Is the eCommerce migration and replatform wave dead or alive and kicking?
I sat down with Xavier Armand, CEO at Vaan Group, to discuss his take on Magento and whether there is still an opportunity for brands to make the move.
Describe what you do
I lead Vaan - an agency that creates the world's best eCommerce websites through our proprietary design framework: Brand Conversion Design.
As CEO, I’m responsible for the excellence of our work and the commercial success of the business. This means I spend most of my time either reviewing the work that we do for clients or selling the expertise and process of the agency to new potential clients.
I tweet a lot. And today I got a reply that made me smile:
“Something I really appreciate about you: you consistently talk about your work like doing a great job really matters to you.” from Andrew Faris (a very notable and well respected eCommerce consultant and leader)
I think it’s perfect.
You recently said that “...every month that goes by that a brand stays on Adobe Commerce Magento is a month they are falling behind their competition on Shopify Plus” - tell me more.
So this post was about AI and how I think it will impact eCommerce orgs. The assumption I didn’t describe here is this: as software development shifts towards AI, Shopify's consistent datasets and APIs enable better AI application, because the quality of AI output depends on the quality and cleanliness of the inputs. Compared to a sea of one of kind implementations of Magento, a normalized data set from a large swath of Shopify merchants makes it better positioned to leverage AI.
And because of the rate of change in the space, each month is like 6 months, and hence those stuck on legacy platforms are falling behind.
My sense is that the great Magento to Shopify migration wave happened in 2017 - 2019. Tell me more about why you think there is still growth in this segment of the market.
I’d agree that the surge was initially around the impending upgrade which forced people to migrate. But this was also during a zero interest rate environment. Money was cheap. Things have changed.
The current economic environment is forcing companies to examine their P&Ls. One of the fastest and most efficient ways to cut costs is to eliminate licensing fees from the business. In a bear(ish) market, cost of ownership begins to trump less tangible factors like “flexibility”, “customizability” etc. So I think there’s another wave of companies ready to migrate that are ready to give up some “control” if it means they’re going to make more money.
It also helps that Shopify has changed its tune and is now very focused on the enterprise and releasing features that they need right in time with this.
Magento isn’t completely dead. Why do you think a brand would consider Magento in 2023?
I’d say Magento makes sense for the same reasons that I think headless can make sense - complex commerce use cases. In fact, I’d argue that if you’re considering Magento, you may want to consider headless first.
Magento versus Shopify used to be the number one platform debate. But I feel that has been replaced with whether one should go Headless or not. Do you agree? And what is your take on Headless / Composable?
Mostly headless is a solution in search of a real large scale problem. The theme of our year so far has been headless regret. Many of our biggest deals this year have been replatforming brands that were on headless onto a Shopify theme for the same P&L reasons as above.
My current take is that in 95% of cases a hybrid approach - theme plus some react point solutions get you 99% of the gain with 20% of the risk.
That said, I do think there are times when a true headless architecture makes sense. I call them complex commerce use cases. We’ve done headless a few times and in each case, it’s for a non-standard approach. A children’s gaming and commerce platform, a creator-led beauty marketplace with creator payouts, and an NFT-based membership eCommerce brand. We’re currently working on one for a complex subscription box brand.
But these are rare use cases. I think a brand’s job is to create innovative and problem solving products and get them from point A to point B. I don’t think brands wake up in the morning and want to be software companies - which is effectively what you become with such a complex technical infrastructure.
Migration or replatform is a scary word for a brand to hear. How do you guys manage those client fears?
It's scary to me too. It's painful. It's fraught. But like anything worth doing, it’s hard. Outside of the normal good business practices around minding data migration, SEO concerns, and customer data - I’d say one thing that separates us is our commitment to the sitewide A/B test. As far as I know, we’re one of the only agencies to do this (or so we’ve been told by some clients).
So we allay their fears by plainly stating that redesigns are not guaranteed to be a success. And anyone who’s gone through a few knows that. We don’t pretend that we have the magic bullet. So to de-risk the migration, we’ll run a sitewide A/B test to validate the performance of the new site. It’s a simple redirect test where we send 20-50% of all traffic to existing Magento site to the new Shopify site. Same visitor channel mix. We then monitor sitewide performance (particularly for new customers). This gives everyone tremendous confidence in the new site.
A story. We have one holdco as a client that we did 5 Magento to Shopify migrations for during a 24 month period. For each one, we ran this playbook. In 3 of the 5 cases, the new site outperformed the previous one, on day one. In the other 2 cases, we worked with the client to identify areas of improvement and rectified them before going live. It really drove home the value of this approach.
What do you think Adobe’s acquisition of Magento (and Figma) will have on their potential growth?
I'm not really one to predict the future of companies. I don't pretend to know this type of stuff. That said, the acquisition of Figma felt obvious (Adobe needs the top design tool). The Magento acquisition did not seem so.
I have owned Adobe stock for years simply because I think it's the design suite for every professional. I think they'll continue to grow because digital design continues to grow and Figma feels like a juggernaut.
My sense is that Shopify is and will be the dominant commerce platform for the next 10 years. Do you agree or disagree?
Agree. Turns out e-commerce software was winner take all just like Apple, Google, Shopify is the one. You can fight it. You can make edge cases but the market cap, the features, the brands, the volume and the growth are unfuckwittable.
Every week I meet with potential clients who think sbout e-commerce all wrong. Which is to say, they're mired in platform struggles that simple don't exist on Shopify.
What Magento to Shopify success stories have you guys been involved with?
I mentioned a number of them above. Each one of those 5 migrations outperformed on the new platform with the metrics to support from the tests.
We migrated Earth Shoes to Shopify pre-acquisition. A home goods brand from Magento to Shopify. Shortly, we'll launch a huge Magento migration for a Top 10 jeweler in the US and a few months later, the category leader in audio electronics. 9 figure brands led by forward thinking technologists.
Thanks, Xavier. You’re a legend 🙏