eCommera’s Michael Ross answers our questions

Figleaves.com co-founder and chief scientist at ecommerce software and analytics provider eCommera, Michael Ross reflects on his fifteen years in eCommerce, learning from mistakes and the data revolution gripping retail.

By Gabriella Griffith

You helped to set up Figleaves.com back in 1998, which was one of the pioneering eCommerce sites, where did the idea for an online underwear store come from?

“The previous incarnation of Figleaves.com was an online shop called EasyShop. We were trying to dominate the online market for women’s products like perfume and beauty products in an online shopping world that was mostly male dominated.

“We found that is was too broad and decided to focus on underwear. Figleaves had been a women’s underwear brand in the States but they had run out of money so we bought the name and what assets they had left and set up Figleaves.com in 2000.”

What was it like trying to set up an eCommerce site back in 2000?

“It was like operating in the Wild West in the sense that there were no real guidelines. It wasn’t clear which bits of retail still made sense online and which parts of the rule book that needed to be ripped up.

“The technology and marketing was all so new, Google didn’t exist at the time. We were seeing everything through from first principles. In some cases this was good but not always. The only trick was to try and get more right than wrong.”

Did the business take off very quickly?

“It was always very challenging. We immediately got good consumer adoption as we had a proposition that resonated with the market. Underwear turned out to be a category where none of the high street competitors, mainly department stores, didn’t have an online presence.

“People found it quite easy to buy underwear online, they knew their size and what brands they liked so went for it. At the height of the business, between about 2002 – 2004, we were bigger than Net-A-Porter in the fashion stakes and pretty much ahead of the pack.

“The downside was that we got a couple of fundamental things wrong. The vision was to be a category killer, what we called “multi-brand global underwear domination”. The flaw was that our most valuable, loyal customers didn’t buy underwear that often. With successful eCommerce sites, the loyal customers are also frequent. That is how you make your money. Infrequency of loyal customers screws your economic success, in the medium term, the business stops growing.

“If we had had real insight we would have diversified the range earlier.”

So when did you leave the company to set up eCommera?

I exited in 2006 after we had external investment. It was a good time for me to do something different. Sadly Figleaves.com went into rapid decline after that and there was a “fire sale” two years later.

The premise of my new venture, eCommera was to share my knowledge. We had done a lot of good things at Figleaves.com but I also understood the challenges. This was at a time when lots of retailers were still buoyant and while many didn’t have a presence on the web, it was becoming a must. I could see CEOs struggling with how to set themselves up online – what was the technology like and what were the key metrics? eCommera became a provider of eCommerce services to retailers and brand owners who wanted to drive their profits online, with a focus on technology and data – two things people often get wrong.

What have been the biggest changes that you have perceived in the eCommerce landscape since your start in the area?

“Everything has changed. 1999 was a gold rush period on the internet with lots of businesses with vast valuations but no substance. It was fantasy, eCommerce was a tiny part of the retail landscape, you really didn’t need to be online. Moving forward though it became clear that eCommerce and the internet was going to be a force to reshape retail and it is still doing so. Anyone that believes otherwise will get a nasty shock.

“One of the most seismic shift from the anonymity of customers to the familiarity. Increasingly, retailer will know all of their customers because they are buying online, checking-in at a shop or leaving their email at the point of purchase. Anonymity is lifted and that trans forms the way retailers need to manage a business and the types of action you must take to succeed.

“We are at a really interesting point in the evolution of retail.”

What advice would you give to someone setting up an eCommerce site?

“I see big data as the critical thing that eRetailers need to get their heads around. Planning, measurement, action and review are the four elements that need to be transformed by the use of big data. It should effect your growth, your targets and how and when you take action.

“In the physical world, if you have 50 stores and they are all performing well apart from one, you go to that store and diagnose what is going on. The nature of physical retail makes it easy to pinpoint what is going wrong – are the shelves stocked? Are the staff attentive? Do the windows look good? etc. It’s not possible to do this online without the proper use and data.

“Reflecting on my time at Figleaves.com, I had the right data but was looking at the wrong things. We had amazing reporting on back-orders, the value of certain brands, and would take orders for out of stock items etc. but that was all wrong.The point was measuring our delivery of promise. What did we tell the customer when they placed the order? Telling the customer an order will be shipped in three days and doing it in a week, is bad.

“There has been a profound shift in the way retailers must look at data. At Figleaves.com we thought we are great but it turns out we were terrible and needed to look at data in a different way in understand the business.”

What do you see in the future of eCommerce?

“On the horizon what I expect to see is retailers getting the basics right, so the next big thing is lots of little things. Having the right products, getting pricing right, answering emails – all of the things that you presume people are getting right and they just aren’t.

“I spoke to a leading multichannel retailer about the importance of augmented reality in the future of eCommerce, he described it as the icing on the cake, for which we do not yet have the ingredients. I have to agree. Retailers need to crack the basics first.”

For more, visit eCommera.com