This first installment of the
e-Commerce Champions series features Eric Best, CEO and
founder of Mercent. Eric Best is an entrepreneur
and experienced manager of strategy, people, and process.
Founding MindCorps in 1996, Best created a profitable,
high-growth software consultancy that served the Internet and
Fortune 500 markets. MindCorps customers included Microsoft,
Universal Studios, Kodak Polychrome Graphics, Hasbro, and
Network Associates. In 1999, Best and his partners at
MindCorps created a spin-off software product firm, Emercis
Corporation, to provide e-commerce infrastructure tools to
enterprise businesses. Best orchestrated the sale of MindCorps
to Amazon.com in 1999 and the sale of Emercis to
Impressa Inc. in 2000. Joining Amazon.com, he managed business
development for the Amazon.com Commerce Network, working on
the deal team for Amazon's first major brick-and-mortar
partnership with Toys "R" Us. Serving as Director of
Ubarter.com, Best helped facilitate the sale of the business
to Network Commerce in 2000 for $45 million.
Prior to Best's work in the
software industry, he performed immunology research at
Bristol-Myers Squibb's Pharmaceutical Research Institute in
Seattle. Best holds degrees in Business Administration and
Biology from Seattle Pacific University (SPU), currently
serves on the SPU Entrepreneurial Studies Council, and is a
member of the SPU Society of Fellows.
In our interview, Best
discusses innovative ways to make e-commerce ventures
successful, as well as how to connect with customers and drive
your revenue.
eCommerceIQ: Briefly tell us a little bit
about your background and how you came to form
Mercent.
Eric Best: During the
90's, I founded and ran an e-commerce consultancy in Seattle
called MindCorps. We were a Microsoft partner, and built some
of the first online stores and auctions for companies like
Universal Studios, Wizards of the Coast, and PhotoDisc. In
1999, MindCorps was acquired by Amazon.com and my partners and
I went to work on internal initiatives there. I helped Amazon
establish relationships with companies like NextCard and Toys
"R" Us.
In early 2001, I felt it was
time to jump into a new entrepreneurial pursuit. I started a
marketing consultancy that helps customers like Microsoft,
Amazon.com, Lexmark, and other technology firms demonstrate
the business value of their products. One of our first
projects was helping Amazon create the technical documentation
for its third-party seller platform known as the
Merchants@Amazon.com Program
Based on the technical insight
we gained through this engagement, and our history as
employees of Amazon, we saw an opportunity to serve retailers,
catalogers, and direct marketers interested in selling through
Amazon.com. Mercent is a new business unit, product line, and
brand focused on the online retailing market. Our flagship
software is called Mercent Commerce System. Based on our early
success, we've recently extended the technology to help
retailers advertise through leading online shopping portals
such as Shopping.com and BizRate. We've signed over 25 leading
national retailers in the last 18 months, including Lucky
Brand Jeans, Proflowers, The Shane Company, and
Fortunoff.
eCommerceIQ: What is unique about what
Mercent offers to retailers who want to have a strong
e-commerce presence?
EB: Our mission is to
provide our customers with maximum marketing reach through
channels that offer maximum merchandising control at the
product level. This means focusing on online shopping
environments that allow merchants to provide deep product
information and a better end-customer experience than typical
online advertising tools such as e-mail, banner ads, and paid
inclusion.
Mercent Commerce System makes
it easy to connect with and manage selling platforms like
Amazon.com and shopping portals like AOL Shopping and
Pricegrabber.com. Amazon.com has established an active base of
over 42 million customers -- and is unique in its ability to
offer retailers a turnkey transactional environment for
selling online. There are over 60 million buyers visiting the
leading shopping portals each month. Mercent Commerce System
provides retailers with a single point of integration for
connecting with these customers, and advanced technology to
help retailers maximize the value and ROI of these channels
over time.
eCommerceIQ: What insight can you provide
to any e-commerce retailer in regard to managing and
connecting with customers online?
EB: There are a few
trends worth noting that are driving technology innovation.
The first is the important role of marketplaces like
Amazon.com in brand development and merchandising. Although
growing your top line revenue is an important driver in a
merchant relationship, it's only part of the story. Merchants
benefit when customers associate their positive shopping
experience with the sellers' brands, elevating the third-party
retailer in the eyes of the consumer.
Second, we see a trend toward
SKU-level or item-specific merchandising. Your brand image is
critical, but if you're not thinking about merchandising in
terms of the most detailed product attributes and variables -
pricing, title, description, keywords -- you're not fully
leveraging available merchandising control.
eCommerceIQ: By all accounts, there is a
growing evolution of online marketing and multi-channel
retailing. How does this evolution impact managing brand,
sales and customer experience?
