Elevating the e-commerce experience: Well.ca's Ali Asaria

On April 2, Torontonians awoke to a North American first awaiting them in an underground concourse downtown: a virtual store launched by online health-and beauty retailer Well.ca.

As curious commuters encountered the store on their way to work, Ali Asaria, Well.ca’s CEO, stood back to take in their reactions.

As they began to smile, so did he.

The experiment, in which walls were plastered with images of store shelves stocked with common household items, allowed shoppers to use their phones to scan products for purchase and next-day delivery to their homes.

As traffic to Well.ca’s four-year-old site soared, it confirmed what Asaria has long known: that the shopping experience sucks for a lot of Canadian consumers, and that they’re ready for a better way.

Successful as the virtual store has been, Asaria says his company, headquartered in Guelph, Ont., is just getting started.

We sat down for a chat at the Communitech Hub in Kitchener’s Tannery complex, where Well.ca keeps a development team, to discuss Asaria’s ambition to re-engineer the e-commerce experience at home and around the world.

Q – Let’s start with a brief sketch of your life and career.

A – I’m 31 years old, and I was raised in Guelph. I was born in a hospital in Toronto, but I always lived in Kitchener and Guelph.

I went to university at the University of Waterloo and studied computer engineering there.

Very early on, I think my second job in co-op was at RIM, and I kind of got in at a very junior job on something called Engineering Development, which was working with third-party developers. So, it was kind of like the App Store at that time.

That would have been ’99 or 2000.

Q – So not long after the BlackBerry was introduced?

A – Yeah, it was before there were (BlackBerry) phones, for sure. It was still a two-way e-mail device, and I was there during the time when the phone actually launched.

My senior developer or manager there was named Tony, who now runs our software department at Well.ca. That’s where we first met.

At RIM, I think I spent every co-op term other than one there, so I spent a lot of time there; maybe four co-op terms, and I worked in different parts; in hardware development, then in software engineering in Mississauga.

I really liked my time at RIM; it was during a time when it was growing really fast and it was a great place to be. It was really a place that was focused on talent, so you’d be working with some of the smartest people in the region.

It was definitely the kind of place where, when I got my first job there, I would call my family and they would tell all the relatives. This was a place that had a lot of prestige associated with it if you could get in, because it was very exclusive, which I think changed a bit as they scaled up and had to hire as many people as they could.

I was best-known there for making BrickBreaker. Because I was working with third-party developers, we would be encouraged to learn the development tools ourselves, and so I had made this little game on my own time and it became very popular internally.

Q – Where did the BrickBreaker idea come from? Was it just a spur-of-the-moment thing, done for fun?

A – I was just goofing off, trying to learn the tools, because my job was to answer questions from external developers; to say, ‘Here’s what you do; here’s how you create the main application loop; here’s how you clear a bug.’

And so, I was learning it and I wanted to actually build something, and at that time with the BlackBerry, it was the first time it had a screen. It was 160 pixels by 160 pixels and it was only black and white; there was no grey.

Basically, I learned from Tony that you could try to make games, and we were kind of competing internally, to see if we could make something popular, and he made a game called Hockey Pong. So, I kind of learned from him.

I actually remember getting in trouble at RIM. They said, ‘We don’t want to have games on these devices because we want people to associate it with business only, and we don’t want people to think of it as a general computing platform that you can do anything with; it’s a business device.’

It was only internally that my friends were really encouraging us.

At one point I remember Jim B. (Balsillie) got hold of the game and he really was addicted to it. It became very popular internally.

I was actually trying to make a joke, and it was a silly game in that I would add lasers and stuff…but it was something that I was just passionate about. I would be working on my own time, and I learned this idea of building something because you are passionate about it and have this kind of geeky curiosity.

That can really take off if you put your heart into it. And in the end, at one time, it was the most popular mobile game in the world. It was on 50 million devices.

