Shilo, with your merchant hat on (not the sailing the seven-seas variety), we wanted to hit a few questions that we often get from prospective, and current merchants who are building up their eCommerce branded storefronts.
Platforms. We both love Magento for its flexibility and big set of features for Merchants. But as a merchant evaluating enterprise eCommerce platforms. What are the top 3 factors you would say steer you towards Magento over other platforms in the enterprise space?
Last year we made the decision to move off of our proprietary Java-based eCommerce platform in favor of Magento. We went through an extensive selection process and narrowed it down to 2 platforms for an eCommerce company our size. It came down to Magento and Mozu. Mozu is a really cool next generation SaaS eCommerce platform that was recently acquired by Kibo. Mozu was started by the guys from Volusion. Even though the Magento architecture is getting a bit long in the tooth (we are implementing 1.9 rather than 2.0) the reasons that we ultimately decided on Magento are:
- It has the largest install base of mid-market retailers and brands of any platform and we are literally 1 or 2 degrees away from talking to someone who can help us tackle a problem they’ve already addressed.
- It has the largest network of 3rd party solution providers either integrators or extension developers which provides us with a lower cost of ownership compared to other options.
- The open source nature of the platform provides peace of mind that if needed, we could make changes to the core or extend the platform as necessary.
Conversion Rate. This varies by business, but when you walk into a new company, what triggers the alarm for you that there is a conversion problem? What are steps you typically would recommend to address it? What tools are you using currently?
Improving the customer experience is critical and needs to be a core competency of any retailer or brand. How well you are converting your traffic is so critical to the overall financial health of the business. It’s one of the key metrics influencing your allocation of marketing dollars and what you are willing to spend on traffic to your site. I’ve attacked the conversion rate problem by both working with agencies and building internal expertise. Generally, I am in favor of building strong internal teams and would have a bias for that direction, but there are some great agencies you can work with, too. My general philosophy on testing is to start at the cash register and work your way back. There are dozens and dozens of tools that can help with testing, but really the foundational tool set for us is Visual Website Optimizer and Google Tag Manager. With VWO we get a lot of capabilities all in one–from session recording, to triggered surveys, to A/B testing–that really help us attain more insight into how people are interacting with our site.
In addition, last year we started doing a cross functional customer journey mapping exercise. This process was eye opening as we brought in folks from customer service, product data, marketing, merchandising and development to map the entire customer journey of 2 of our most important customer archetypes. This work extended beyond just their interaction with us, but started with the problem they were trying to solve in the first place. We identified a lot of friction or pain points and not a ton of pleasure points. There is a huge opportunity to innovate and create some incredibly compelling customer experiences, but it starts with having a good technological foundation to build on and great team dedicated to continuous improvement.
There are so many factors influencing conversion rate from really big strategic issues to relatively small things like a bad form design. When I think of it, it just reminds me that eCommerce is hard.
Merchandising, Personalization. Retail stores spend fortunes on their storefront window displays, thinking about customer paths - what is the eCommerce approach and equivalent?
The equivalent is the home page hero/slider that many eCommerce sites have adopted. At Destination Lighting, we’ve done a lot of A/B testing on the home page. Our testing so far hasn’t revealed that merchandising changes to the home page have much impact on conversion, yet we still spend a lot of time designing monthly promotional messaging to refresh the home page each month. This finding is consistent with other testing that I’ve seen too. Less than 10% of sessions begin with the home page, while the vast majority of traffic lands on product category or detail pages. This is typical of what I’ve seen throughout my career and I believe speaks to the influence of how marketing dollars are predominantly allocated to lower funnel spend and consumer behavior. Testing on the homepage is important but should be a much lower priority than the rest of the site.
Metrics. As the proprietor of SweetMetrics at one point, we know you love data. What is on your dashboard? What stats do you look at daily / weekly / monthly?
Only the sweetest of metrics, I assure you. Yes, I love data and do my best to remove as much opinion from our decision making as possible. I’ve had the good fortune at both evo and Destination Lighting to work with some like-minded individuals that have a love for data. In the last year and a half I’ve been able to bring on a true data scientist that has taught me more about statistics than I ever knew my brain could handle.
I’ve had the good fortune of working with Stephen Lynch and the team at Results.com to tune up our strategic planning process, too. Stephen’s mantra of “strategy first” is so important and is easily overlooked. There are so many knobs to pull and levers to push that it’s super easy to keep ourselves busy week in and week out and before you know it, years have past and you haven’t made the progress you’ve hoped to. I’ve seen, and experienced, the opportunity cost of being on the wrong strategy.
One of the questions Stephen asks that I love is this:
If you were on a island and you could only choose 5 KPI’s to gauge the health of your business, what would they be?
