(upbeat music) >> Narrator: Live from the Wynn Hotel in Las Vegas, it's theCUBE, covering Magento Imagine 2018. Brought to you by Magento. >> Hey, welcome back to theCUBE. We are at the Wynn, Las Vegas with Magento at their Imagine 2018 Conference 3000 plus people here, really cool day we've been talking about all things commerce and digital commerce innovation. Excited to be joined by Peter Sheldon, the VP of Strategy from Magento, thanks so much for joining us. >> Thanks for having me, yeah. >> So this has been really fun, there's a lot of merchants behind us here in the marketplace, we've been talking to some of your customers who, a direct consumer, we just had Coca-Cola on. But we also see a lot of businesses here. Talk to us about what you guys are doing to help, not just the retailers, you started, right, being building this reputation as Magento, helping retailers to target online shoppers, but there's a lot more opportunity that you guys have been successful in, in the business, B2B space. Talk to us about, the vision, the strategy, on both sides. >> Yeah, so I think what's fascinating about Magento is their diversity of our client base, and I think it's a little bit of a testament to the flexibility and agility of the platform, but you're absolutely right, we started out primarily serving the B2C market, working with retailers, CPG firms, branded manufacturers and so forth, luxury goods. But commerce has really evolved and moved on, and I think what we see today is a lot of opportunity in B2B, and so when I think about B2B, these are typically manufacturers and distributors wholesalers who are looking to digitally transform their businesses, and really make the buying process more efficient. So whether it's a distributor who's buying products from a manufacturer, or an end-buyer might be a contractor, especially in home improvement, or something, who needs to buy tools and materials from either a manufacturer or distributor. Traditionally, it was a very traditional sort of, retail based buying experience. You would go to a branch, a distributor's branch face to face, engagement over sales person, or the sales rep would come visit you, and you would through a paper catalog. >> Relationship based. >> Relationship building. >> Exactly. >> And so forth, and that's a high cost of acquisition channel, and so I think what a lot of B2B firms are realizing is there's significant, first of all, there's demand from the buyers because all buyers have their consumer life as well, e-commerce is so mature and the B2C space with Amazon, that buyers are incredibly frustrated if in their business life they don't get that great ease of e-commerce experience, and instead they're still faxing and picking up the phone or even if it is a digital order entry experience, it's really terrible, and it's not intuitive to use, it's not easy to use. So, there's a real demand to digitize that ordering process, but more importantly, I think for B2B firms, there's some real operational savings and putting margin back into the bottom line by creating a lower cost of doing business and serving customers, and it's e-commerce and so I think we see one of the areas where a lot of firms first start out is in the spare parts business, so we work with a lot of manufacturers. It just makes so much sense to move their spare parts and warranty business online, so it's very easy to re-order spare parts, I don't need to pick up and call my sales rep to do that, I can do it in a digital manner. But I think what's really fascinating us is just the diversity of different B2B clients, their backgrounds, there's not a vertical that's immune to this. We see pharmaceutical companies, we see agriculture, we see traditional heavy manufacturing, light manufacturing, life sciences, you name it. And so the diversity of clients we see wanting to use our platform for digitizing their selling relationship that they have, it's really fascinating. >> We've heard a lot today that commerce is limitless, and it sounds like that's kind of what you're talking about, is that this day and age, every buyer is a consumer at some point, right, or everyday. We have these expectations, Amazon set the bar really high and every company to be successful has to be a technology company. So, from your standpoint as the VP of Strategy, some great exciting things have been announced at this year's Magento Imagine Conference. Share with us some of those, and especially I'm curious what you're seeing in the mobile space. >> Yeah, so mobile's really fascinating and I think it actually continues on to what we were talking about a moment ago in B2B. So, if we think about that B2B buyer, often the B2B buyer is an engineer, a contractor, a field service representative. They don't live in an office, they don't have ready, convenient access to either a laptop or desktop. They are out on a site, they are, if it's agriculture, they're out at a farm. >> In a field, yeah. >> Or in a field, or they're in a construction site, or they're inside a plant, and their primary means, or their only means of digital access is their smartphone. And typically they're having a slightly larger screen, phablet type smartphone, probably in a hard case if it gets dropped and so forth. But the way that they're going to engage with a brand digitally and to make a B2B commerce order, to look up the status of their order etc. It's not, we often talk about mobile first, it's not mobile first, it's mobile only. They don't have easy access anymore to desktop, laptop. If you're not serving them through mobile, they're not able to buy from you and they're going to buy from one of your competitors. And we see this thing across the board. Perhaps less so here in the US, but in some of the merging markets where we operate and where we have great success, markets like India. They again, it's very much a mobile only society now, and certainly in mainland China and other sort of emerging markets. So I think we're rapidly going down a path where if you think even in our day to day consumer lives, as we're thinking about making purchases, we're sitting on the couch, we're multitasking or watching television, but it's our phone that we're interacting with. >> Right. >> And if we think about the challenge today about buying through a phone, traditionally commerce purchase experience, it's really not that great. In fact in some cases it's pretty awful. Typical sort of page load time on a mobile can be five, six seconds, and as you want to navigate around using your thumb and scroll through and do some product research, every time you make an action, every time you touch that screen, the page reloads again, and it's actually frustratingly slow. If you actually get to the point of buying, obviously you've got to enter your shipping address, and that's just- >> Can imagine