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Engine wants to fuel ecommerce in Arkansas

By    |   October 17, 2018, 1:51 am EDT

Ecommerce was expected to create a new class of successful small businesses, providing an accessible platform and easy connections with the right customers. The understanding was that since reaching the customer was easier and could be done more cost-effectively, ecommerce would level the playing field and help small sellers flourish. Shopify worked to make that dream a reality, onboarding small and medium businesses to its platform on the way to becoming an ecommerce enabler and unicorn. Now, John James – the Lafayette entrepreneur and formerly the co-founder of Acumen Brands in 2009, wants to recapture the essence of that dream with his Fayetteville-based company, Engine.

Engine is a conversion-focused ecommerce platform which offers end-to-end support to digital brands. In James’s own wordsThe rise of digitally native vertical brands like Glossier, Dollar Shave Club, Bonobos, Casper, Warby Parker, Honest Company, Harry’s and others have proven that a better, more powerful e-commerce business model exists. Engine is the tool that will allow the rise of similar direct-to-consumer brands by enabling them to build a direct, personal relationship with their customers, bypassing traditional wholesale and retail channels entirely.

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The ecommerce boom has shifted priorities

Shopify’s torrid growth continues, with its latest Q3 earnings reports showing a 58% increase in sales. The ecommerce enabler and marketplace company has achieved such growth by bringing in the buyers – now, bigger brands are spending more to cater to them. Nearly a quarter of Shopify’s revenue now comes from bigger brands as part of the Shopify Plus Product.

Shopify was initially created to make it possible for anyone to sell online. However, at a time when the company has made it remarkably easy for anyone to set up a digital store, it is getting better returns catering to larger companies. Their tendency to show a much larger volume of sales and requirement for greater logistical support increases the total sales on Shopify substantially, and are more likely to purchase Shopify’s upselling tools.

With Shopify focusing on larger retail companies, how can small and medium businesses still compete? It helps that the ecommerce market is showing no signs of slowing down. Retail ecommerce sales in Q2 of 2018 grew 6.4% over Q1 2018, and 15.4% of Q2 2017. Ecommerce is easily outdoing retail, which grew 5.3% over the same period. Further, spending on enterprise-level digital commerce platforms like Shopify and Engine is pegged at $6.6B in 2018 and is projected to grow to $11.4B in 2022.

What Engine brings to the table

The substantial growth of ecommerce today is being driven more by big brands than the medium and small businesses which hoped to be lifted to prosperity by this wave. By the end of 2018, Amazon is expected to capture nearly half of the US ecommerce market. The platform’s omnichannel move with 3000 cashierless brick-and-mortar stores as well as its own private-label push is understandably raising concerns among the sellers who use the platform.

Many of these companies are hoping to utilize technology and smart systems to compete. While automation is helping logistics and improving fulfillment, machine learning and data science are transforming the ecommerce experience by helping smaller brands. These technologies help optimize digital marketing operations, aiding mid-level sellers in competing for their share of the ecommerce pie. However, these are usually third-party operations – platforms like Shopify and Amazon were built before these technologies existed.

Engine, on the other hand, was designed to provide a complete ecommerce solution for sellers. The company claims to be building the next generation ecommerce platform, ready for the new drivers of ecommerce. In terms of features, this translates into the platform having built-in out-of-the-box reporting, CMS, and customizable transactional emails. A dynamic theme which provides greater control over the store’s appearance to the seller, as well as a tool to tag lifestyle products in larger images makes Engine better suited for Instagram-inspired visual selling.

Amazon gained prominence by making it convenient for customers to use ecommerce, proving that the concept works and turning into one of the world’s largest companies as a result. Shopify instead went for the seller, making it easier than before for them to set up their own store, creating a new category of service provider. This made them a $15B enterprise. Engine is looking to take this evolution a step further, and become a transformational entity in the ecommerce space.

By optimizing operations for sellers to such a large degree, Engine hopes to spark the new paradigm in ecommerce. According to John, what adds to the potential for growth is that the current platforms are dated, both in their look and functionality. They haven’t been built with mobile browsing in mind, and cannot be conveniently integrated into social networks and other lead generating platforms. An efficient and new platform which offers a better mobile browsing experience to customers and is more seamlessly integrated into their social media browsing patterns might be Engine’s game plan for success.

Engine today – growth, funding, and beyond

Engine is projected to make more than $1M in revenue in 2018, which is remarkable given that the company only had 3 full-time employees at the beginning of the year. The company raised $3.6M from undisclosed funders, but SEC filings have revealed two of them – Claiborne Deming, the Chairman of Murphy Oil Co., and Wirt Yerger III, a prominent businessman and politician.

When reached for comment by the Silicon Prairie News, James said –

After building and operating e-commerce companies for the past two decades, we’re excited to create a powerful, new e-commerce platform for brands looking to grow their revenue. We’re equally excited to do this close to the epicenter of global retail, just minutes from Wal-Mart’s corporate headquarters in Northwest Arkansas. Engine’s funding further validates the local startup ecosystem that has been gaining steam for the past several years.

For James and his co-founders Jim Kane and Blake Puryear, the funding is just the beginning. Today, Engine has 30 employees and two offices – in Fayetteville and Denver. Will the company be able to start a new retail revolution with the potential to dwarf their retail giant neighbor? Only time will tell.

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