So, it was neat to see that scale that came out of me not really thinking about trying to build scale, but more just trying to build something that I was passionate about.

Q – Tell me about Well.ca and how it came into being.

A – I worked at RIM in Mississauga after I graduated, and I had only worked there for about four months when I decided I wanted to do something on my own.

I was still young; I graduated in 2004.

And so I actually moved back to Guelph from Toronto, and hunkered down in my dad’s pharmacy, and basically used a room in the back. I thought, ‘Maybe I’ll make websites,’ that sort of thing; I didn’t really know what I would do.

That was kind of the birth of Well.ca – me trying to learn how to do e-commerce, and being already in my dad’s pharmacy, I said ‘Why don’t we try this?’ That was really it.

I hired another person to help me pick and pack boxes; it was actually a person who was working in my dad’s pharmacy who I kind of poached from him.

We were answering phones and I was writing the software, and we kind of did everything ourselves.

It was different from how you normally think about the beginning of a startup, like raising money and hiring a bunch of software developers. It wasn’t like that at all; it was very much me just trying to answer phones and write software in the beginning.

But, in a way, that was good for me, because I learned how to do all the parts of e-commerce myself.

Even now, when I go into customer service or if I go into the shipping warehouse, I can speak to those people and say, ‘You know, I did this; I did this in the beginning.’ I actually had to pack all the boxes that came in at one point.

It helps me connect with the different departments, but also understand how everything fits together.

Q – When did Well.ca officially become a company?

A – I incorporated the company in April of 2008, and since then, we’ve had a lot of staff growth.

We had two people when we started and we’re about 75 people now.

Q – And you have multiple locations?

A – Yes. Our big office is in Guelph; that’s where we do all our customer service, shipping and warehousing.

Our development office is here in the Tannery, with about 15 software developers here, and we have an office in Toronto, with about the same number of people in marketing and merchandising.

Q – What about revenues?

A – We never comment about sales, but we’ve been having double-digit growth every month for the past four months.

Q – How about funding?

A – We’ve raised most of our money from our angel investors. Probably our most well-known angel investor is Jordan Banks; he’s now the head of Facebook Canada.

And then, just in December of last year, we raised $3 million from iNovia in Montreal.

Q – You made quite a splash recently with North America’s first virtual store. How did the idea come about and what has the response been?

A – As a company, we always see our role as trying to bring the future of shopping to Canada.

I think a lot of times Canadian consumers have accepted the fact that we always have kind of second-class shopping here. We look at the U.S., whether it’s in e-commerce or in the bricks-and-mortar world, and say, ‘Oh, they have all the stuff that we don’t have.’

So, what we were really trying to do was say, ‘What could we do that would really inspire Canadians to imagine what shopping could be like in the future?’

We were really inspired by stuff that we saw on YouTube on companies in Asia doing stuff in this space, and so we said, ‘Hey, can we do this internally? Could we build all the software internally and make it work on every platform, including BlackBerry? And could we do this in a very short amount of time?’

We weren’t even prepared for the kind of reaction we were going to get; it’s just been tremendous.

Q – Tell me about that reaction.

A – For the first day, I honestly just stood in the back and watched people.

I think a lot of people understand the connection between what we do on the website and the wall, in terms of bringing the store to you so that you no longer have to walk to a store any more. This idea of carrying bulky diapers, that goes away. The store comes to you and you just order those things and they get delivered to your door.

That theme works well on the site and with the virtual store.

Also, one of the primary goals of Well.ca is to kind of make people smile, and it’s neat, because I watched people interacting with the virtual store or walking by, and I just saw their faces light up.

There’s a sense of wonder; it kind of feels like going through an art exhibit or the Science Centre because it feels like you’re looking at the future.

I love that; I think it speaks well to what we’re trying to do as a brand and as a company in terms of really getting Canadians excited and feeling proud of what we have, in terms of quality of shopping.

Q – Have you moved a lot of product because of the virtual store?