EB: An expansion is
definitely occurring in the way that brands and products are
reaching consumers -- not just in the number of channels, but
in the number of value-added intermediaries involved in each
promotion or transaction. Retailers, catalogers, and direct
marketers are connecting with customers where they shop and
buy through partner-enabled channels combining services from
merchandisers such as Amazon.com, advertising portals, and
affiliate networks. Mercent calls these channels "Distributed
Merchandising Networks."
Also, online shoppers are
becoming savvier at evaluating competing product offerings and
merchants on the Web. Whether they purchase online or offline,
shoppers increasingly base their perceptions of a retailer's
selection, service level, and brand image on the online
experience. The depth and quality of information that
retailers provide through online marketplaces and shopping
portals exceeds that of other promotional tools such as search
engine marketing. So, we see these channels as critical for
establishing credibility with consumers.
There's a timing element to
this as well. To be competitive, you have to present the most
current information in terms of inventory and pricing to your
customer, whether they are on your own e-commerce site or
within a remote channel. With the advent of more structured
tools based on XML Web services, it's possible to greatly
improve the timeliness of data presented to customers through
third-party channels.
eCommerceIQ: What do you think have been
the biggest changes in online retailing over the past two
years?
EB: It's funny how
things have changed in the last two years. Instead of worrying
about survival due to limited market potential, online
retailers are now concerned with maintaining market share in
light of massive market growth. E-commerce and online
advertising have blown away the offline alternatives in terms
of revenue growth and marketing, operational, and IT
investment. While the offline retailing market is growing in
low single digits, online retailing has doubled in size in the
last 24 months to become a $144 billion dollar market. The
online advertising dollars that companies allocate in their
budget are today the largest that have ever been reported. In
Q1 of 2004, $2.3 billion was spent on online advertising. That
was a 40% increase over the previous year, and it was the
largest amount spent on record. The analysts who reported
these results had started tracking the expansion in 1996. It's
safe to say that it was the biggest quarter for online
advertising in history.
e-CommerceIQ: Of your most recent projects,
which one stands out and why?
EB: Altrec.com is a
successful "outdoor lifestyle destination Web site that brings
together everything necessary for individuals to satisfy their
passion for the outdoors." Altrec was selling through a
limited number of shopping portals that direct customers to
Altrec.com, in most cases manually connecting with each portal
to be able to routinely update merchandise displays and
pricing.
About a year ago, Altrec began
using Mercent Commerce System to manage and expand its
presence on leading online marketplaces. Mercent helps Altrec
manage data formats requested by each of its portal partners.
With Mercent, Altrec was connected to the expanded network of
shopping portals in only one week. Since its adoption of
Mercent Commerce System, Altrec.com has saved 50% managing
these marketplace relationships while boosting overall sales
8%, according to Altrec.com CEO Mike Morford.
eCommerceIQ: What are some integral parts
that make an online storefront successful?
EB: As buyers become
more informed, with more options for where and how to buy,
merchants have to understand how and where they engender or
lose customer trust. You can drive traffic to your online
store all day, but if it's hard for customers to find the
right product, if items are out of stock, if returns are
difficult, you're wasting your budget. Retailers that expect a
high ROI on their merchandising dollars have typically
established and are meeting a published service level defining
their fulfillment terms, customer service level, and so on.
You can't fight bad service and a bad reputation with more ad
spending for long.
Once you've addressed the
service level issue, then it becomes a question of creativity
in reaching your customers -- both in the sense of getting
your message in front of them, and then in establishing that
emotional connection. That can be hard to do in a comparison
shopping environment where more and more sellers are meeting
more and more customers on what you might call "neutral
ground." Again, it gets back to offering the most complete and
timely information about your products -- and at the same
time, communicating your unique value proposition, whether
it's price, service, or domain expertise through the
merchandising medium. Knowing what sets you apart from your
competitors -- ideally a combination of all of these benefits
-- makes it easier to create consistent messaging across
channels.
eCommerceIQ: Looking at impacting the
bottom line in cost cutting initiatives, what are the top
three things online retailers can do to keep their costs
low?
EB: Leverage new
channels: Look for ways to leverage additional channels to
reduce inventory and increase inventory
turns.
Reduce integration costs:
Minimize technical integration costs across partners and
channels by taking advantage of the latest online technologies
like XML Web services.
Rely on analytics: Most direct
marketers would agree that there's always an opportunity to
better measure the performance of their merchandising budget
and partnerships -- to better understand them and improve
them.
eCommerceIQ: What do you foresee in the
future in regard to the growth of distributed merchandising
networks and their long-term impact on
e-commerce?
EB: Distributed
merchandising networks imply a growing "distance" between the
customer point of sale and the seller, and an increase in the
number of intermediaries involved in merchandising and
selling. The ability to manage these intermediaries becomes a
key driver of sales performance, brand stewardship and
customer experience. Retailers, catalogers, and direct
marketers should approach these distributed partner
relationships with the same level of intelligence and
discipline that they have applied to their direct sales
operation.