I boiled this down to 2 financial metrics, 2 team metrics and 1 customer health metric. From there, all other metrics need to map in some way to those 5 metrics. For us, those 5 metrics are:
- Year over Year Growth
- Contribution Margin
- Employee Happiness
- Defects Reported
- Net Promoter Score
We’ve learned a lot working with each of these metrics and I could write an entire blog post about them.
There is a shitload of vendors in the eCommerce space. All marketing to merchants selling their platforms, tools, analysis, services. As a branded store owner–what separates the wheat from the chaff?
Greg and I met over 15 years ago when, ironically, he hired my web development company to build his first eCommerce site–World2Market (I believe that’s what it was called). Back then it took months and months to start a meaningful eCommerce site. One of the things that has changed in the last 15 or so years is the proliferation of tools and the ease of implementation, primarily due to the rise in cloud-computing and the SaaS business model. It’s made it much easier and much less expensive to test out a variety of services to improve the customer experience and grow your business.
The number of startups chasing this market is mind boggling and I get calls from new companies every week. I’ve got a friend Roy Steves, that is the former CMO of PoolSupplyWorld that is now on the vendor side running the paid search firm StatBid. Roy has a unique way to vet vendors (a.k.a “torture unsuspecting sales reps”) at conferences. He’ll walk up to a vendor’s booth at a trade show and ask "what do you do that I couldn't build for myself in a weekend with enough caffeine?" That question can eliminate a bunch of vendors that aren’t worth your time.
What I find is the most valuable–and very few vendors do it really well–is to help build the business case for their solution. A lot of vendors just talk through their value prop (which typically sounds the same as a dozen other vendors before them) and eventually get to the price of their offering. What a lot of vendors fail to understand, though, is that in addition to their cost there is the opportunity cost of trying their solution relative to all of the other opportunities; the implementation cost, and the program management cost. All of those costs have to go into an equation to make a business case for their solution. The better a vendor is at helping us understand that the easier it is for us to make a decision. I love vendors that take as much risk out of the equation for me as possible and are willing to put their money where their mouth is. For me, this often looks like a risk free or relatively risk-free trial or proof of concept to validate all of the assumption in the business case.
The internet and what we can do with it changes at such a rapid pace, however commerce feels like it has been on a plateau for a while. There are innovations, particularly in security, happening all the time but the process is largely the same as it was in 1999. What do you think the next frontier is for eCommerce?
I couldn’t agree more. We are still pretty much living with the same structure of Home Page > Category Page > PDP > Checkout > Thank You. I’ve actually presented on this topic before when I was at Pro Golf Discount where we mocked up a next generation eCommerce experience. Finally, I am starting to see the convergence of a handful of technological and social trends that have the potential to dramatically change what eCommerce looks like in the next 5 years.
I started an eCommerce peer learning group called Huddl and we are conducting a survey asking the eCommerce community what eCommerce will look like in 2021. Out of 25 trends we polled the eCommerce community on, 2 of the biggest trends identified were the rise in artificial intelligence/machine learning and the evolution of user interfaces. We are starting to see what this future will look like with Amazon Alexa and Google Home. By 2021, what percentage of eCommerce transactions will we just speak to some device listening to us ready to take our order?
For merchants trying to stay current, what should they be reading? What events should they attend?
No doubt there are tons of great resources to read or listen to depending what you want to learn, but generally I don’t find time to keep up with all of it. I love listening to Audible.com and most of the books I listen to on the way to the office don’t have anything to do with eCommerce. However, I absolutely love talking shop and meeting people in person, which is why I started Huddl so I could learn from my peers. Our last Huddl was in Portland, and this spring we’ll have another one in Seattle and our first in Vancouver. These events are a blast. They are small, only 20 or so retailers or brands, with one vendor hosting the evening. We have 4 presenters delivering a PechaKucha presentation (20 slides that auto advance every 20 seconds) so the presentations are fast and a lot of fun. You can check out some of the past presentations on your YouTube channel to get a feel for them.
Other than that, I always attend eTail West every year. The timing is great because it’s held during the Winter and the event is in Palm Springs so it’s nice to go get some sun.
Shilo Jones is a proven expert in the field of eCommerce having spent a couple of decades now building e-commerce companies. In addition to acting as the managing Director of eCommerce for Destination Lighting, Shilo has helped build other successful retail brands including GolfDiscount.com and evo. Shilo is also an advisor and investor in several other e-commerce startups.
He has worked tirelessly to build the eCommerce community in Seattle and possesses a very unique perspective across the entire eCommerce landscape that stretches from the inception of online commerce.
If you’d like to learn more about Shilo, please feel free to visit his LinkedIn.