A – Absolutely. This past week has been the most traffic we’ve ever had on our site, ever. If you watch, you’ll see just a ton of people interacting with the actual poster and buying through their phones.

Really, that’s neat for us, just to see the number of transactions on mobile devices go up. It’s interesting, because before this virtual store, 15 per cent of our transactions happened through a mobile device, even though our site right now isn’t mobile-enabled; we don’t have an app out and the site isn’t designed for a mobile device.

So, this is one of the first steps we’re making where we’re really betting heavily on mobile and its role in shopping, especially shopping in our category, where it’s things that are just in your home.

The idea of walking around in your home and being able to swipe, swipe, swipe and buy a bunch of things that you’re missing, on your iPad, that makes a lot of sense.

Q – Is this a kind of hybrid store and ad campaign, where the cost of the store is defrayed by the makers of the products displayed in it?

A – Yeah, absolutely. If you look at the poster you can see that a big part of the real estate is actual products.

We were able to work with these brands to say, ‘Hey, we’ll be displaying your products very visually; help us with making sure we have the best pricing,’ and that’s the place where they can help a lot.

Definitely we did that, and we worked very closely, especially with Procter & Gamble. We like working with Procter & Gamble; they’re very forward-looking and they also want to move the bar on shopping.

I don’t think there are a lot of partners for them in Canada who they can work with who are willing to do stuff like this and can build it internally, so that helped a lot.

But it is neat, what you bring up. Is it an ad?

I was able to see a lot of the campaigns that were done in that same space before us, and people are just zooming by them; like, some ad for a television or whatever.

It’s interesting, because they often use QR codes where it’s a call to action, like ‘Install the app’ or ‘Go to our store’.

But this campaign is not just a reinvention of the store and the use of space, but it’s also the reinvention of advertising. There’s no longer a call to action in the ad saying ‘Go here.’ The call to action is that the ad is the store. So, to interact with the poster is to interact with the actual end goal.

It’s neat to think of how that reinvents advertising, and not just shopping itself. That’s fascinating, because all of this is enabled through mobile devices.

The idea that everyone’s walking around with this high-performance computing device in their pocket allows you to really reinvent the way space is used, both for shopping and for advertising.

Q – Was this a big gamble for you? Did it cost a lot up front to mount this?

A – We’re a startup, so every initiative we take, whether it’s writing software or investing time in marketing, is a big gamble, because it’s time we could have been using for something else.

But, when this idea came to fruition and we lined up our partners, it just made so much sense for what we’re doing and for what our brand is about. There’s no way we couldn’t have done it.

It works on all four platforms, so that took a lot of dev work, but the thing is, we have a great team. Had we tried to do this externally, it would have cost us a fortune, but because we have the kind of software team internally that can build this kind of thing, that was a big reason why we could do this cost-effectively.

Q – So it’s been worth it?

A – There’s no question about that; it’s totally surpassed all of our goals, and the amount of attention that’s been surrounding it just totally tells a story about Well.ca, about where we see ourselves in terms of retail in Canada.

I think a lot of big retailers are really surprised. It’s like, ‘Who is this company?’

A lot of them hadn’t heard of us before this campaign, and we really did something that, internally, they might have been reading about, but could never execute.

It shows something that startups can do that sometimes big companies can’t do; that sometimes it’s not just about cost and scale; it’s about the ability to do innovative things internally, using your team, and that’s something that we’ve really demonstrated.

Q – This brings us to e-retailing, which first appeared more than a dozen years ago. Back then, everyone was predicting the end of traditional stores as people moved online to buy what they needed. But in fact, most of us still go to stores, and many big Canadian retailers have scaled back their online operations. Why are you confident Well.ca will succeed where others haven’t?

