With WooCommerce Acquisition, Automattic Democratizes Content + Commerce
Automattic, the company behind open-source publishing platform WordPress as well as other web publishing companies, has until recently kept a pretty low profile. Prior to its most recent financing round in 2014, where it raised $160 million, the company’s leadership ran it as a break-even business. Nearly a quarter of all websites now use WordPress (full disclosure: Digital Clarity Group’s site is among that number.)
Now valued at $1.6 billion, Automattic has begun pursuing a more aggressive growth strategy, specifically in mobile, e-commerce tools, and a new version of WordPress.com. As part of that strategy, the company recently acquired WooCommerce for a reported $30 million. WooCommerce is a plug-in that enables websites to become online stores, and employs a “freemium” business model, where the basic version is free, and premium plug-ins are available. According to WooCommerce, it powers 600,000 WordPress sites and over 25% of online stores worldwide. And Techcrunch reports that WooCommerce is one of the top ten most popular WordPress plug-ins worldwide.
Those are some pretty impressive numbers for a company whose founders, three strangers in three different countries (one of which is based in Cape Town, South Africa, the company’s headquarters), launched the company only in 2008. The acquisition’s significance, however, lies more in the potential it has to bridge the content and commerce divide for small and medium businesses – an audience that recent acquisitions and alliance of CMS and commerce vendors have not had as a primary focus.
Content + commerce for the masses
To buyers, be they B2C, B2B, or a combination of the two, the transaction is an integral part of their engagement with a brand. This means ensuring that a brand’s beautifully immersive website, with informative content and stunning visuals, does not lead to a clunky bureaucratic e-commerce payment process that causes the buyer to say “never mind, I’ll just check on Amazon.” Advertising guru David Ogilvy understood this, and though he made his mark in the pre-digital era, his words still apply in today’s digitally driven world:
“In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create.”
Translated into 2015 terms, it is useless to have top-notch website content unless you can guide your buyer through the payment process without suffering massive dropout rates.
Some of the vendor giants in content and commerce have been taking steps to help organizations solve this conundrum. We’ve written and spoken before about the importance of blending content and commerce as a necessary pillar of customer experience management: see Tim Walter’s post about SAP’s acquisition of hybris and the webinar with Tim and Scott Liewehr on Sitecore’s acquisition of commerceserver.net. More recently, IBM and Adobe have announced further collaboration by integrating IBM WebSphere with Adobe Experience Manager.
This is all to the good for the large companies that can afford to pay for these vendors’ solutions, not to mention for the service providers to help them implement them. However, the vast majority of companies are not large at all. In the U.S., for example, hundreds of thousands of sellers worldwide rely on marketplaces such as Amazon, eBay, Alibaba, MercadoLibre, and others to sell their products, but those marketplaces are a barrier to sellers’ getting closer to their customers since customer data remains with the marketplace owner. The lack of that “last mile” connection to the customer means that sellers cannot create more personalized experiences and tailor their products and services to meet shifting customer demands. WordPress combining forces with WooCommerce will enable sellers to have that last mile connection.
But for sellers to take advantage of this opportunity, Automattic may need to become more visible and invest more in educating small and medium businesses on what they can potentially do by adding WooCommerce to their WordPress sites. This means more marketing, showcasing successes of premium customers, and maybe identifying key early adopter customers to help guide them to increased online sales. The company has done an amazing job of driving adoption to date via downloads of freeware, but helping its customers successfully bridge the content and commerce divide will take an additional, more visible effort.