that conversion rates, and things and attrition. >> Exactly. And so- >> What have you guys done to change the game? >> Right, right exactly. So, those conversion rates on the mobile web today are pretty bad. They're about sort of, 1.7% and on a traditional desktop, it's 3.5% but yeah 70% of all traffic and visitors are coming on mobile devices, it's actually quite a profound sort of issue in the marketplace around us. So what are we doing about it? Well there's a really exciting new, and I call it technology, but it's really just a set of standards around open web technologies, Javascript, CSS, HTML, called PWA, or Progressive Web Apps. Now, Progressive Web Apps is not a proprietary technology, it's just open web technologies, but what's changed and evolved are the browsers themselves, so Chrome and Safari, Firefox, they've evolved and they now support what we call service workers, which is the ability for the browser to do more backbone processing. And the end result of all of this are a lot of brands are now rebuilding their websites away from responsive websites, which is the big investment we've had over the last five years to now building Progressive Web Apps. And a really nice thing about Progressive Web Apps is that they perform like a native app, they're very very fast, the page load times are typically around a second or so, and there's no refresh. Every navigation and action is almost instant gratification, so very fast, very slick to use. It feels like you're using an native app, but you're not, you're actually using a web experience in a browser. And so there's a couple of really important things for merchants around that. One, much, much better conversion rates. So all of the KPIs that a VP of e-commerce is ultimately responsible for, they're measured by there's a conversion rate, average order value, bounce rates. They all see significant improvements. And I never say there's some merchants always sort of facing a little bit of a dilemma, should we build native apps, or what should our native app strategy be? And the problem with native apps is they're incredibly expensive to develop, incredibly, a lot of maintenance with all the updates to iOS and Android. And many merchants really didn't see success because consumers will only download and give you real estate on their phones for an app that you really engage with on a very frequent, on a multiple times a day basis. Most of our customers are retailers that perhaps only have two or three transactions a year with their clients, with their end shoppers, and so a native app strategy just doesn't work. So the real exciting thing I think with merchants are, you can actually almost put the need for an app strategy to bed, they don't need one anymore. They invest there in PWA. So here at the conference we announce Magento's support for Progressive Web Apps. We've launched a new development toolkit we call the PWA Studio, and it's really a native capability for our merchants and our system integrators to be able to build Progressive Web Apps on the Magento platform. So we're super excited about it. >> Yeah, sounds super exciting and also really the consumer, the convenience is that consumers are demanding, and you're really reacting to the mobile only experience there. >> That's right. >> Has a huge potential, upside, for the merchants. How are you seeing that being used or use cases for that in the B2B space? >> Yeah, so if anything, it's almost kind of, more applicable in B2B than it is in B2C, although they're both going to adopt PWAs. So what's interesting about B2B is that there is a much more frequent transaction or interaction with the end buyer. B2B buyers are frequent purchasers, they are buying in bulk and they're making purchases perhaps multiple times a day, perhaps multiple times a week. And so they are power users and they do have a great deal of engagement with the brand, with their distributor, so again, it's starkly, I think the B2B firms have built native apps and have done so on top of Mangento, it's very easy to build a native app and integrate it into our Rest APIs etc. But again it's expensive and often it can be a seven figure front sum to initially develop an app strategy and to continue to maintain it, so there's a real there's a real TCO advantage of actually switching that strategy to do a PWA. The adoption can be higher because you don't need to install the app, and just the cost and support of building and supporting a PWA is significantly lower than a native app, and so again there's a lot of use cases for using PWAs in the B2B commerce space as well. >> Awesome. So besides what you announce with Progressive Web Apps, what are some of the exciting announcements you guys have made at Imagine? >> Yeah, so I think product announcements, we got an exciting new product we're calling Page Builder, it's a content management and page building tool. So what this really does is it allows the marketer merchandiser the real control over building and maintaining the pages on their site, and that's mobile web, mobile desktop and building able to do that, and it really alleviates any dependency on having to a front end developer where there's a true wiz with drag and drop capability, gives them complete creative to build very sophisticated content pages, but to do and have complete control over their publishing schedule, being able to preview that. So we're very excited about that. I think it empowers the marketers and merchandisers to be more creative and to get more done in the day, we're empowering them to be, act independently of needing to work with a front end developer. >> Awesome, and you guys speaking of developers, have a very large community. >> We do, we do. >> Of 300,000+ developers. >> It's quite incredible, I mean here at the conference, it's sort of their main annual get together of what we call the community. I'll come here to Las Vegas every year and to the Wynn and the community is here, and a lot of that community is made up of developers, and those developers, many of them work for our merchants, many of them work for system integrators, many of them work for other technology partners, and some are contractors, self-employed specialists and so forth. But as you say, that community is over 300,000 developers strong, that's 300,000 people who make a livelihood doing development on Magento. So it's really an amazing community, and they're incredibly passionate about Magento, and they contribute back to Magento. We are, have our roots as being an open source platform, one of the great differentiative benefits of that is that our community help us innovate and they help us, they contribute code, they contribute features and capabilities back into the platform that means that we can extend our R&D team to be this much, much greater force where we can develop new capabilities and deliver value to our clients at a far faster pace than any competitors do. So it's a really interesting aspect of our business. >> Well Peter, thanks for stopping by theCUBE and sharing the great announcements that you guys have made today and this week, and the direction you're able to go in and help take best practices and things learned in the consumer space, and apply it to businesses. We wish you the best of luck, and we look forward to being back at the Magento Imagine next year. >> Yeah, great. Love to have you back. Thanks so much for chatting with me today. >> Our pleasure. We wanted to thank you for watching theCUBE again, we are live at the Wynn in Las Vegas with Magento at Imagine 2018. I am Lisa Martin, stick around, we're back with one more guest after a short break. (upbeat music)