A – I think there are two ways to look at that. One is, when I worked at RIM back in 2000, that was when mobile apps started happening, and there was a big bet. People said, ‘In the future, people will be carrying around computing devices and there will be this app economy,’ and it really didn’t take off. We could not get enough traction; there weren’t enough people with mobile devices and the technology was a bit ahead of what the public was ready for.

I think you’re seeing the same thing with e-commerce. A lot of the big promises, especially when you talk about groceries and that sort of stuff, were a bit ahead of what was possible. It was partly because of the technology available, but partly also just because of the consumer’s ability to adopt that new technology.

You’re seeing this new generation of e-commerce that’s really fulfilling a lot of the promises that people were guessing could happen 10 years ago, so the timing is right.

That’s one part of the answer, but the other part of the answer is that Canada has always just lagged behind the U.S. If you go to the U.S., you see so much more scale in e-commerce, in the sense of the percentage of retail that happens online versus Canada.

It’s an 8x difference, so there’s eight times more penetration of e-commerce in the U.S. than there is in Canada.

Then you arrive at this question, ‘Is that because Canadians will never be okay with buying online, or is it because they haven’t been given the options?’

Our position, obviously, is firmly on the latter; it’s saying the reason why Canadians don’t buy as much as Americans do online is that there aren’t enough options.

That’s where we see our role. This is where we really think there is the opportunity.

The last thing I can say is that, on the one hand e-commerce is an old industry on the internet; it’s been around for more than 10 years. But, so much has changed in the underlying fabric of the internet and the available technology that there’s an opportunity to really leapfrog past some of the companies that launched 10 years ago, by adopting new technologies.

A lot of the big companies associated with old e-commerce are so ingrained in their ways; they’ve built supply-chain and front-end website experiences that are so deeply ingrained in old technology that, for them to start using HTML 5, and really do mobile well, and enable forms of logistics that are only available now, is just too tough for them; they’re big companies now.

So there’s a big, big opportunity, I think. The thesis of Well.ca very much is about saying, ‘There will be large disruption in e-commerce because technology has changed.’

That’s where we see our role, and that’s where we have to prove ourselves in the next 12 to 24 months. We have to show that we can do things better than anyone else has done.

Q – Is part of this about the type of product being sold? Online shoppers are obviously more comfortable buying some items than others

A – Absolutely. What we’re selling is very much around the home, so we do very well in health, baby, beauty, and we’re moving into pets and some of those categories – the things in your house that are replenished.

The focus of Well.ca and the reason why we’ve had so much success is that most of the products we sell are things you’re buying frequently, but that you know. So, it’s kind of solving that problem of saying, ‘Look, I’m going to need Tide every six months at my house; can I just automate that order?’ Tide doesn’t really change and I don’t really need to touch it to know that I’m buying the right bottle of Tide.

Definitely, that’s the sweet spot.

It also makes sense in that the traditional space for e-commerce was around books and DVDs, and those forms of media are becoming digitized. So, this space that we’re in, consumer packaged goods for your home, is really the next space where e-commerce will be focused, and that’s where we’re focused.

But, we also want to solve some of those underlying problems that you hinted at; wanting to feel things and see them visually and actually get the three-dimensional aspect, and a tactile feel for those products.

Technology continues to improve, and I think there are opportunities for us to solve even some of those problems, and that’s what we’re excited about.

As technology improves, how can we make even those things better?

Q – What’s the next big step to really make e-commerce take hold, where it maybe hasn’t in the past?

A – The answer is mobile.

We often used to think of mobile as being something that you carry around with you as you travel. But, the neat thing about mobile devices to us is, not only do you carry around a mobile device everywhere you go outside your home; you also carry it around everywhere you go inside your home.

We live in a generation where you have a high-performance computer everywhere you go, that’s connected to the cloud and to the world. And the opportunity for shopping, and the notion of solving the problem of having to go to the store because you have this high-performance computing device everywhere you go, that’s the big opportunity in e-commerce.

