New Wave

When online jeweler BlueNile.com was ­looking to fill the position of senior vice president of marketing, it didn’t have to look far, though it did find its executive in what some might consider an unlikely hunting ground for a marketing chief: IT. Until this spring, Darrell Cavens was the company’s chief ­technology officer.

Marketing is an art and a ­science, but in an online environment where the outcome of every effort can be quickly measured, hiring decisions such as BlueNile’s suggest it’s the science that is increasingly moving to the fore. At the same time, new iterations of the applications needed to operate an e-commerce site are easier to wrangle, the result of deliberate effort on the part of application developers. That, in theory, reduces the demands on e-commerce ­marketers to be technology whizzes as well, requiring them to understand what the technology can do but not to program it themselves.

Straddling the split
Blue Nile’s story and the simplification of many formerly arcane e-commerce applications may seem to be opposing trends, but they’re both representative of what drives hiring at e-retailers today. Effective online marketing, now evolved far beyond the brochureware of earlier days, requires marketers to have a greater understanding of software and web-enabled technology than formerly, when the e-commerce function was firmly in the ­control of IT. Correspondingly, e-commerce technology developers today are producing applications that more readily put that understanding at the disposal of more non-technical specialists.

In a way, it was easier to write job descriptions for e-commerce positions in the industry’s early days, when IT was more clearly tech-focused. Today, the ideal candidate for retail-specific functions such as e-commerce strategy director, marketing director or CEO straddles the traditional split between marketing and information technology.

That combination can be difficult to find, as it represents a set of experiences not found on any ­traditional corporate career track and in few business school ­curricula. It also makes tracking data on what’s happening in the retail, e-commerce job market more challenging now than a few years ago, when tracking the job marketplace for specific IT skills that could span industries, such as abilities with different programming languages, was also taken as a proxy for retail e-commerce jobs.

“In the EC-nascent state, this was truly almost an industry and a function within itself,” says Marcel Legrand, senior vice president of strategy and corporate development at online job recruiter Monster Worldwide. “Now the classification of IT specialist within the retail world is mutating into a standard occupational code that doesn’t know where it sits. That’s not a problem, but at TJ Maxx, for example, they might say, my technology provider is the one is running the feature functions for buying online. At Best Buy, it might be very different.”

Confusion over skills
In fact, confusion in the hiring ranks over exactly what skills a specific e-commerce position at a specific company does require is something of an issue facing recruiters. “These days, these positions tend to morph into many different things not defined in a traditional company setting,” says Andy Stevenson, senior director of Crutchfield.com. “It’s hard to find the right blend.” Recently, Crutchfield took six months to fill a senior management position in web design and development and four months to fill the position of director of online merchandising.

Harry Joiner, founder of e-commerce recruiting firm Marketingheadhunter.com, which handled Crutchfield’s search, says the hardest employment searches are the ones where the retailer doesn’t really know what it wants. Take, for example, the case of an e-retail HR manager charged with filling the—for many—mysterious function of managing search engine marketing. “If someone doesn’t know the difference between natural and paid search, they’ll say they want a candidate who really understands Google AdWords and also organic search,” Joiner says. “That’s like saying they’re looking for a zebra but they want it to look like a hippo. They take a different set of skills to leverage.”

So how is an e-retailer to staff up for competing functional demands? Divide and conquer, experts say. Retailers that get it are coming to the realization that an effective e-commerce operation requires workers across a variety of skills. “You are seeing a bifurcation of experiences and talent. So the analytics person is not necessarily going to be very strong at technology, or very strong at marketing and promotions,” says Legrand. “E-commerce departments are now comprised of people across different skills sets. That means your e-commerce director will be versed in a couple of those, but he doesn’t necessarily have to be the person who writes Ruby on Rails.”

Dropping compensation
If e-commerce functions and responsibilities are spreading out across more people in the department, that could be one factor why compensation for some of those jobs has dropped since e-commerce’s earlier IT-focused boom days. The era before the dot-com investment bomb of 2002 saw big salaries, big hiring bonuses and big perks for high- and even mid-level executives with enough entrepreneurial spirit and tech knowledge acquired on the fly to work magic—or so the hiring companies hoped—in the then little-understood medium of the Internet.

But data from Mercer Human Resource Consulting’s annual E-Commerce Survey show the picture’s changed since then. For example, the median cash compensation for a top retail or wholesale industry e-commerce executive in 2002, an annual $375,000, has dropped to $248,600 in 2006. Compensation for other retail-specific e-commerce job titles has dropped as well, according to Mercer’s data. Median cash compensation for e-commerce strategy director dropped from $207,600 to $145,000 in 2006, while annual compensation from e-commerce marketing director dropped from $133,600 to $104,700.

What’s happened in the retail e-commerce job market between 2002 and this year to drive down some salaries from earlier times? The de-mystification of the web, the vagaries of the economy, and a change in compensation structure are all factors.