>> Announcer: Live from the Wynn Hotel in Las Vegas, it's theCUBE, covering Magento Imagine 2018. Brought to you by Magento. >> Hey, welcome back to theCUBE, I'm Lisa Martin, live at the Wynn, Las Vegas at Magento Imagine 2018. We've had a really cool day here talking about lots of facets of commerce, e-commerce, and really talking about commerce as a center of gravity around digital transformation. If you drink Coke like I do, you're going to be pretty excited to hear our next guest. We've got Todd Skidmore, the manager of eCommerce from Coca-Cola. Todd, thanks so much for joining us. >> Thanks for having me. >> So I'm super thirsty now, there's probably some Coke bottles behind us. >> (laughs) Yeah, exactly. >> So everybody knows the iconic Coca-Cola brand and the Share A Coke branding that you guys have been using a long time. As retail, and really as consumers, as we've really started to change the way, not just that we buy, but the experience that we want to have, I'd love to hear the journey that you guys are on at Coca-Cola to make a product that's been around for how long, really personal. So talk to us about what the Share A Coke journey is, and let's start with why you even started it. >> Perfect. Yeah, so the campaign actually started really as an opportunity to connect with consumers in a more personal way, and it was an in-store campaign. It started in Australia, actually, in 2011, and was hugely successful, so it moved its way across the world and made it to the U.S. in 2014 and of course, you can imagine the U.S. as big as it is, and we have the distribution, and complexities, and manufacturing, took a few years to bring it, but it was hugely successful in 2014, but of course, success breeds opportunities, and with that, people started going, "Well, I can't find my name on a bottle "in the store, how can I get my name?" Posting on social media, et cetera, which is great exposure, but we had an opportunity, so when we brought the program back for the next summer, the campaign in-store as well, we also brought in our first foray into direct-to-consumer e-commerce where you are able to go onto the site, personalize a bottle yourself, and get any name on a bottle. You weren't restricted to what was in the store, or even if it was in the store and you couldn't find it, now you had an opportunity to bring that to life. So that's kind of been the journey, and that was three years ago when we launched the site, and now we've gone from just basically selling one skew, which was a Coke bottle, infinitely customizable one skew, but one skew, to now we have over 6,000 skews on the site, including licensed merchandise, lots of different bottle options, all kinds of stuff, so. Really, the whole thing has been about connecting with consumers, listening to what consumers want, and then bringing those experiences and the brand in a really special and unique way. >> I love that you're listening and taking that consumer feedback and identifying by doing so, I imagine, using big data and analytics, to then identify additional business models and revenue streams for Coca-Cola. >> Yeah, so, the crazy thing is we started it and the big thing was you can get your name on a bottle. Well, then we started realizing by looking at the data that people were using it for weddings, and events, and all kinds of things, and reunions, and graduation parties, and so being able to customize it and have it for an event like that brings really a special, you know, the Coca-Cola to those occasions, which is exactly what we want as a company, is to be a part of the communing and occasions like that, so being able to use that data to drive our products and also drive our marketing. So now we don't just talk about getting your name on a bottle, we talk about these occasions and marketing. We have a whole wedding page, talking about weddings, et cetera, so. >> Wow! That's cool. So you guys are a award finalist here at Magento Imagine 2018 for the Imagine Excellence Awards in the Customer Insights category, and it's kind of (mumbles) with what you were just saying in terms of listening to customers, but also from a data-driven standpoint, you mentioned marketing, and I'm a marketer, and marketing is now a science because there is so much data available, but as consumers we want that. We want an experience, whether its Coca-Cola or some other retailer, we want them to know enough about us, to not steal our data, but to be able to deliver a seamless experience regardless of channel, that's relevant to me as a person, as a human. And that's something that you guys will find out, I guess tonight at the awards ceremony. >> Yeah we'll see what happens tonight, but yeah. So we definitely try to use as much data as we can to inform where we're going to take the next program, marketing campaign, et cetera. So it's listening to what people are buying or even saying in the reviews, et cetera, so. >> So in terms of the genesis done in Australia, and then brought it to the states as an in-store program seasonal, a few years ago you've launched the online direct-to-consumer, I imagine, mobile, tablet, any way that they want to consume it. >> Yep. >> Talk to us about opening up this channel, direct-to-consumer and what that is helping achieve from a business perspective. >> Well, I think it's another way to sort of certainly learn more about what our consumer wants, and we certainly get probably the best data that you can get on an eCommerce site than you get even compared to almost any other type of platform or way we've had in the past. We've had rewards programs in the past which was also another way to get great consumer data, but this is one where you absolutely know if someone makes a purchase they're making an investment in your brand, which means you know that's a valuable customer, and that's a valuable consumer that you can then understand that's the type of people that we want to be associated with, market to, and have them be a part and connected to our brand. >> So the responsiveness