Redesigning E-Commerce Success: Lessons Learned at MercadoLibre

1. Don´t listen to yourself: successfully redesigningthe leading e-commerce platform in Latin America • Daniel RabinovichCTO • www.mercadolibre.com • @drabinovich

2. Agenda • Who we are (2’) • Why we were sidetracked • The Redesign

3. Who we are MercadoLibre (NASDAQ: MELI) is the largest e-commerce platform in Latin America and the 11th Retail Site in the world. • Hard data (2010): • 1.7bn pages viewed per month • ~50mm search page views /weekday • 3.4BN in GMVe • 697MM Total Payment Value • 84MM New Paid Listings • 39MM Successful Items

4. We lead in every market we operate in ComScore MMX – Latin America Retail ComScore MMX – Brazil Retail ComScore MMX – Argentina Retail ComScore MMX – Mexico Retail

5. Agenda • Who we are (2’) • Why we were sidetracked • The Redesign

6. First Rule of Usability: Don’t Listen to Users • The greatest usability barrier was the preponderance of cool design. Most projects were ruled by usability opponents who preferred complexity over simplicity. • Too frequently, I hear about companies basing their designs on user input obtained through misguided methods. A typical example? Create a few alternative designs, show them to a group of users, and ask which one they prefer. Wrong. • To discover which designs work best, watch users as they attempt to perform tasks with the user interface. This method is so simple that many people overlook it. Jakob Nielsen

7. How to get it right: watch instead of listen • Watch what people actually do. • Do not believe what people say they do. • Definitely don't believe what people predict they may do in the future. Jakob Nielsen

8. How we got it wrong: listened to our own needs • We claimed to focus on users… …but developed the ability to explain away many design mistakes in the name of revenues or features • We were really designing around two wrong principles: • Revenue generation trumped usability • Engineering challenges/feature richness trumped usability

9. By focusing on wrong principles we developed a series of “design anti-patterns” • Anti pattern #1: Charge for a good experience. • Anti pattern #2: If it brings eyeballs to site, it is good. • Anti pattern #3: If it brings revenue, then it is worth doing. • Anti pattern #4: All BU’s need exposure on the HomePage • Anti pattern #5: Complexity is a sign of feature richness

10. Agenda • Who we are (2’) • Why we were sidetracked • In-depth look at each anti-pattern • The Redesign

11. AP #1: Charge for a good experience • Revenue opportunity: charge for “picture in listing pages” • It was the most profitable “Optional Feature Fee” • Outcome: No pictures in search results for millions of queries…

12. AP #1: Charge for a good experience (II) • Revenue Opportunity: charge for “highlight your item” • It was the second most profitable “Optional Feature Fee” • Outcome: “Happy” sellers, overwhelmed buyers…

13. AP #2: If it brings eyeballs to site, it is good • Traffic opportunity: Add “harmless” content for Search Engines • Traffic opportunity: Users don’t even see footers. Let´s use them for something “productive”… • Outcome: loads of useless content that confuses buyers

14. AP #3: If it brings revenue, then it is worth doing • Advertisers want to be above the fold • Should lower featured items • Outcome: “hidden” loss of revenues from poorer conversion rates as a consequence of the ads

15. AP #4: All BU’s need exposure on the HomePage • Site is treated as real estate that has to be distributed among BU’s. Outcome: site overload

16. AP #5: Complexity is a sign of feature richness • Users demand hundreds of features • Should try to please everyone • Outcome: overwhelmed users

17. Solving these anti-patterns required much more than “Web Design”…

18. Agenda • Who we are (2’) • Why we were sidetracked • In-depth look at each anti-pattern • The Redesign

19. Get out of the Monkey Trap

20. Re-think the pricing model It was neccessary to fix revenue induced anti patterns Revenue streams Business Units Pricing Model

21. From “Featured Fees” to “Exposure Fees” There is no maneuvering room when there are “visual highlight” fees Old Optional Feature Fees New “Listing Types” allow cleaner results

22. Never charge for delivering a good experience Eliminated “Picture in Listing Pages” Optional Feature Fee Old version: paid pictures in listing pages Same Search Query with New Version(all pictures for free)

23. The real cost of advertising and communicating Minimizing the “vicious cycle” of visual competition Old Home Page New Home Page

24. Simplify, simplify Thoreau Slide inspired from a Chris Nodder Presentation

25. Simplicity first Keep what the users acually use, not what managers *think* is useful

26. Nothing is “harmless” Useless content on footers is typically added aiming to Search Engines traffic Previous Scroll Bottom (1024x768) Current Scroll Bottom (1024x768)

27. Velocity First Focus on HTTP requests and implementing CDNs. Oct 2009 Apr 2010

28. Use the crowd to help new users Favor the majority and make choices for them Automatic “zoom in”:Demand data was concentrated in “Players” and not “Accessories” Top Nav Bar for “Players”: Specific facets

29. Direct Operational Metrics Lowered bounce rates, decreased time on page and accelerated Successful Items

30. Agenda • Who we are (2’) • Why we were sidetracked • In-depth look at each anti-pattern • The Redesign • Wrapping up

31. Wrapping up… • User Experience goes far beyond “Web Design”. • Requires “true commitment”, usually from the CEO. • “Unstable Organizational Equilibrium”. Must apply force to achieve collaboration. • A/B testing is useless when evaluating dramatic changes. • Usability Testing is key. • Beware of HIPPOs (Highest Paid People´s Opinion). • Going after UX, everything could be changed. Even your business model.

32. Don´t listen to yourself: successfully redesigningthe leading e-commerce platform in Latin America • Daniel RabinovichCTO • www.mercadolibre.com • @drabinovich