Anticipatory commerce is the way of the future: Magento CEO

As the move into the online space for a bricks and mortar store dramatically redefined a business model, the next big shift will be for a merchant to anticipate where and what their customer wants, according to Mark Lavelle, Magento Commerce CEO.

On Wednesday, Lavelle unveiled Magento's latest ecommerce platform, Magento 2.0, which he said builds on the existing open source architecture, and enables a merchant to keep up with a consumer's digital demands.

"We took the stuff that was added by users on along the way and integrated into the platform and it's now table stakes, rather than additional options," Lavelle said. "It's a fairly extensive re-architecting of what made Magento successful in the early days."

According to Lavelle, the need to enhance the platform was in direct response to needs of today's consumers who are time-stricken and want immediacy.

He said when his team realised people were clicking on things on their phones, the Magento community jumped straight into responsive design, which he said made a merchant's website look just as good, if not better on a mobile device, as it was not that long ago a desktop website was not compatible with a smartphone.

"The way you win ecommerce today, if you want to beat Amazon, you have to be able to delight the customer. Have what they want, when they want it, whether it's on an app, on a website, and get it to them the way they want it," Lavelle said.

"Have the product, get the product. That's the experience. It's very competitive."

Highlighting why technology is so critical to a company, he said a business only has a second before it loses a customer's attention.

"This generation lives digitally. It's a heads down society so brands spend all this money putting stuff above our eye line, but we no longer look up there," he said.

"What they see instead is their social network, and they demand a level of immediacy brands have to keep up with. Brands cannot wait a year or two, they have to be able to experiment with things instantly to see if it's going to work."

Lavelle wants to take the friction out of the online buying space, and said we progressed past the hurdle of putting our credit card details online, as well as the hesitation to purchase clothing that we had not tried on. The next hurdle, he said, will be to trust the merchant and what they are placing in front our faces.

"I think the next big thing is that I will have things suggested to me in my daily life that are uniquely tailored to me because I'm allowing them to see, when I go on to an application or a store, my interests and my intention to buy," he said

"Pinterest is a great example; unless I want to walk through a shopping mall and spend some time welling away in serendipity, I will have things suggested to me that are precisely what I didn't know I wanted -- but will make me very happy."

The pinnacle use of such technology, in achieving such a frictionless shopping experience, Lavelle said, will save consumers time and money, and make their lives more enjoyable.

"This, 'wow you know who I am' is what we're already getting used to," he said. "That will be the new brand loyalty. That anticipatory commerce that we will come to just expect in our lives."

Lavelle said his company is the number one omnichannel commerce platform in the world, and holds a 45 percent share of the ecommerce market in Australia.

"It is that big because it is based on an open sourced platform that thousands of developers and system integrators in the world have created opportunities for digital commerce, omnichannel commerce, and ecommerce," he said.

"There's a phenomenal community of people who take Magento and implement it for websites and digital sites all over Australia and why they love it is they can just do whatever they want with it, and create unique customer experiences.

"The phenomenal amount of economy that rolls around Magento is what we believe to be about $50 billion of ecommerce that happens in the world. If that were one company, it would be second only to Amazon in terms of size."

Magento was acquired by eBay in 2011, following on from the minority stake it purchased in 2010.

"It was acquired by eBay about four years ago and a couple of big things have happened this month; one is we've spun out as an independent company," Lavelle said.

"Back when eBay was one company with PayPal, Magento grew and continued to grow within eBay and then it was combined with a company called eBay Enterprises, which did fulfilment, customer service, and the operations side of running ecommerce."

In July, eBay officially spun out its online payments system, PayPal, and the independent company moved onto a Nasdaq listing.

"When eBay spun PayPal out, the decision was made they didn't need those omnichannel assets any more and eBay itself was going to focus on marketplaces," Lavelle said. "So Permira came in and essentially bought a lot of really advanced technology that powers omnichannel, like in store pick up, clientèle applications, order management systems, and the Magento digital commerce platform.

"With Magento being such a widely known name across the world, we called the company Magento Commerce; it stands alone, wholly owned by Permira."

It has not been all smooth sailing for Magento. In June, it was reported eBay had patched three serious security vulnerabilities it discovered within the Magento system, at the time in the heart of the eBay platform. The vulnerabilities were originally submitted to the eBay security team through the company's Bug Bounty program in March, with the eBay team issuing patches to fix the security flaws less than a month later.

Last month it was found that websites running the Magento CMS were infected with malware in a fresh campaign which impacted 7,000 domains within days.

"There's so much that goes on with this every single day; we have a security department that does nothing but monitor and work on things for our clients and the open source community. We run a bounty program, too. You have to do this, really," Lavelle said.

"The complexity with open source, since you are giving it away, is you don't necessarily know everybody who's using Magento; it's always a unique and custom challenge to keep up with this risk.

"Everyone is digital now. In our digital lives we're relying on the technology and the internet, and even more so, the opportunity for bad guys to take advantage of that has blown up -- as the internet has blossomed, the bad stuff has also blossomed," he added.

"A lot of the things digital commerce has made possible for the good economy, makes it possible for the bad economy. We're just going to have to keep working on it to eradicate it."