to your consumers is quite clear. If we take a look at, you said 6,000 skews now? >> Todd: Yeah. >> So it's expanded beyond the actual Coca-Cola bottle. So many different opportunities. How are you using technology to help manage and track all these different skews and ensure that supply and demand is in sync. >> So, we do the best that we can while-- we are, I will be honest with you, we're a pretty scrappy bunch within Coca-Cola, and we have an analytics team, or person I should say, a 'team', person, and we rely on that to pull that data down and analyze it and take a look at what's happening. We're of course reviewing that and reacting to it as quickly as can. I talked about an example in my speaking session earlier today where, at Coachella, TeenVogue picked up one of our outfits and took a picture of a model there. It started trending on Instagram, and it was only offered in-store, in our brick and mortar stores. We were able to get it up online within 24 hours so we could start reacting, so of course that just happened days ago. >> Right. >> So, we're really trying to be progressive and fast and agile about reacting to what consumers are interested, because they were on Instagram going, "Hey, where can I buy this?" et cetera, and so being able to sort of react and do those things is exciting. >> Absolutely. One of the things that I find interesting, and we've talked a lot about this today with out guests, is the conveniences that we expect as consumers, right? We want to be able to go to any device wherever we are and buy whatever we want, and expect that it's going to show up in a little brown box on the doorstep two days later. How are you seeing trends in the consumer space spill into the corporate space? >> Maybe reword that again so I... >> So you're selling to consumers, and you're doing a lot of pivoting, "Hey, they want this, they want that." >> Todd: Oh, okay, so like corporate orders? >> Exactly, exactly. >> Yeah, I mean, I think really we all know that the whole business world and everybody's lives are coming together. It used to be traditional, it was like work was my work and personal was my personal. That's not the case anymore, and also with e-commerce sites, b to b sites now are becoming more like d to c sites. People are expecting much more of it, expectations are much higher from what you're going to deliver on a b to b site. So I think all these worlds are sort of merging, and I think from a corporate perspective, they see an opportunity with a Coca-Cola brand, and we want to be able to deliver that on the corporate side as well, so. >> So is that business growing then, in terms of companies coming to the website to, like you see with, you said weddings and other occasions, is corporate buyers now kind of at that level? >> Yeah, so we even have hotels buying for events on our site now, so we have some relationships there that we've tapped in to, which is the great thing about Coca-Cola is we have all these partnerships with properties, entertainment, et cetera, and we try and bring all those things. That's been a big focus of mine, is taking advantage of the things that Coke already has in place, and bringing them to a new way, and a new way to sort of participate in those partnerships via the bottles basically. >> So the website is by... >> Well, you can go to cokestore.com, that's the easiest way, or shareacoke.com. The reason we've sort of moved to the cokestore.com, think about it, it was kind of a program to begin with, now Share A Coke is just a piece of sort of an overall direct-to-consumer offering that we have. >> So, exciting opportunity tonight with being a finalist with this award, what are some of the things that you're looking forward to as 2018 continues in terms of, maybe some of the next iterations of products or opportunities based on what you're hearing from your consumers? >> Yeah, I think the next year or so is really going to be interesting and where we go in terms of direct-to-consumer and what things we can push into further, I mean we know we've got a really good, solid, we know that we need to to be able to offer something that is special and unique so we will continue to follow that path of, we're not going to try and compete in selling something that you can get everywhere else. It just doesn't make sense. But we want to be able to offer things that we can truly offer that are unique from what you can get elsewhere. >> And continue that personalization, and relationship. >> Yeah, that'll be driving our roadmap forward will we always be unique, special, personal, exactly. >> Awesome, well Todd, thanks so much for stopping by and sharing about Share A Coke. >> Yeah. >> Now I know where to go to order a bottle since you didn't bring me bottles that say Lisa on them. >> I should've brought you a bottle, yes. >> That's okay, next time. >> Yeah, alright, perfect, thanks. >> Thanks so much again for your insight, really interesting conversation. >> Alright, thanks for having me. >> We want to thank you for watching theCUBE. I'm Lisa Martin, live at Magento Imagine 2018. I'm going to go get myself a Coke. I'll be right back with my next guest, see you then.

>> Narrator: Live from the Wynn Hotel in Las Vegas, it's theCUBE covering Magento Imagine 2018. Brought to you by Magento. >> Hey, welcome back to theCUBE. We are continuing our coverage live from the Wynn Las Vegas at Magento Imagine 2018. We've had a really exciting day talking about commerce and how it's limitless and changing dramatically. Joining me next is Sucharita Kodali, the vice president and principal analyst at Forrester. Sucharita, it's great to have you on theCUBE. >> Thanks for having me, Lisa. >> So commerce is limitless. We've been hearing this thematically all day. You primarily are working with retailers on their digital strategies. And you've been doing this for a long time. Let's talk about the evolution that you've seen in the retail space with everybody expecting to have access to whatever they want to buy in their pockets. >> Right, right, right. I would say, so I've been working in the retail industry for the last two decades. I've been an analyst for the last 10 plus years. I've really seen a number of changes. And if I had to just summarize the biggest changes, one is just the inventory across different retail channels. So, that's definitely been a huge huge one. It's like, how do you, how do you order online, but then fulfill the item from a physical store or fulfill the item from another store? So those are, that's basically the digital transformation of retailers. Those are investments that companies like WalMart and Target have really been doubling down on and focusing on. The second big change is Amazon. And they single-handedly have transformed the retail industry. They have increased consumer expectations. And