Magento and Retail: The Open Source Storefront

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In the mid-1990s, online shopping took the world by storm with the launch of eBay. These days, the average brick-and-mortar retailer has invested just as much time and planning into its online sales as its floor sales, and many startups skip the physical storefront altogether for a bright and shiny online retail outlet.

Well-developed software platforms are the reason these companies can create engaging virtual storefronts and bring in a wider range of shoppers. SAP Hybris and Oracle ATG are leading providers in this industry, but Magento is a strong competitor with a fantastic reputation. A well-ranked open-source e-commerce platform, Magento is used by online retailers because of high customization and effectiveness.

A Brief History of Magento

It is the sad case for many technology companies that older does not mean better, but this is not the case when it comes to Magento. Originally released in 2007, Magento has provided several versions of its storefront-building platform in the last eight years, eventually tailoring the software to be easily scalable for larger companies.

For the previous three years, Magento has been used by more internet retailers than any other platform, and it has been named the top e-commerce platform by Internet Retailer B2B eCommerce 300 Guide. Right now, Magento offers streamlined products for digital commerce, order management, and various other industry processes.

Perhaps the most important event in Magento’s history was its acquisition by eBay in 2011. Not only did this set it apart as some of the most effective online retail technology on the market, but it gave developers the financial boost they needed to continue improving the product.

In 2015, there was a massive eBay split that resulted in Magento being spun off as a separate company, independent from the online retail giant. This was in no way a negative statement on the current or future success of Magento, but rather quite the opposite. In fact, the company has retained its top spot as the preferred e-commerce software platform throughout 2015 and 2016.

Why Magento Is Valuable for Retail Outlets

Retailers trust Magento because of its high reputation in the industry. After using the platform, online retailers realize that there are many reasons to trust and employ Magento software in their businesses, including high functionality, easy-to-use administrative controls, intelligent development, open source code, security measures and customer experience.

Thanks to Magento’s open source code, the platform is highly customizable for every unique online storefront. Users can optimize the features to work with different devices with a minimum of compatibility issues while managing multiple storefronts from a single account. The platform includes a database using MySQL, 20 different payment gateways and various checkouts, including Google Checkout and PayPal Express. The choice in checkout options means an easier purchasing process for shoppers and higher sales in the short and long term.

How Magento Handles Large-Scale Traffic

The main improvement to Magento platforms in the last several years has been scalability. The software can be easily scaled across multiple servers, and recent testing by ScreenPages shows the following results in their performance testing (you can view the details of how they tested here):

  • Page loads of 0.5 seconds 90 percent of the time

  • 50,000 visits per day can be a handled on a small cluster of standard virtual servers running Magento software

  • Server response time of less than 1 second 83 percent of the time

Their testing included the following configuration:

  • 2 dual-core 4GB RAM load balancers

  • 6 quad core 12GB RAM web servers

  • MySQL database server)

WIth this setup, Magento could handle 50,000 visits per day.

How Magento Helps Retail Companies

One of the most important features of Magento is its ability to combine physical and virtual sales, helping retail companies keep track of accounting in a much more effective way. Shipment tracking integration is included for DHL, FedEx, USPS, and UPS, with real-time shipping estimates provided for Canada Post, Purolator, DHL, FedEx, USPS, and UPS.

It is free to download the Magento Community platform, which is an ideal way for retailers to familiarize themselves with the software and work up to an upgrade that can handle more transactions and server use. For retailers who want to talk with a developer and optimize the software in the most effective way, this is a good starting point.

Once Magento is fully integrated into your retail business, you can make use of some great extra features such as product marketing via a wishlist and Share Me! For products and services that are purchased by a specific subsection of shoppers, users can easily set up a correlated targeted marketing campaign straight from their account using applications like AddShoppers, Price Countdown, and Featured Products. These applications organize sales data and customer attributes so that the right ads and products are shown to the right people. Extra features include the following (plus about 5,000 more):

  • Free themes

  • eBay listing integration

  • eBay order import

  • Tax calculation

  • Subscription

  • Multiple product types

  • Multiple store access

  • Configurable products

  • Stock control

  • Statistics

  • Product import and export

New Magento Developments

At Magento, developers are always hard at work streamlining existing processes and looking for new ways to improve and innovate. Magento 2.0 ramped up the basic platform, offering the ability to process up to 39 percent more orders every hour, deliver real-time server response for catalog browsing, enable 66 percent faster server response when adding items to shopping carts and providing 51 percent faster checkout times.

