E-Commerce will die | Rafael Campos (VTEX) about the winds of change in online retail
The wind of change in e-commerce comes, no surprise, from China, says Rafael Campos, Vice President at VTEX. And it does so in such a fast pace, that we simply cannot follow.
For instance, in Romania we struggle to implement traditional credit card payments, while the Chinese already have face recognition payments. The world is changing so fast, that a company needs not only change its strategy, but its entire structure in order to follow the latest innovations.
At GPeC SUMMIT, Rafael talked about the decisions companies must take today to, maybe, survive for the next 5 to 10 years. Read the interview below to learn what e-commerce start-ups can do in 2019 to keep up with the big names on the market and what platform is most suitable for an online shop.
GPeC: What do you think will be the future of e-commerce? How do you see things evolving?
Rafael Campos: E-Commerce will die and there will no longer be e-commerce versus physical stores. It will be one. It is one right now in some countries, of course. But I think that in the next 2, 3 or 4 years we will see here what the Chinese are doing right now. They already know how to do it and how to do it fast. And we’re gonna see it as well: the digital world completely taking over the physical world.
So you’re going to see face recognition payments, you will see people using phones to buy in the physical stores and to have more information about the product. I think that these two worlds will combine into one in the next 5 years.
GPeC: If you were a start-up kicking-off on the Romanian market today, how would you build your brand?
Rafael Campos: Retailers here think that Amazon or eMAG are their competitor, while in fact, they are not. The customers’ habits are changing. They want to go to a place where they can buy everything and it’s simple. So they will probably transfer this from Google, through the marketplaces. This is what happened on the US market two years ago. The US customers now go directly to Walmart, because they know they will find the best price and all the products they need.
The same goes for eMAG in Romania. The customers will soon migrate to the marketplace world. So my opinion about that is: let’s use them, let’s learn fast and let’s be the first to learn how to use them as a Google, as a platform, not as a competitor. You must learn how to use marketplace to create a brand.
GPeC: What’s the best platform for an online shop?
Rafael Campos: I could say it’s VTEX :) but I have this idea that a e-commerce platform is like a car. You have to tell me what is the road like, what is the path that you will use this car for. So, maybe Ferrari, a Formula 1 car is the best one for you. If you want to do off-road or something like that, it probably won’t be the same.
You need to understand your path and then you can understand what is the best option for you. Here, in Romania, I think there is this idea of having one’s own platform. I want to develop it on my own, I want to have people to do that. This is something that is not happening anymore in the US. They are having more and more Software as a Service (SaaS).
If you are starting up a company from scratch, SaaS will probably the best one because it’s cheaper and easier. You will use the same technology of others, so you will learn the process and then, if you are a huge player, you must understand the path and you will realize which one is the best one for you.
GPeC: What are the main features of an online platform you need when starting your online business?
Rafael Campos: A e-commerce platform is a marketing tool. Most people think it’s rather expensive, so they won’t invest in it because it’s better to save up. But, in fact, it’s not. If you have a platform that costs like a million dollars per month and brings you some 100 million dollars per month, that’s fair, it’s cheap. If you have a platform that you need to spend a million dollars on and returns 500 million, it’s expensive.
In my opinion, one of the most important features that you must try to track is the checkout process. This is where a platform can interfere. After you add all the products to the shopping cart, there is an entire process. If the process is easier, smoother, ok, I will buy it and it can increase the sales and the conversion rate.
So, probably the first and the most important feature is the checkout. The checkout process must be one-page, easy and that’s it.
GPeC: In terms of marketing, what are some of the tactics that don’t work anymore, but people still use?
Rafael Campos: First of all, SEO. Everybody wants to have a great SEO. But the fact is that Google considers traffic as a variable. At the end of the day, if you are a small or medium-sized company, you can do whatever you want, but probably, in the next 5 or 10 years its the biggest companies who will be the winners from the SEO perspective.
Yes, you must have a SEO strategy, but I think that this idea of surviving or “Oh my God, this is my strategy” won’t work because, in the medium to long term, probably the biggest companies will be shown on the first page.
PPC is something that probably only medium-sized or huge clients can invest in. I can give you an example in Brazil. If you are a start-up or you are starting your online business in Brazil, you will spend roughly 25% of your revenues in Google Ads, because it’s too expensive. And this will be a reality here in Romania for the next years, because every year we see new competitors, new stores and the price will increase. It’s the way it is.
So, if you are a small company, like I said, the marketplace will be the best strategy, because you will pay less in terms of commissions if you compare with SEO cost plus PPC cost.
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