what Amazon's also done is reinvented retail as a business model. Because it is no longer about just selling product and being profitable selling that product. Amazon actually is not profitable with a lot of the items that it sells. It makes money in other ways. And it is probably what I would describe as America's first retail conglomerate. And that becomes a really interesting question for other companies to compete, do you have to become a retail conglomerate? Then, the third big change is just brand selling direct to consumer. I remember when I started at Forrester, my very first project was with a large consumer electronics company that asked, Well, should we even sell directly to consumers? There's channel conflict and issues with our distributors. And now, that's not even a factor. It's sort of table stakes you have to sell direct to consumer. And that's probably where we'll continue to see a lot of retail sales in the future. >> So the Amazon model, we expect to be able to get whatever we want whenever we want it, have it shipped to us either at home or shipped to us so we can go pick it up at a store. It's really set the bar. In fact, they just announced the other day that a hundred million Amazon Prime members. I know people that won't buy something if it's not available through Prime. But I think this morning the gentleman that was on main stage from Amazon said at least 50% of their sales are not products they sell, they're through all of the other retailers that are using Amazon as a channel as part of their omni-channel strategy. If you think of a retailer from 20 years ago, how do they leverage your services and expertise and advice to become omni-channel? Because as today, you said essentially it's table stakes for companies to have to sell to consumers. >> Yeah, yeah. There are so many questions that really require, I call it destroying the retail orthodoxies. And retail has historically been about buyers and merchandisers buying goods. There's the old expression in retail, You stack 'em high and watch 'em fly. And that is just where buyers would, Take a company like Toys R Us, they would basically take what Mattel and Hasbro told them to buy. They would buy a ton of it, put it in stores. And because there was less competition back in the '80s, consumers actually would buy that merchandise. And unfortunately, the change for retailers is that consumers have so much more choice now. There's so such more innovation. There are small entrepreneurs who are creating fabulous products, consumer tastes have changed. And this old paradigm of Mattel and Hasbro, or kind of fill in the blank with whatever vendors and suppliers, pushing things is no longer relevant. So, there was just an article in the journal today about how Hasbro sales were down by double digits because Toys R Us is now going to go out of business. So those are the kinds of things that retailers who did not adjust to those changes, they are the ones that really suffer. They don't find ways to develop new inventory, they don't find new channels for growth, and they don't protect their own. They don't build a moat around their customers like Amazon has done, or they don't find ways to source inventory creatively. That's where the problems are. >> You think that's more of a function of a legacy organization; having so much technology that they don't know how to integrate it all together? What do you think are some of the forcing functions old orthodoxies that companies that don't do it well are missing? >> Yeah, it's a lot of it is just in the old ways of doing business. So, a lot of it is being heavily dependent, for instance, on buyers and merchandisers buying things. I mean, one of the biggest innovations that Amazon realized was that, look you can sell things without actually owning the inventory. And that is, their entire, what we call the third party marketplace, and that is just so simple. But if you were to ask a buyer at a major retailer a decade or two ago, "Why do you have to buy the inventory?" their response would be, Well, you have to buy the inventory, that's just the way it is. And it's like, well why? Why don't you try to find a new way to do business? And they never did. But it took Amazon to figure that out. And the great irony of why so many retailers continue to struggle is that Amazon has exposed the playbook on how to sell inventory without owning it. And so few retailers to this day have adopted that approach. And that's the great irony I think, is that that's the most profitable part of Amazon's business is that third party marketplace. And every retailer I've talked to is like, Oh, it's really hard. We can't do that. But, the part of Amazon's business that everyone is looking to imitate is their fast shipping. Which, is the most expensive part of their business. Amazon is only able to afford the fast free shipping because of the third party marketplace. Other retailers want to get the fast free shipping without the marketplace. And it just doesn't make any sense. And that's really the heart of the challenge is that they just don't think about alternative business models. They don't want to change the way that they've historically run their businesses. And some of this could mean that merchants are not as powerful in organizations. And maybe that's part of the pushback is that, there could be a lot of people who lose jobs. The future will be robo-buyers and financial services you have robo-advisors, why not robo-planners in retail? >> So one of the keys then, of eliminating some of the old orthodoxies for merchants is to be able to pivot and be flexible. But it has to start from where in an organization from a digital strategy perspective? Where do you help an organization not fall into the Toys R Us bucket? >> Yeah, I think a lot of it does have to start with merchandising and putting in some interesting digital tools to help merchants be more flexible. So, you want to flex to supply and demand. And some of that comes with integrating marketplaces into your own experience. Some of it can be investing in 3D printers that can make things that are plastic or metals based on demand. That's something that I always wondered why Toy R Us didn't, for instance, make Fidget Spinners on demand. Why did you have to get them with a six month leave time from China, it never made any sense. You can scale service, so use technology to match great store associates with a customer who may have a question. And you don't have to be in the same store. It can be a Facetime call with somebody who is far away. But very few retailers do that. And finally, the last bit is really to look at new alternative business models and finding new ways of making money beyond just selling inventory. >> That's really key because there are so many oppurtunities when companies go omni-channel of not