viewing GSI Commerce as a platform for really large merchants, really about fulfillment customer service. I mean GSI Commerce was a merchant-of-record model, where they could be doing fulfillment, answering the phone. They could be doing everything for Sears — I don’t actually think Sears is a client — but it’s all on Sears.com. Magento I think they view as more of an actual platform, where GSI Commerce was usually custom integration. They’ve also bought RedLaser, the [mobile] app for scanning barcodes for comparison shopping, and they’ve been buying a lot of things. I think their goal is to build this comprehensive omnibus platform of the future that combines all the hot-button items. So, everything you would need to do an ecommerce business including local search, online to offline, potentially mobile and social. That’s what I think their goal is.”
PEC: Where does that leave ProStores, eBay’s hosted platform?
Wilson: “My best guess is they’re going to do one of two things with ProStores. One is they’re just going to let it sit there until it’s dead, which is what I actually guess. That’s my gut feeling. Their other option is to try to migrate those customers to, say, Magento in the SaaS platform. That I think would be no different than the outcome of the first one: They would both end up dead. I think the outcome of that would be very painful. There would be a lot of resources put into that. Migrating ecommerce customers, en masse from one platform to another, is something akin to torture. So I’m not sure they want to go down that path; but we’ll see. Either way, ProStores is not where they’re betting on their future.”
PEC: Let’s switch gears. What’s the outlook for Facebook? The Economist magazine recently surmised that Facebook’s growth has peaked.
Wilson: “It’s interesting. There’s no such thing as indefinite growth and there’s no such thing as infinite growth. What do they have, 600 or 700 million users around the world? That’s a big number no matter how you slice it. So, the outlook for Facebook on the whole is I think they have enough usage base and they have the social graph data. I forget where I read this, but someone not too long ago compared their control of the social graph to Microsoft’s control of the desktop. I generally agree with that at a high level, in that I think Facebook’s not going anywhere. I think that they are the social graph keeper of record. I don’t see Google changing that unless Facebook does something bizarre like let people download everything and someone else can go mimic their social graph and literally take control out of their hands. I don’t foresee that happening.
“When it comes to ecommerce, I think that it’s a lot different. A couple of years ago during the ascension of Facebook, you would hear people talk about how there’s not going to be a need for websites anymore. Everything is going to go through Facebook. My take is that’s silly. Facebook is a supplemental platform. Let’s think about what Facebook really is. Facebook is the world’s largest photo-sharing platform. Facebook is also a place for status updates like Twitter. Finally it’s a place to play games like Zynga. And if you think about how you use it or I use it, I would say that’s about right.
“There are some opportunities of using Facebook as an online merchant to really lower your advertising cost and do some crowd sourcing and leverage your community in ways that are absolutely brilliant. I don’t foresee a day though when your website is just, for example, Facebook.com/mycompany and people are actually transacting through Facebook directly as a primary means of transaction. One of the reasons for that is Facebook’s model with the digital publishers like Zynga is to take 30 percent. In the physical goods world, that just doesn’t work. There’s no 30 percent to take. So, I don’t foresee that. I think The Economist is probably correct in that I think in some senses, their ascension has leveled. If you leverage Facebook properly, it’s a great tool. But I don’t foresee a day when it’s going to actually gobble up the entire web.”
PEC: Let’s move on to mobile. To date, there has not been a lot of physical goods being actually transacted on small smartphone screens and, moreover, the conversion rate on those small screens is extremely low, at best. What do you tell Miva Merchant’s customers about mobile?
Wilson: “I see mobile as fundamentally different than Facebook. And the reason I even compare them is because both became such popular things at the same time. Mobile is something that needs to be addressed. It is not something that’s going to go away, because ultimately you’re going to have more people interacting in a connected way via mobile phones. So, what we tell customers is, ‘Here’s what you can do today.’ We tell most of our customers that the mobile web is their focus as opposed to mobile app. The reason for that is our customers generally aren’t Coca Cola. Sure, if you’re Coca Cola, you can get millions of people to download your app. You can provide a free incentive and just get huge app downloads. If you’re a more traditional [smaller] merchant, mobile is a different strategy for you.
