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Why Magento Commerce Acquired RJMetrics

4 minute read
Virginia Backaitis avatar

Big data and analytics are table stakes in the world of digital commerce. At least that is what Mark Lavalle, CEO of Campbell, Calif. based Magento Commerce, told CMSWire last week.

But they may not be living up to their potential. According to Forrester Research, companies analyze only about 30 percent of their available data — and fewer than 29 percent workers have enough faith in the insights gleaned from the analysis to take action.

The result? A big waste — of data, time, insights and, most importantly, opportunities.

What RJMetrics Brings to the Table

Lavalle, a former senior vice president of strategy and business development at eBay, wants to solve the problem. And his company took a big step in that direction today. 

This morning Magento Commerce announced the acquisition of Philadelphia-based RJMetrics, a seven-year-old cloud-based data infrastructure and analytics software provider. Terms of the deal were not disclosed.

RJMetrics brings three important things to Magento Commerce: first, a company, now re-branded as Magento Analytics, which provides a new way for customers to blend data from e-commerce platforms, advertising networks, event tracking tools and more. The goal is to give companies a holistic view of their customer lifecycle and the actionable analytics to run a data-driven business.

Second, a simple way for current Magento Commerce customers to seamlessly access analytics reporting capabilities and to then integrate them with enterprise-grade data sets across a broad array of applications. This way, they can consolidate and analyze data for effective multi-brand, cross-channel reporting.

And third, a more democratized data experience. RJMetrics was designed with line-of-business workers in mind. "It's self-service analytics," explained Lavalle. "Workers will be able to use a light touch or access sophisticated tools, according to their capabilities and according to what is needed."

A Look at Magento Analytics

The key capabilities Magento Analytics will bring to both business-to-business and business-to-consumer merchants include:

Learning Opportunities

  • Marketing Campaign ROI:  Insights into campaign performance to continuously tune and optimize campaigns and allocate marketing spend
  • Advanced Customer Insights:  Customer lifetime value, repurchase rates, inactive customers, churn, cohort analysis, and other deep analytics to truly understand customers
  • Improved Segmentation and Personalization: Customer insights allow for more targeted promotions and merchandising, allowing Magento merchants to sell more
  • Better Merchandising and Shopping Experience: Insights into item, page, placement, promotion, and channel performance will enable merchants to continuously optimize digital shopping experience and performance to increase sales and gross margin
  • Multi-Brand, Cross-Border Analytics: Insights that will allow smaller merchants to compete against bigger competitors
  • Intelligent Sourcing and Inventory Optimization: Integration to the Magento Commerce Order Management solution will improve sales and margins due to improved cross-channel fulfillment and inventory balancing resulting in fewer in-store stockouts and costly markdowns

How Analysts See Magento's Buy

This probably isn't the first or last deal of its kind, according to Constellation Research analyst Holger Mueller. Consider that Workday bought Platfora last month. Mueller told CMSWire that analytics startups are ripe for acquisition for a number of factors.

"Analytics companies have to show that their product works and the reality is that they will never work 100 percent of the time ... (but with analytics)  it's good to be at 70 percent to 80 percent," he said. Mueller explained that this is new for traditional enterprise decision makers who are used to procuring things that work 100 percent based on RFP.

That makes for long sales cycles and lots of customer education and startups don't always have the available resources to wait.

Mueller pointed out that transaction companies, on the other hand, are being lured/forced into such things as big data, predictive analytics and machine learning. "It is the buzz," he said, adding that analytics companies are cheap, "so they buy."

Mueller's colleague R. Ray Wang offered a slightly broader point of view. "Every company needs an analytics backbone," he said, noting that software companies in the cloud will evolve into insight networks by 2020.

Both Mueller and Wang agreed that getting analytics "right" is what matters now — a sentiment with which Lavalle undoubtedly agrees with.

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