eCommerce Services, a Better Model?

I had the privilege of listening to Brian Walker from Forrester Research speak about “The Era of Agile Commerce” at the Magento Imagine conference a few months ago and it  really got me thinking about the state of eCommerce, especially for the small to mid-sized guys we typically work with.  How is the vastness of agile Commerce affecting them, and indirectly how does it affect our business?

We’ve been lucky enough to work with some of the most innovative online retailers out there, and they have all been saying the same thing more and more lately.  eCommerce, and in particular Multichannel eCommerce, is really freaking hard.  Anybody saying otherwise is blowing smoke up your you-know-what.  I also think it’s even more difficult for small and mid-sized retailers to really take advantage of Multichannel, let alone the vast array of social channels that now exist.

Retailers need to not only worry about multichannel sales acquisition, but now they also need to worry about multichannel customer service.  The social discussion is continuing to have significant impact on the bottom line, but the challenge is the discussion is happening across so many different channels that many retailers are just throwing their hands up and focusing on one or two (i.e. Facebook).

Because of this ever growing complexity, many merchants are forced to hire third party services companies and products to fill competency gaps.  Most of whats happening is too new for there to be any experts (i.e. – “social”), so what kind of value are merchants getting from hiring fat hourly-rate people claiming to know it all?  Sounds scary right?

It’s really easy us for us to talk to prospective clients about how blissful we can make their life in online commerce, but the fact of the matter is that it requires work, a lot of work.  I like to tell our merchants that online retail is not any easier than brick and mortar retail.  A lot of our merchants have learned this the hard way.  They thought that an online store was something stuck a key into and just…started.

We’ve seen it time and time again.  Merchant hires consultant, spends a wad of money to build an eCommerce storefront, and then is left to the wayside because consultant only does “builds” and doesn’t help them actually grow their online channel.  There’s no on-going support aspect of MANY of our competitors services.  And if there is on-going support, it costs yet an even larger wad of money.  I think there needs to be a change.

As a largely services oriented company, we have been experimenting with different “billing” models for the last year and a half.  We’ve actually cut down on our own growth to do these experiments.  Through this experimentation, we’ve found some pretty amazing partners.  These partners started off as typical service clients, and through some really intense transparent discussion they became more than clients.  They became actual partners, not the “strategic” kind.  They became businesses that we have heavily vested interest in the success of.  Not in the sense that we want billings to increase, but in that if they don’t grow and make money, we don’t either.

I think some of the approaches we’re taking are risky, but I also think it’s us showing our partners that we’re willing to take on some of the same risk they are.  We had to ask ourselves, are we really good enough at what we do to take on the risk of not getting paid for our time?  So far, it seems to be working.  We’re seeing some pretty incredible growth numbers for these merchants, and in return, for us too.  We’re helping them deal with multichannel without the monster up-front expense and learning.  Most importantly, we’re learning a hell of a lot more about how eCommerce businesses work from the front (site) all the way to the back (warehouse).