Forrester, PayPal Execs Share Growth, Mobile Strategies At Magento Imagine

The topics of growth and community pervaded the Magento Imagine conference, which attracted more than 3,000 attendees from April 23-25, 2018 in Las Vegas, particularly in two keynote sessions from Forrester and PayPal execs.

3 Keys To Retail Growth In 2018: Supply/Demand Flexing, Scaling Services, New Business Models

In a keynote, Sucharita Mulpuru Kodali, VP and Principal Analyst at Forrester Research, pointed out that 71% of 375 publicly traded consumer-facing retailers saw year-over-year growth in their latest quarter, despite the gloom-and-doom headlines of 2017. This percentage was well ahead of the 65% that grew in 2015-2016. The retailers that failed to grow have encountered these problems, according to Kodali:

  • Trapped inventory that never turns;
  • Poorly trained store staff;
  • Weak store locations;
  • Pricing that doesn’t take supply into account; and
  • Supplier or vendor-led merchandise.

Kodali noted that retailers must continue flexing to supply and demand, scaling service and exploring new business models if they are willing to “lead the charge” and “slay orthodoxies” within retail. As an example of keying into demand, Kodali noted a personal example regarding buying sunglasses for the Aug. 21, 2017 solar eclipse. On Aug. 14, she went to retailers such as REI and Dick’s Sporting Goods, but she couldn’t find anything available until she went to a third-party seller on Amazon.


“This is essentially retail in a nutshell, where this type of situation not only happened that day, but repeatedly happens every day,” Kodali said. “Merchants don’t know what’s out-of-stock, and worse, they don’t have a plan for how to get things back in stock, or how to flex to these shifts in demand. This wasn’t a shock — we’ve known for decades that Aug. 21 was going to have a solar eclipse. My point is that there are things that we can do that already exist to help us manage to this.”

Kodali recommended more retailers leverage marketplaces in response, especially knowing that they can expand their assortment without carrying the merchandise on its sites and/or stores. To differentiate and limit inventory, retailers also should bring new products into the fold via on-demand manufacturing technology such as 3D printing.

And although scaling services can be difficult with limited manpower, that’s where platforms such as online chat and mobile order ahead come in.

Finally, Kodali noted that retailers must embrace new customer business models, pointing to the largest retail and technology companies as leaders in this space. When comparing the “Text Titans” from 2000 to today:

  • Amazon moved from 100% sales from first-party retail to making 40% of revenue from third-party marketplaces and cloud hosting;
  • Apple made 80% of its revenue from Macs in 2000, but now only 10% of revenue comes from laptops and desktop computers; and
  • Google made 44% of revenue from off-site advertising. Now that percentage is only 16%, while more money comes from licensing and ads via YouTube, Waze and more; and
  • Microsoft took in 80% of revenue from Windows and Office sales, but now 50% of revenue comes from cloud, hardware and social networks.

“You may push back and say, ‘We don’t have quite the margins of some of these technology companies,’” Kodali said. “‘We don’t have the level of experimentation or the innovation labs that they do.’ I would say that a lot of other companies don’t either. Delta Airlines has done a decent job at pivoting into its own new businesses. They may not be 50% in a new area, but 7% of its business is now in credit card marketing — revenue that it makes in partnership with American Express and Chase. They make additional money by fixing planes from other carriers. We’re seeing these alternative businesses growing at a rate nearly 5X as fast as the core business itself.”

PayPal VP: Money Is More Than A Transaction Driver

Besides these steps, retailers also must adapt to a new environment in which money is shared as easily between customers as text messages and emails. Bill Scott, VP of PayPal Consumer & Venmo Engineering, noted in a keynote that money is more than just transactional.

“[Shoppers] come to your site — they come to your commerce experience — so they can change money into something that’s meaningful for them, that fulfills their dreams and visions,” Scott said. “We trade money for things in life. That’s not a transaction. That’s very deep meaning in the life of our consumers.”

Scott noted that today’s retailers need to craft their payment strategies on three new realities:

  • Money is mobile and digital;
  • Money is on the go; and
  • Money is personal.

With 81% of Venmo users being Millennials, Scott recognized that money is a story that shoppers can share. In Venmo, when a peer-to-peer payment is made, it is shared on the social feed for other users to comment on or like. Scott shared a personal story about how Venmo helped him connect with his daughter even though he lives in New York and she goes to college in Los Angeles.

“I would Venmo her $5 every Sunday morning with fun emojis, and tell her, ‘Go have a great coffee and tell me about it later,’” said Scott. “That made the storytelling of money real to me, because every time I did that I did it publicly on the social feed, and we still talk about it and it created a huge connection. It’s amazing that you can do that with payments.”

Magento Integrates With Amazon, Launches Progressive Web Apps

Beyond the keynotes, Magento unveiled new integrations with Amazon Pay, Klarna and Vertex to expedite the checkout process, provide flexible payment terms, and deliver instant and more accurate tax and shipping rates. The integrations came two months after Magento first unveiled its direct integration to Amazon Marketplace, with a separate integration for FBA (Fulfilled by Amazon) coming later in the year.

Additionally, the platform provider is partnering with DHL to offer a broad range of shipping services to consumers, and is launching a Progressive Web Apps (PWA) Studio in summer 2018 designed for retailers to build online stores with app-like experiences.PWAs are a new Google standard that give a mobile site visitor extremely fast page load times, and an experience that is much more like an app (vs. a traditional site in a browser).

Magento CEO Mark Lavelle encouraged the audience of e-Commerce retailers and tech providers alike to “Lead The Charge” in line with the company’s new mission statement: “inspire collaboration, contribution, and community which drives innovation and growth.” Lavelle noted that Magento-powered e-Commerce sites generated more than $124 billion in transactional revenue in 2017, but that number is anticipated to jump to $224 billion by 2020.

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