eCommerce

Magento CEO On The ‘Other’ Omnichannel

Somewhere between the early use of computers as devices only the most dedicated of tech geeks could figure out to their omnipresence as essential business tools today, the SaaS (Software as a Service) application became an effective model and compelling value proposition. Yet some worry that not actually owning or hosting the software in their own environment blunted their ability to get all of the customization they might want or need to meet their business requirements.

Magento’s announcement yesterday (April 12) lets merchants have the best of both worlds: its first ever cloud platform lets merchants provision and tailor the software as they wish without having to own the software and the infrastructure.

Prior to the announcement — which was made at Magento’s Imagine 2016 conference in Las Vegas — Mark Lavelle, CEO of Magento Commerce, spoke with MPD CEO Karen Webster about its new PaaS (Platform as a Service) model and its intended place in the evolution of cloud computing.

Lavelle describes the Magento Enterprise Cloud Edition — which is part of Magento 2.0 and runs on Amazon Web Services (AWS) — as unique. Unique because it uses advanced technology to “allow for a Magento application to be provisioned, tuned, managed, upgraded, and monitored” by merchants, at scale, while still allowing the biggest benefit of the SaaS model: the user doesn’t have to worry about any of the infrastructure needed to make all of those parts sing.

“Basically,” explains Lavelle, “the merchant gets all the benefits of cloud computing and the benefits of an open core platform that allows them to own the application and continue to extend, monitor, customize (et al) the way they want.”

By removing that once onerous tradeoff aspect that is associated with SaaS applications, Magento’s offering speaks to merchants who understand, as the CEO puts it, that “the digital customer experience is their brand experience.” A managed cloud environment within the PaaS, therefore, equips users with the necessary ability to differentiate themselves from the competition rather than settling for a “common denominator solution.”

The need for merchants to control the detailed aspects of their own application has become ever more important with the rise of omnichannel commerce. That includes not only the connectivity between digital and physical operations, but also the multichannel layers that exist within online itself.

For example, if a merchant is managing orders from Pinterest, managing content on both that platform and Facebook, and is also running some auctions on eBay or Amazon, “that’s all multichannel, too,” offers Lavelle.

With any overlap of that sort comes different content management issues and different payment rules. And if a merchant is serving multiple countries in multiple languages, “it can be all digital and still have a big omnichannel challenge on its hands,” Lavelle adds. “These modern systems have to be able to integrate all these channels and help that order management happen.”

In the long view, a cloud-based PaaS application such as Magento’s allows for a merchant to apply consistency across channels to two ever-changing considerations: the context of the customer (determining whether she is a new one entirely or a returning one who is using a new channel) and content.

Given the necessity for some merchant offerings therein to be centralized, the common Platformas a Service that Magento is putting forth “really thinks to the future,” states Lavelle.

With merchants and retailers operating in a dynamic environment where the old methodology of “set it and forget it” no longer holds water, it is inefficient for them to be constantly thinking about re-platforming. Instead, offers Lavelle, they “need a platform that is going to live and grow and contemplate that these channels are going to continue to evolve; they’re going to have to try and fail; and they’re going to have to optimize.”

That goes for the element of payments, as well.

Reflecting on how things in that arena are different today than they were even a year ago, Lavelle observes that “payments had to get easier.”

Retailers simply don’t have time, for example, to assess the value propositions, chargeback rules, integration prospects, et cetera, of every new payment system that comes along.

What they need, explains Lavelle, is a flexible platform solution that can incorporate the elements that are viable for their specific operations, and it will ultimately be left to the customers to determine if they use the payment option provided.

Merchants’ attempts to translate the automatic nature of such a payment system integration as they expand into different countries brings complexity, and that is often where Lavelle sees them struggle. They tend to run into gateway incompatibility, back end settlement issues, changing internal rules, and so forth.

Pointing to PayPal’s work with Braintree as an example, Lavelle explains that Magento, as a global platform as a service, seeks to solve that complexity by “contemplating the path that merchants will take.”

Whether they have a physical store (or multiple ones), or if they’re opening up auctions, opening up multiple websites, and/or are going direct to consumer, they “can do that all in one platform,” Lavelle tells Webster.

“They might not use the same technology — they may use expert systems that are appropriate for that channel — but it has to integrate all into this order management hub that connects to their CRM, and then connects to the back end of their business,” he concludes. “And that’s where it’s going.”

To be heading into a world where they can manage, in detail, the customer service end of their business without having to deal with the myriad technological aspects is no doubt a welcome direction for merchants.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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