just increasing sales and revenue, but also reducing attrition, making the buying process simple and seamless. Everybody wants one click, right? >> Right. >> Super seamless, super fast, and relevant. It's got to be something if you're going to attract my business, you need to be able to offer something where you know me to a degree. >> Absolutely. >> Or know what it is I might have a propensity to buy. >> Absolutely. And that's the entire area of personalization. And that personalization can be anything from a recommendation that I give you. It can be proactively pushing a recommendation. That's what companies like Stitch Fix do is I tell you what I want and then they send you a box in the mail of things I think you would like and oh, by the way are your size and within your budget. It can be customization. One of Nike's most successful parts of their business is their Nike ID program which allows you to customize shoes according to colors and different sort of embellishments that you may like. And that's exactly the kind of thing that more retailers need to be looking at. >> What are some of the trends maybe that a B2B organization might be able to love or some of the conveniences that we have as consumers and we expect in terms of-- Magento, I was looking on their website the other day and a study that they've done suggests 93 percent of B2B buyers want to be able to purchase online. So, new business models, new revenue streams, but it really is a major shift of sales in marketing to be able to deliver this high velocity low touch model. What are some of the things that a business like a Magento, could learn from say a Nike with how they have built this successful omni-channel experience? >> Well, interestingly I think one of the most important things to recognize is that every B2B buyer is also a B2C buyer. And their expectations are set by their experiences in B2C. So, if you have everything from all of the information at your fingertips, all of that information is optimized for mobile devices. You have different ways to view that information, you have all of your loaded costs, like shipping, or tax, or if there's cross-border. All of the information related to the time to ship, any customs and duties, all of that needs to be visible because in any experience that you have with say a site like Amazon, you're going to get that information. So, the expectation is absolutely there to have it in any situation whether it's B2B or whether it's buying components or kind of very long tail items. That's basically the cost of doing business at this point, is that you have to deliver all of the information that the customer wants and needs. And if you don't, the customer is just going to opt to go purchase that product at whatever destination offers it. >> Somewhere else. >> And somebody will. That's the challenge when you have 800 thousand Plus eCommerce sellers out there selling every product imaginable in the both B2B and B2C landscape. >> So, on the data side there's so much data out there that companies have any type of business to be able to take advantage of that. I know that there's, BI has so much potential. Are you hearing retailers start to embrace advanced analytics techniques, AI machine learning, Where are they with starting to do that? I know that some eyeglass companies have virtual reality augmented reality type of apps where you can kind of try on a pair of frames. Where are you seeing advanced analytics start to be successful and help retailers to be able to target buyers that might say, oh, I can't try that on? No, I want to go somewhere that I can touch and feel it. >> Yeah, well, it's emerging still. I mean, retailers have a lot of data. I think they're trying to figure out where is it most useful. And one of the places where it is incredibly useful is in the backend with fraud management. So, after retailers were forced to put in chip cards as a payment form, what you started to see was more of the fraud shifting to eCommerce. I just had two credit cards that had to be shut off because of E-commerce fraud. But that is where you see the fraudsters going to. And what you see as a result of that is some innovators in that space technology companies really leveraging machine learning, AI, other advanced data techniques to identify fraudulent transactions and to better help retailers eliminate or reduce the percent of transactions that have to then be charged back. So, that's probably one of the most promising areas. There are others that are emerging. We're seeing more visual recognition technologies. House for instance, is excellent at that and Pinterest too. If there's part of an image you like you can click on it or you can tap it and see other images like that. And that's incredibly difficult. And it was even more difficult 10-15 years ago, but it's becoming easier. There's the voice element, voice to text or text to voice. I think that the best applications they're often in customer service, there are so many interactions that happen anywhere in a consumer facing world. It doesn't even have to be within retail. You can think about the complaints to the airline industry or to a bank. And a lot of it falls into a black hole. You always hear that oh, This call may be recorded, but it is really difficult to go back and transcribe that. And to really synthesize that into major themes. And what ML in particular can do is to basically pull out those themes, it can automate all of that, and can give insights as to what you could be doing, what you should be doing, what are the opportunities that you may not have even known existed. So there are definitely emerging places. I mean even a visual recognition, so we talked about House and Pinterest. Another great example is the computer vision that you have in the Amazon Go stores. And there's a robot that the Wal Mart stores are now testing to go find if there are gaps in the inventory that need to be filled. Or if something is running low or out of stock. So there are definitely some interesting applications, but it's still early days for sure. >> So last question, we've got to wrap here, but, we're in April 2018, what are some of the, your top three recommendations for merchants, as they prepare for say Black Friday coming up in what, six or eight months. What are you top three recommendations for merchants to be successful and be able to facilitate a seamless online offline experience? >> Well, we always have kind of imbalances between supply and demand, and that's where I do think things like third party sellers, third party marketplaces are huge. So to be able to leverage that is certainly one opportunity. Another is to think creatively about promotions. In Japan they have these promotions called Fukubukuro promotions, and it's basically like grab bags of like all the left over inventory. But