There are also now 100,000 forum members who speak to each other about optimization, customization and the best ways to further develop the open source code. The success of these forums not only means quicker troubleshooting for users but also more streamlined development for future upgrades.

Downsides to Magento

For non developers, Magento is a bit of a tough nut to crack. This is not code that can be modified or understood by a weekend coder by any means, so companies need to work with a developer who can make the necessary modifications and customizations. For anyone not completely versed in the PHP Zend Framework, working with Magento is just a pipe dream. Even experienced developers may need to upgrade their skills to get the best out of this platform. Furthermore, an unseasoned developer may not be able to correctly set up Magento so that retailers can depend on it to perform at high speeds with heavy use.

The cost of Magento is another perceived downside, since at $40,000 to $100,000 for a custom site the company is charging more than other providers. Magento Enterprise is $15,550 while the community edition is free. To contrast, the price of a simple Shopify site ranges from $9 to $179. Simpler platforms may be cheaper up-front, but they will always remain basic in comparison – for this reason, Magento is a solution for large businesses with a development team.

Users also need to take into consideration the fact that Magento is not a hosted solution – the company does refer users to approved Magento partners that will host, however. There are ten partners listed on the website, including Peer 1 Hosting and Anchor. In addition to these partners, you can find unaffiliated web hosts such as Host Gator that will configure and manage the project for you.

Magento’s Largest Competitors

Magento’s biggest competitors right now are Shopify, BigCommerce, and WooCommerce. Magento is still listed as the number one choice of retailers; however the boost given to Shopify via Facebook and Etsy makes it an up-and-comer to watch in terms of popularity and real quality. BigCommerce supports about 40,000 online retailers while WooCommerce has been used to create at least 170,000 online stores. The availability, pricing and ease-of-use of these competitors’ platforms make them attractive to retailers large and small who have not yet considered working with a developer.

Pros and Cons of Magento’s Competitors

As I see it, the biggest positive attribute of Shopify is its alliance with Facebook. It is easy for small and large retailers to find the software, easy to set it up and easy to link to an existing Facebook store. The downside of Shopify is that most advanced features, such as those required to target certain shoppers and include detailed products, are only available at the App Store.

As for BigCommerce, it has a good tool set to help retailers from start to finish for marketing and building a great site. The drawback with this platform is a perhaps lackluster set of themes.

WooCommerce is available as a plugin for WordPress, which makes it a simple and obvious choice for WordPress-based sites. The platform features are solid and include a taxation calculator, various payment options, a cart function and a mobile view. The drawback with this software is obvious — if you are not a WordPress user, it is not for you.

The Future of Magento

Thanks to Magento’s intensive forums and the annual Imagine eCommerce Conferences, not to mention the emergence of Magento as a separate company, the future looks bright. In this industry, the mere fact that one company has all but cornered the market on internet retail for so many years says something great about its platform and its continued development.

Though it is now a separate entity from eBay, it remains in collaboration with its former parent company. Magento will continue looking for good ideas wherever they can be found and integrating them into the existing product catalog. The fact that the company remained dedicated to open source code is one of the main reasons for its continued success; the constant stream of updates, modifications, innovations and willing test subjects makes it easy to create popular, well-designed upgrades.

Mike Anand

Mike Anand

Mike Anand has over 12+ years of experience in Enterprise and SMB world spanning across leading mobile and software companies. In his current role as a Director of Product Marketing & Strategy for Business iQ at AppDynamics, he is responsible for leading global product marketing and go-to-market strategy for the product. Prior to this role Mike led Product team at Apteligent, a mobile APM company. He has also led mobile and cloud based subscription products and platforms at Good Technology, Adobe and Intuit. Mike received his M.B.A. from Santa Clara University and B.S. from University of California at Davis. You can follow Mike on twitter at