If you look at examples of people doing e-commerce and mobile well, there aren’t a lot. I think that’s Well.ca’s big opportunity, and in general, the industry’s opportunity: combining mobile and shopping really well together.

Q – Does that mean we might see a Well.us, or are you strictly confining yourself to Canada for the foreseeable future?

A – The way we answer that question is, if you come into our company, we have a set of mantras, because we want to be very focused.

So, we have two mantras. One is, ‘Best e-commerce experience in Canada.’ That means the front end of the website, the customer service, how quickly (product) gets to your door.

But, in the process of building the best e-commerce experience in Canada, the second mantra is, ‘Best technology in the world.’ So, this is the neat thing that we do differently.

If you go to other countries, you’ll see people building copycat websites of other e-commerce players that are doing well in the U.S., but we’re not interested in doing that. What we want to do is build the best technology that no one’s ever seen before.

And so, if you ever come into our dev office, you’ll see that there’s this constant discussion; as we plan new ideas and as we pick our focus areas, we’re always asking, ‘Can we do something that no one’s ever done before?’

That’s really our core focus, and that’s what I’ll be proving, basically, within the next 12 to 24 months.

So, the answer to your question is, as we solve the Canadian e-commerce problem, we’re going to build technology that solves global e-commerce problems, and then we want to licence or sell that technology.

Q – You’re a computer engineer by training, but like a lot of engineers and innovators, you ended up an entrepreneur, and those are different things. How do you reconcile the dual role of builder-of-things and businessperson?

A – I remember my first co-op term at RIM, when on my co-op report, my manager said, ‘Great engineer; needs to learn more about business.’

Actually, I was proud of that. As an engineer, I had been taught that avoiding business was a way to be a better engineer. But, the thing I loved the most in engineering was being able to control all the parts.

What I discovered, especially at RIM, was that business is a part of the product, because if you don’t know about the business aspect of it, if you don’t understand the consumer and how it fits into the corporate strategy, you’re actually not controlling the full product.

So, that’s what really motivated me to learn business, because I just wanted more control over the product.

The way I look at it now is that I’m still an engineer, and the company is, in a sense, the product. So, I want to build the best possible tool to solve a problem, and the company itself is a big tool.

Q – So engineer and entrepreneur aren’t really separate things, then?

A – Exactly, especially when you focus on the end goal.

My goal is to solve really interesting technology problems, and in order to do that effectively, you need to know business well.

That’s kind of where business fits in for me. It’s obviously secondary to engineering problems, but it’s necessary in order to solve end-user problems.

Q – How important was Waterloo Region’s tech ecosystem to your success?

A – I wouldn’t be in any other region in the world. This is the best place to hire engineers.

It’s not just about the quality of the engineers. There’s a certain culture of the engineers here, this focus on actually wanting to build great stuff.

You’ll see in some other regions, there’s kind of this vapid startup culture where people are moving between companies. That’s not the case here in Waterloo; I think there’s much more of a core engineering culture that really wants to do great things, and kind of a humble culture that is unique about Kitchener-Waterloo.

Q – You’ve already hinted at this, but what can we expect to see from you in the next few years?

A – One of the things I was taught was always to show, not tell, so I want to prove, through the things we release over the next 12 months, that we have the best R & D e-commerce culture in the world.

It’s gotten to the point where it’s the most exciting stuff I’ve ever seen.

I can kind of answer it in this way, too: People often ask me, as a company scales, don’t you miss the original startup culture of being able to build new stuff, and do R & D? And the cool thing is, no; it’s actually the opposite for us.

With our scale now, for the first time ever, we’re filing patents, we’re doing new research.

If you come into our office, you wouldn’t believe; there’s lasers, there’s robots, there’s 3D. We’re doing the things that we never could have imagined being able to touch before, because for the first time, we have enough scale and experience in the space to actually move the needle on technology.

A big, big focus for us is to release new R & D, new patents, and I’m more excited than I’ve ever been.