then they basically put it into mystery bags where you can buy it for half off. And consumers line up around the block at stores to go buy these grab bags. Because they also have also like a gamified approach where, you know, one of out 10 of the bags will have like an Ipad or some really high value item. So people really like these things, and they have trading parties. So just new ways of having promotions beyond just the typical door busters that retailers think about. And then kind of third I think is just try to pace out the demand. One of the big issues in E-commerce has been just the burst in demand that always happen in December. And that creates a lot of problems from the standpoint of actually shipping the orders. So the more that you can pull those transaction forward into November, the better off you are from a fulfillment and supply chain standpoint. >> Alright Sucharita thank you so much for stopping by theCUBE >> Thanks Lisa >> And sharing your insights on the trends and what's going on in the commerce and E-commerce space. Really enjoy talking with you. >> Nice to talk to you too. >> We want to thank you for watching. You're watching theCUBE live from Magento Imagine 2018, I'm Lisa Martin. Stick around, I'll be back with my next guest after a short break. (upbeat music)

(upbeat music) >> Narrator: Live from the Wynn hotel in Las Vegas, it's theCUBE, covering Magento Imagine, 2018. Brought to you by Magento. >> Welcome back to theCUBE's coverage of Magento Imagine 2018 from the Wynn, Las Vegas. I'm Lisa Martin, and I'm excited to be joined by some award finalists of the Magento Imagine Experience Awards. We have Dr. Markus Reheis, the chief marketing officer at Gabor Shoes, and Stefan Willkommer, the CEO of TechDivision, a systems integrator. Hi guys, welcome to theCUBE. >> Hi. >> Hi, nice to meet you. >> Great to have you guys here. Congratulations on being an award finalist for the best sales channel growth. We're going to talk about that in a second, but Gabor Shoes. Talk to us about what Gabor does, where you guys are located, and then we'll talk about how you're transforming the shoe space with e-Commerce. >> Gabor is a manufacturer of shoes, ladies shoes only. Our headquarters in Germany, and our main markets are in Germany and central Europe, but we do also export to 60 countries, more than 60 countries worldwide, to China, to Korea, also to the United States a little. >> Lucky me. So your customers are the retailers themselves. How many different brands do you have, different SKUs, different products? I imagine it's massive numbers. >> Yes, our main product is ladies shoes, as I said, we have several brands for the ladies shoes, Gabor, Rollingsoft for the sports shoes type, but we also offer bags, handbags, and socks and tights, but the most important is the ladies shoes for us. >> So many, many hundreds of thousands of SKUs, lots of different locations. You've been the chief marketing officer there for quite a long time. Talk to us about the opportunity that you saw, that you could give to your retailers by expanding this physical in-store shopping experience into the online world. >> Yes, we have started our online business quite late. We long time hesitated to set up our own online shop toward the end user, because it was always our philosophy that we want to be partners of our retailers. We did not want to compete with them by opening an online shop. So it was clear for us that when we start our online business, we want to have our retailers as partners on our side. And that's why we developed this Omnichannel concept that integrates the retailers. >> Omnichannel is a word that we hear a lot at events like this. It's critical for a seamless customer experience. We were talking before we went live is we're all consumers, everyday lives, we pick up a tablet or a mobile phone and we expect to be able to find whatever we want at a simple click. What was the process like of becoming partners with your retailers? Was it an obvious sell to them, that they have revenue-generating opportunities, the opportunities to reach many more customers in different regions? Or was it more of a challenging conversation to convince them? >> Yeah, let me explain a little bit about the situation. We do distribute via traditional classic brick and mortar retailers primarily. There are around 5,000 companies worldwide that buy shoes from Gabor. They have around 20,000 stores. But the situation is that there is quite a mixed structure of retailers. Many of them are small businesses, family owned businesses, and they do not have the chance to have an own online presence that is competitive. So they have to focus on their brick and mortar business. But nowadays, in Germany, we have around 30% of all shoes that are bought online, and this brings many of our customers into trouble. So it was our idea to open this marketplace to let the traditional retailer participate at the online business. >> So talk to us about, from a technology perspective, the modern technology that you needed to be able to deliver this. So, Stefan, talk to us about how TechDivision, as a long-time partner of Magento, is helping in working with Gabor shoes to enable this Omnichannel experience. >> First of all, the marketplace looks like a simple online shop. So for the end consumer, it looks like any other online shop where you simply buy just the shoes. In the background, there are a lot of processes going on, so like we have to allocate orders to stores, to inventory locations, that means the retailer, and we have to look where the inventory is. We don't want to do a lot of order splitting, of course, because we don't want to ship a lot of different packages, and you need a sophisticated solution who is capable of doing exactly that, because I mean there are a lot of processes, and of course algorithms that around, what do you need, or what do you have to have in place that you can do that like that. And Magento was offering, with the order management, exactly great product to delivering that. So this is the foundation for the whole concept, and makes it able for us, and for Gabor, to integrate the retailers really smooth. >> So how many retailers are integrated currently? >> We have started the concept just a few months ago. It was surprising that so many retailers contacted us and said, I want to be part of that system. So we have around 100 retailers with around 400 stores that still have to be connected. Currently we have 40 stores connected with the system. >> So you had retailers that were proactively reaching out to you, saying, we want to get in on this? >> Yeah. >> Wow, that must have been pretty exciting. And Stefan, you mentioned the word simple. And that's something, as buyers, we want a simple, clean experience as the consumer, but also for the retailer, right, and