Tim Kung

Given all the movement from Amazon lately and through my own experience in ecommerce via Mason Park, I thought it’d be fun to try playing fortune teller a bit – Where can ecommerce be headed in 2-5 yrs?

When we conceived the idea for Mason Park, we approached it with the mindset that mobile ecommerce was the next thing in ecommerce. We were right on some things (people browse a lot on their phones) but wrong on some other things (people can still shop a lot on desktops, particularly at work).

So how will things continue to change for ecommerce?

Here are my bets for how the landscape will change in the next 5yrs (or sooner) and what that means:

General Consumer Behavior

Reluctance to Use More Apps

Apps are saturated and consumers will not want to continue downloading endless apps for every shopping site and platform. The friction of creating new accounts and learning new systems will create an even higher barrier for new entrants as consumers resist downloading and trying another app. I believe we’ll see a shift where consumers will rely on fewer apps for ecommerce, where those apps will do more.

Communication Channels Continue to Change

This is an area where behavior has many directions it can go. Messaging has now become the defacto method of communication and we’re rapidly seeing an evolution in messaging itself. What was once just text messaging now includes emojis, photos, bitmoji, GIFs, AR, etc. These are changing the depth and behaviors of how people communicate. Chatbots are already proven with WeChat, and it’s reasonable to expect that consumers will continue to interact with chatbots more, especially as technology gets better. We’re in a position to have richer, more communicative, and more emotional communication – all in quick and easy ways, with both humans and with computers.

Expectation That Everything Can Get Delivered

Amazon has led the way with delivering all sorts of goods unbelievably fast and with low cost. Consumers are getting even more conditioned to expect that things can be delivered. A consumer may not want everything to be delivered, but the expectation will be that it can if they so desired. One could argue we’re already here, but there are still improvements required to get everything delivered effectively. For example, the delivery of high value, odd-sized, or perishable items remains a challenge in some cases.

Mobile First for Shopping. Everything Else is Secondary.

The behavior will be to check mobile devices first for shopping – for everything. Any other method of shopping is secondary to mobile. I believe consumers will fully expect that they can shop and buy whatever they want via their smartphone, in an easy and effective way. For example, mobile shopping is not the preferred method to purchase a new car right now. Purchasing a car has a lot of moving parts to it (eg. test drive, financing, negotiations) and there isn’t a dominant mobile solution available yet but I think consumers will expect it.

Consumers will fully expect that they can shop and buy whatever they want via their smartphone, in an easy and effective way.

Marketplace Shifts

Big Players Continue to Grow in Functionality

Amazon recently announced “Spark,” a shoppable Instagram-clone. Instagram is already a massive marketing channel for brands, and commerce has been rumored for a while. WeChat has already proven that chatbots and ecommerce can happen over text. Google is introducing AI visual search, which Amazon had similar ambitions for shopping purposes. Facebook has Marketplace.

 

The point here is the major tech players are growing beyond the core “sandbox” and incorporating more and more commerce features. I believe we’ll see me-too copycat features from the big guys, which might be able to muscle out other players, but we’ll also see some really cool innovative stuff. For example, Amazon’s Echo Look is a curious device that adds a new dimension to clothes shopping.

Major tech players are growing beyond the core “sandbox” and incorporating more and more commerce features.

Traditional Offline Guys Will Charge Hard Into Online

Walmart and Costco. These shopping giants full well know the threat of Amazon and ecommerce. I believe these two players in particular have the deep pockets and awareness to make huge efforts into online. Whether this is their own effort, partnerships, or acquisitions is yet to be seen.

At the minimum we’ll see some big efforts from them and I’d like to think they’re savvy enough to at least influence the direction of ecommerce. Walmart and Costco both have strengths and expertise that Amazon, Google, etc don’t have, as well as massive and loyal customer bases. The question is how and if they can leverage that. I’d love to see how Walmart and Costco could be leaders in the omnichannel future.

So what does this all mean?

Here’s my take on to summarize what we’ll see happen:

Predictions

Large Players Will Carve Out Their Own Slices of Ecommerce.

