As a startup nearly 10 years ago, Shopgate had a fairly easy mission: Help merchants set up a website and enter the promising field of e-commerce.
Today's Shopgate reflects the market's shift into multiple channels and connecting technologies, touting itself as a software-as-a-service provider instead of one specifically focused on e-commerce.
Austin-based Shopgate is not entirely different from other companies servicing the growing e-commerce and omnichannel space. They are part of a transformation that puts e-commerce merchants in an interesting quandary.
"We started as an e-commerce company, but we have opened up our platform to other agencies and technology partners to integrate, so we can build a solution that is tailored to the customer," Shopgate CEO Marc Biel said. "Essentially, we can add omnichannel functionality, and this is a market we want to build ourselves up in over the next year."
As much as any change, Biel points to the merchants embracing their own applications as the most significant of the past few years.
"Customers expect to buy things on an app, pick it up in the store, or pay for products they see in the store and have them delivered later to their homes," Biel said. "That all happens through an app on their phone and the merchant has to have things more connected, and the mobile device is the key to connecting those two worlds."
When smartphones became part of the consumers' world 10 years ago, not many e-commerce merchants predicted that their customers would be buying things from that mobile device.
"They thought no one would do it because the screen was so small, and maybe security would be questionable, but things got better and people began to notice that the iPhone and others were a big success and they became the norm for shopping," Biel said.
The shift in what consumers were using to research and buy products has led to the shift in merchant viewpoint, one that now more fully understands that an e-commerce site needs a mobile browser, the store needs its own app, and any type of brick-and-mortar presence has to have the look and feel to complement an online shopping experience.
Kibo, a cloud-based omnichannel commerce platform, has been in business for nearly three years. So it entered the e-commerce market at a time when merchants were starting to ponder their expansion options.
While concentrating on such common e-commerce features as catalog management, pricing, machine-learning and landing-page design, Kibo quickly found itself addressing a wider payments landscape.
"From a payments perspective, we are building our payment partners while also struggling with how the payments space can keep up with the omnichannel expectations of the consumer," said Jennifer Sherman, senior vice president of product and strategy at Kibo.
E-commerce merchants need payments technology that can provide the various functions that have become common in a multi-channel sales environment — where a sale can be salvaged because a customer has various options by which to buy online or in-store, or order-and-pay, depending on where their product is available.
"If a merchant is doing a 'save the sale' transaction, it may have to authorize the transaction in the store, but capture it for processing when the order goes out the door from another store or warehouse," Sherman said. "It all operates as if it were an e-commerce transaction."
In the same manner, a merchant may want to authorize a transaction and capture all relevant data that can be updated so that when a customer walks into a store, the merchant will know that customer is there to buy something that was just researched online, Sherman added.
"It's interesting to see an industry, in the payments space, that I don't know is entirely ready to kind of grow into this and see how it gets more complex when we layer on digital wallets and other payment solutions," Sherman said.
Still, merchants are increasingly understanding how omnichannel and mobile operates in a retail setting and they are getting a better viewpoint on how it could work on their sites and in their stores.
"In exposing application interfaces, a company like Stripe has really rolled back the curtain on the world of payments," Sherman added. "So there is not a lot of secret sauce anymore, and that means a lot of payment products and offerings are becoming increasingly commoditized."
It's not just the smaller e-commerce marketing and omnichannel service providers that are starting to hit the right buttons for merchants. In general, most payment processors have increasingly become full-service providers from equipment to security measures and, most recently, some mobile and omnichannel options.
"If you look at a company like Vantiv and what it is doing, you can see that it's all moving up market as well," said Thad Peterson, senior analyst with Boston-based Aite Group. "It will be more than just small business merchants doing this because as long as someone offers an enterprise-strength partner, there's nothing stopping them."
Vantiv recently acquired Worldpay, a move that strengthened the payment processor's continued move toward integrating digital payment capabilities and putting more focus on e-commerce and its growing channels.
Mostly, merchants remain "in the business of selling stuff" and they don't want a variety of vendors to provide services, Peterson added. "They need to have an online solution that works well and does everything they need it to do from the beginning to the end and as seamlessly as possible."