the supplier. Talk to us about how you're leveraging, You mentioned the Magento management software, to give your retailers this complete visibility of their inventory so that they can fulfill through the right channels. >> Yeah, first of all it is in the German market, in the German retail shoe market, a little bit simpler, maybe than in other countries. There is a couple of POS solutions, there are not too many, and we build a basic interface so they can really easily attach their inventory to our order management, or the order management of Gabor, and then we are able to utilize the different inventory, or the different stocks. That is pretty simple. There are a lot of other processes which are not really technical, it's more about contracting, so more the retailers, there is of course some training, you have to train the people, the staff, because they have to use the platform, and that way they see, okay, an order is coming in, what they have to do now, they have to create the pick list, they have to pick the stuff, pack the stuff, ship the stuff, print the label out, putting the documents in and everything, so you have to train the people and the simplicity is because they just need a simple web browser to do that. So either a tablet or a PC, that's all what they need. They don't need any other software. They don't need really other devices. Basically most of the retail stores already have these kind of devices in store. >> So they can utilize an existing POS system, or maybe an ERP system ... >> Yes. >> instead of having to replace things. So from an integration perspective, it sounds like it's a fairly... >> Yeah, they don't have to invest really money, they just have to, I mean, bring the inventory, and that can be through a flat file, or through a web service, so both possibilities are there. Right now they just need a web browser connected to the internet, that's all. >> Sounds so simple. >> Yeah, it is. >> So let's talk about, we hear the term digital transformation used everywhere, and it means different things to different organizations, depending on where they are in that digital transformation journey. When we look at commerce, commerce is becoming a center of gravity for digital transformation. Markus, talk to us about the transformation that Gabor has undergone. Where are you on this digital transformation journey? >> Still, we are really right on the beginning. We have installed, of course, digital tools to make the sales process easier, but we always thought about B2B processes. For example, we have installed a B2B online shop maybe 10 or 12 years ago, so that's an existing thing. The new thing for us is that we go towards the end user. I have a number for you. We produce around 9 million pairs of shoes every year, and still the amount what we directly sell to the end user is a very, very small amount. So we are at the beginning of this process, but we have ambitious goals, and we want to grow in the future. We started our marketplace concept in Germany, but we want to roll it out to other European countries, maybe to countries outside Europe, so there's a lot to do, a lot of opportunities for us in the coming years. >> So let's talk about the rest of 2018. Here we are in April. You're going to be adding many more retailers. What are some of the things from a technology perspective that TechDivision is going to be able to do with you, and maybe Magento, to start finding the other 8 million in opportunities that you just mentioned? >> In the end, it's not just a thing of the online store, but of course it's a thing of online marketing, so this has to be increased, definitely. Yeah, we still have a lot of things to do, onboarding the retailers, and this again is not just a technical thing, it's a lot of, Stefan already told you, it's more to do with training, and explaining the processes, that costs a lot of time. So it goes step by step, but we make good progress there. >> So last question, Stefan, for you- as the chief marketing officer, I'm a marketer myself, tell me about, from a digital marketing perspective, as consumers, and really, in the B2B space, Magento had a study on their website that said 93% of B2B buyers want to purchase online, right? So we're seeing that trend as consumerization into the business space. From a marketing perspective, there's a lot of shifting going on there, too. Big data has been a big enabler of marketing becoming a science. And being able to demonstrate to the business and influence business there. Tell me a little bit about, in the last minute or so, how are you leveraging big data and analytics, maybe even through Magento, to redefine marketing that you're doing at Gabor? >> Yeah, again, big data can help us to build customer groups, to send them individual offerings. That's a good thing about the digital business, when we have a satisfied customer, of course we can always, again, send them products, product offerings, but these offerings have to be individual, they have to be relevant for the end user. That's why artificial intelligence, for example, can help us. >> Maybe to add something, we already started using Magento BI, for example. So we are using that full commerce suite of Magento right now. We are using the areas to measuring how fast the shipment is done through a retail stores, and then adjusting the allocation to that measurement. So if a retailer is shipping faster, it's getting more likely that he's getting an order allocated next time, when an allocation run is taking place. So we are using this to get a better end user, consumer experience, by having the products earlier, or more frequent ship. >> Right. So many benefits for the businesses, the retailers, maybe repeat sales, they've got this instant purchase capability that Magento released recently, one click, get things even faster, reducing checkout time, all the things that drive up repeat business. But also the personalization front is going to be key to be able to deliver, as you said, Markus, the relevance offers that we all want. >> Exactly. The great benefit of this marketplace concept is that since we have connected the different stocks of our retailers, we can offer much more product by this way than we could do it alone. So the offering of our 3,000 styles per season gets nearly unlimited to the end user. >> Limitless. We talk about limitless commerce. Well, gentlemen, thank you so much for stopping by and having a chat with me today. We wish you good luck on the award nomination. I hear those are being given out tonight, so best of luck, and we hope to see you again on theCUBE soon. >> Thank you. >> Thanks a lot. >> We want to thank you for watching theCUBE, live from Las Vegas at Magento Imagine 2018. I'm Lisa Martin. You're watching theCUBE. Stick around, we'll be right back with our next guest. (upbeat music)