The sentiment nowadays seems to be that the “everything store” Amazon can quite possibly end up as the leader in all areas of ecommerce. I disagree.

With the expansion of what can be bought online, it only increases the various ways ecommerce apps need to adapt to selling these items effectively. For example, buying a diamond ring vs. concert tickets vs. financial investments all have different needs and processes. Sure, perhaps you can make them all available on Amazon’s interface now, but is it the best and most effective experience for the customer? No. There are better ways to buy these things.

It’s for this reason that marketplaces such as Poshmark or Farfetch have been able to have success so far. These sites/apps offer a better shopping experience for particular customer and product than what Amazon does. Because of the difference in consumer experience required (eg. communication required, information conveyed)  for various segments, I predict that the large players will carve out their own slices of ecommerce segments they can be successful in.

With the change in consumer behavior and technology, I don’t think anybody fully knows what the best way is to adapt the buying and selling experience, and that’s wherein the opportunity lies.

Big Brands Will Sell Through Platforms

The recent deal with Nike and Amazon is an indication of where things may go. Amazon is undeniably the best ecommerce company on the planet. If Amazon can do all of the logistics, customer service, etc better than a mono brand – and cheaper and with more reach, it starts to make more and more sense for a brand to offload the operational aspects of their sales to a platform like Amazon.

If Amazon can do all of the logistics, customer service, etc better, cheaper, and with more reach, it starts to make more and more sense for a brand to offload the operational aspects of their sales to a platform like Amazon.

What will be interesting is whether the brands will be able to maintain their branding and marketing through Amazon, or will they rely on their own websites to do this still. My prediction is that brands maintain their “store front” at their own sites, yet much of everything else will shift to Amazon.

Traditional Large Retailers Are Done

Traditional retailers such as Nordstroms, Macys, Foot Locker, etc (excluding Walmart and Costco) have neither the might nor technical know how to compete effectively online with Amazon.

If the value of a brick and mortar location is removed, the value of these retailers come down to curation, shopping experience, and service. Curation and shopping experience can be easily replicated when online. Virtually all of the products from these retailers are already available online from multiple sources. Amazon’s service in ecommerce is already a tough act to match, let alone beat. These retailers will have to find new value to offer consumers or disappear.

Some Niche Shopping Apps Will Rise

Consumers shop for a variety of reasons. Some shop out of boredom, some for entertainment, some for the social aspect, and some are completely just task oriented.

For example, I certainly fall into mode where I’ll set alerts and scan Craigslist for deals on items I’m looking for. There’s a certain satisfaction I get from scoring a great deal and it drives my behavior on Craigslist. My wife politely reminds me that the time I spend looking for items probably negates any savings I find. I then remind her that she has been known to spend hours browsing for home decor, as she’s motivated to find the perfect matching aesthetically pleasing item. To each their own. 🙂

The difference in motivation to shop will drive the appeal and design of various shopping apps.

Factor in the general changing consumer behavior, along with the varied needs of different shopping categories (eg. shopping for airfare vs shopping for antiques) and I think the opportunity for niche apps to grow and be successful will continue.

So while consumers will be more hesitant to try any shopping apps, the opportunity lies for an app that can capitalize on the core shopping desires, shifting behavior, and the needs of the particular segment to deliver a delightful experience that isn’t provided now. And this can all be done in the face of Amazon. There are already some recent ecommerce apps which have achieved massive growth, for example Wish, and it is likely we’ll see a few more to come.

The opportunity lies for an app that can capitalize on the core shopping desires, shifting behavior, and the needs of the particular segment to deliver a delightful experience that isn’t provided now.

With the massive growth of Amazon as well as the abrupt downfall of traditional retail, it starts to feel like we’re at an inflection point in the world of shopping. It’s obvious we’ll see big changes in the next 5 years and I didn’t even touch on the impact of voice technology, AI, VR, and IoT. That adds another dimension to everything.

In any case, in 5yrs time it’ll be fun to reflect back to the thoughts of 2017.

Disagree or have other perspectives? I’d love to hear them.