In 2002, the head of e-commerce in a brick-and-mortar organization was either a talented young ­maverick or “a very established person with a track record of being able to build something,” observes David Van De Voort, principal human capital consultant at Mercer. “At that executive level, you almost had to bribe them into going into e-commerce then, so they got some pretty big cash incentives.”

With the economy taking a dive between 2003 and 2005, median cash compensation for the top e-commerce job has settled at $248,600 in 2006, according to Mercer’s data, which De Voort compares to the going rate for a top divisional executive across all sizes of companies across a variety of industry sectors.

Mid-level recovery
Compensation for some other higher-level retail-specific e-commerce jobs followed the same track over the same time period. But other, more mid-level jobs, are paying more today than they did in 2002. According to Mercer’s data, median compensation for senior web designers rose from $65,000 in 2002 to $75,000 this year; for e-commerce marketing analyst, it rose from $49,900 to $73,600. De Voort says such growth represents normal growth for job functions in continuous demand over the last few years, with an extra boost this year from a strengthening economy.

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Another metric that provides a snapshot of the retail e-commerce job market is the time it takes to fill advertised positions. One title tracked by Gartner’s IT Market Compensation Study is e-commerce manager. In 2006, it took an average 2.7 months to fill posted jobs, close to the average of 3.0 months for all surveyed jobs. By contrast, in 2005 it took an average 1.9 months to fill posted jobs, compared with an ­average of 3 months for all jobs.

“My feeling on this role, like many others, is that it is ‘hot’ for a while, and then folks settle into these roles and there is either not a lot of difficulty in hiring or not a lot of movement,” says Diane Berry, managing vice president , executive programs content, at Gartner.

And the e-commerce job marketplace as a whole? “It’s a strong market,” says Joiner, from the perspective of doing nothing but e-commerce placements across a span of titles for the past two years. “I don’t see it slowing down.”

A maturing market
Settling down, but still strong: that’s one mark of a maturing job market sector. And though it might otherwise be a stretch to look for signs of maturity in an industry only about 10 yeas old, this is Internet Time. And there are other signs. For one thing, this industry now has enough ­longevity that, as in other industries, track record is a key criterion in ­hiring for mid- and high-level jobs.

“These positions are no ­longer about your technical prowess but your performance prowess. Employers are looking for quantified results,” says Legrand. “It’s not about whether you could create a safe buying environment online, for example, but about how your navigation and experiential development created growth year over year for products and services.”

For another, deep-pockets up-front signing bonuses of four and five years ago have largely given way to compensation packages that have a performance-based component tied to business results. With the more recent view of e-commerce as just another sales channel, pay structure is commensurate with the rest of the sales force. “If you can move the needle from A to B you are paid some sort of commission,” says Legrand.

While e-retailers now look for track record in filling higher-level jobs, they’ve also learned what to look for at the junior level. Unless it’s for a job title within e-commerce that manages the infrastructure that supports e-commerce, factors such as an analytical bias, rather than specific IT skills, can be a better predictor of job success.

Creative juices
A degree in statistics is one way to demonstrate such ability, but it’s not the only way into an e-commerce job. At Crutchfield.com, Stevenson looks for a particular quality when staffing junior level merchandising positions, that is, “someone who is able to measure their success, who likes to use numbers to measure how they are doing,” he says. On the web design and development side, a number of the junior hires are English majors. “A lot of the junior people have taken classes in it, dabbled in it, and discovered this talent. They want to exercise their creative juices,” he says.

When the intersection between technology and marketing is ­difficult to find in e-commerce job candidates, a company’s tenure online can offer guidance on where to place the emphasis when it must choose. “If you’re a small company without an existing e-commerce function, the first place to go is technology,” says Legrand. “There’s enough to be bought off the shelf to help you with the first version of how you go to market, so what you need is a technologist who can plug and play.”

But once a site has some tenure, its success relies less on technology and more on an understanding of timing, pricing, packaging, analytics and the customer experience. Site success is less a technical issue and more an experiential or marketing issue, which changes the nature of the ideal job candidate.

In the future, as individual sites and the industry as whole continue to evolve, the picture will change again, with development making e-commerce web technology still simpler, and the existing skills of new workers rising to meet the demand. “People coming out of business programs other than IT are already much more savvy about technology than they were five years ago,” says De Voort. “In the future, there will also be a huge difference in the technology available. The machines are going to be much more capable and cheaper. We’ll see more people who will learn to do more, and the technology will be there to help them do it, so you won’t need the technology specialist to help you,” he says.

Focus on the process
That raises the question: What, in such a future, will be the relation of IT to e-commerce? To come full circle, De Voort for one thinks IT might create more top e-commerce executives as at Blue Nile. But that’s not so much because of their expertise in particular technologies or systems as because of their expertise is something else: process.

“IT is a hotbed of process management focus as it attempts to be as efficient as it can be,” he says. “A lot of CIO and IT managers coming up are expert in managing process, and that is going to make them very capable executives in general because that’s the way of the world as you try to manage a business model.”