“Going back to eBay, I mentioned RedLaser earlier, which is another company eBay bought. With RedLaser I can take my iPhone and I can go scan a barcode and I can see every place that that product is available online, and to some extent offline. If I scan a product or take a picture of a product from my iPhone, and RedLaser pulls up search results for me, and I clicked through. Not a lot of merchants necessarily know they’re even in this search result. For example, if your data feed gets to TheFind.com [the comparison product site], that company pushes stuff into RedLaser. So, you may not know that your data feed is getting into a mobile search device, but it is and if someone clicks through that data feed on a mobile device and they get a full-sized web page, with checkouts not optimized for mobile, the odds of that conversion happening at that moment are very small. Maybe they email themselves the link. Maybe they just save it and type it into their browser, or probably more likely they’re not going to do anything. They’ll go find one that is mobile-optimized.
“When I think about how I use mobile commerce — which has been so far limited to eBay and Amazon — it’s very simple. For eBay, it’s to bid on things; it’s not to be tied to my computer at the end of an auction. I think that’s a fundamentally unique model for eBay. Most products we buy online don’t have a time issue. The eBay app on my iPhone makes perfect sense. I don’t have to worry about where I’m going to be if I want to make sure I bid five minutes before the auction ends.
“Amazon is sort of similar in that what I generally order from Amazon, because I’m an Amazon Prime member, are commodity items. I’m out and I remember I need some shampoo or I need whatever, and as opposed to having to run to a salon or any store and take time to do it, if it’s commodity that I’m not urgently needing, I can just hit my phone, search for the product name and two days later, it’s at my door for free. So, those two models are really unique in mobile.
“They’re very successful for their respective companies, but they don’t really apply to our customers. Our customers need to look at it as making sure the person who finds their stores via search results or location-based apps, if they’re looking from a small screen and they’re getting instructions to that customer if they want their customer to stay. So, for the most part, we tell our customers if you’re looking at your analytics reports and you’re seeing a lot of mobile traffic, adjust your strategy from there.”
PEC: Does Miva Merchant have plans for a mobile offering?
Wilson: “We have a mobile offering out now. It’s been out for about four months. Currently, it’s an add-on. It’s something we charge for, but we also taught how to do it at our conference for free. So, it’s something that if someone is technically capable, they don’t need us to do. But if a merchant is not a web developer and they just want to hand it over and get it done, it’s something we sell for a few hundred bucks. In the future though, we will build it into the core product as something that’s just automatically included in every store.
“The reason we did it that way was we have a professional services group that I like to call our research kitchen. We had very large customers coming to us and needed mobile, so we built it for them and we looked at that and said, ‘You know, this is the right way for us to do mobile. Let’s let the early adopters get it now and see how they use it and let that run for a few months and then come back.'”
PEC: You’ve released a new upgrade to Miva Merchant. Tell us about that briefly.
Wilson: “We launched what we call Miva Merchant 5.5 PR8 about two weeks ago and it’s the next generation of our platform. It’s a streaming update for all of our current customers so it’s not the kind of thing that requires a new store build. In fact, it doesn’t break their store; they go right up to it. There’s a bunch of new features. They make order management behind the scenes easier. But the big tent pole features are reporting: very advanced sales reporting, and a reporting API, so not only the reports we built, but an API to make it easy to build the reports yourself.
“Then another big feature we added was a very robust multiple image machine. This is really on the design side of your site. We’ve always supported multiple images because you have full control of the templates and the layout. But now we’ve taken that and made it much easier for the layman so they can literally drag and drop their images into our admin and you can add an unlimited number of images per product and the products are tied to attributes, to swatches, so if I have a visual image of a product option, I can click it and it will update all the multiple images.”