There is nothing quite worse than having a famous older sibling, as Janet Jackson can readily attest. Janet Jackson is independently talented and a successful musician who has sold 160 million albums.
That’s slightly more than the Eagles (150 million) and slightly less than U2 (170 million).
But unfortunately for Janet Jackson, her brother was literally the King of Pop — and his lifetime albums sales are estimated at three quarters of a billion. The only artists who outsold Michael Jackson are Elvis and The Beatles.
So, in some sense, one could say that eBay Enterprise is the Janet Jackson of payments and commerce, to its “older brother” PayPal. Though both firms went their separate ways from eBay Inc. this year, the PayPal spinoff was scrutinized only slightly less closely than the Zapruder film, and the $925 million sale of the Enterprise business a month or later was greeted with a much more subdued reaction.
But according to Tobias Hartmann, president of the newly independent eBay Enterprise, being front and center is quite literally far from the firm’s new focus.
“The biggest difference [from the former eBay Enterprise] is obviously we are a standalone company,” Hartmann told MPD CEO Karen Webster in a recent interview. “Before, we were part of a huge corporation and we were the smallest part. Now, we aren’t the smallest third of a firm anymore; we are a big firm singularly focused on commerce operations’ technology-enabled services.”
And while that last phrase sounds complicated, it is really quite a simple idea: The new eBay Enterprise is by design a background player mainly and centrally concerned on “anything and everything that happens after the click,” for a retailer.
In its previous incarnation, eBay Enterprise played in storefront operations, including in the demand generation part of the retail storefront operations. But these days, Hartmann says, that has passed by the wayside in favor of a tighter core focus on technology.
“We are doubling down to create scale and more expertise,” Hartmann told Webster.
Because behind the click, though not visible to most consumers, says Hartmann, is the basic do or die ground for a lot of retailers. If commerce were an iceberg, the part that happens in-store or on customer-facing landing pages is something like the part one can see bobbing above the surface of the ocean. Impressive to be sure, but actually only a fraction of what’s really going on beneath the surface to get goods delivered to the right customer at the right time.
“As services are becoming more digital, a lot will happen after the click and in a lot of different directions. That is both an opportunity and a challenge, because there is a lot of room for differentiation there. Whether it is payments acceptance, or order routing, or merchandising, packing, shipping, customer services — that is all the stuff that we consider what happens ‘after the click.'”
And that world, Hartmann notes, is actually getting trickier by the day.
Whereas eCommerce was once sort of simple — with one department function siloed and separated from other parts of a retailer — Hartmann noted that is just not the retail world that exists anymore.
“For example, we’ve seen a remarkable shift in how forecasting is done. Three or four years ago, a retailer would have someone at the executive level in eCommerce forecast what units they wanted to sell by day. That is no longer a sufficient model. Forecasting is a lot more complex now. Retailers have to figure out where they allocate the merchandise – and that starts all the way back in the supply chain to figure out how much they want to route to the store, based on all the data they have.”
And it is all that data that belie the consumer patterns that are shifting either online or toward the infamous omnichannel where orders are done online and picked up in-store – and shifting the pressures on merchants and adding more streams of data and complexity to the already pretty full world of interactions that occur in the back end “after the click.”
“The consumer dictates the way retailers engage, deliver, even return, goods and if you don’t play by their rules you aren’t getting the deal,” Hartmann noted. “In the past, retailers would have to think about what their webstore strategies were. Now, it’s the ‘omnichannel brand’ that is the differentiating factor.”
Having merchandise or a prettier site isn’t a big booster, because those things are now table stakes. Those front-end experiences need to run deeper into the business’s back end itself to differentiate the retailer.
“The consumer is triggered by speed and convenience. If retailers don’t offer pick up, well it’s not all consumers that are willing to pay to have dog food shipped across four states, let alone wait for it. They will get the dog food from someone else who can get it to them faster, or save them the fee of having it sent.”
And that is where eBay Enterprise steps in and helps retailers make sense of that expanding world of activities after the click in an attempt to help them all work more smoothly together.
“I do think you really need to combine the infrastructure issues with the technology to address the idea that demand patterns change quickly and abruptly. The only way to solve for that is the right combination of the right inventory, the right infrastructure and the right technology all operating together,” Hartmann said.
That, Hartmann says, has become a pretty tall order, because it meshes order management, order routing algorithms, and flexible and nimble supply chains to balance and match supply and demand. It also requires a flexible and strategically disbursed infrastructure. Hartmann says that just having one hub or two hubs is not enough anymore — today’s retailers have to think about regional routing patterns.
None of it is easy, he notes, but all of it is necessary, because consumers are simply not tolerant when those areas lack.
Physical retail likes to hate Amazon — and that is not entirely unfair, according to Hartmann.
“Amazon sets a high bar to match for consumer experience,” he noted, before concluding that “ultimately it is about the consumer.”
But, he noted, the issue is really about retail itself and how it wants to transition into a new era of commerce where Hartmann says that retailers simply aren’t leveraging their core assets: enterprise-wide inventory.
“[One big challenge and opportunity] is how to leverage their enterprise-wide inventory. I think everyone understands there are two assets a physical retailer has. One is the physical structure, and the second is the physical goods that are disbursed there. The retailer who can figure out how to put that together to get a higher return will win – and omnichannel inventory management solutions are part of that equation.”
Physical retail is not without advantages in this fight, Hartmann told Webster, but no tool is of any real use if not put to the right purpose. eBay Enterprise acts as something of a back end toolkit to keep all the data streams flowing into each other — and helping to inform the right collective set of choices.
It is a big challenge, but ultimately one that retailers can’t pass up, because it is the challenge that consumers are demanding they meet.
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