The next wave of ecommerce

By April 10, 2013Amazon, Ecommerce

Jason Goldberg, Founder and CEO at Fab wrote an interesting post earlier this week titled The 3rd wave of e-commerce disruption: emotional commerce. For the historians amongst you Jason has commodity commerce as the first wave, which was all about bringing value and convenience to the consumer a la Amazon, and digital commerce as the second wave. I think I would bundle digital in with the first wave as it is still fundamentally about the same products but with more convenience and at lower prices.

But whether it is the second wave or the third wave I think we are at the start of a very interesting new wave. Jason calls it emotional commerce and describes it as ‘all about bringing emotional purchases online’. These are less regular purchases of non-commodity products where the purchase decision is thoughtful in categories like furniture, home accessories, fashion, art and jewellery (these are the categories that Fab sells).

Jason then lists the following three ‘principles which will carry the day in emotional commerce’:

  • Exciting merchandise – i.e. great products that get people excited and can’t be found elsewhere. Products that make people say ‘wow’.
  • Amazing shopping experiences – rather than the in-and-out-as-quick-as-possible of Amazon’s one-click commodity commerce, emotional commerce is all about getting lost in the moment, bringing the fun back into shopping.
  • Brand building – emotional commerce works best on aspirational sites where trust has been built over time.

This gels with a lot of things I have been thinking about recently. On merchandise side, recoupling design and manufacturing and the use of 3D printing and other technologies to make short run production affordable offers the potential for many new and exciting products, many of them personalised. The most interesting of these products will help us connect with the meaning and purpose in our lives. With regard to shopping experiences I think the opportunity lies in leveraging our extensive ‘digital exhaust’ to figure out what we might like and present it to us in an exciting and inspiring environment. I think the best of these experiences will be as much about learning as they are about selling. Imagine going into a top department store and having the best salesperson impartially guide and educate you without any pressure to buy – that is what it should be like.

I think brand will be important, but it will come over time as a result of providing exciting products and amazing shopping experiences. The best definition of ‘brand’ is ‘a good promise delivered’ and exciting products and amazing shopping experiences is certainly a good promise.

We are seeing small pieces of evidence that great products and amazing shopping experiences are the new drivers of growth – Fab’s success and the recent IPO of Moleskin are two that spring to mind – but innovative as they are there is space for all the examples I’ve seen to go much further.

  • Nathan Schor

    If the next wave is based on ‘leveraging our extensive ‘digital exhaust’ to figure out what we might
    like and present it to us in an exciting and inspiring environment’ then that seems like a more sophisticated version of the algorithmic targeting that is prevalent today. So it’s more of a swell than the tsunami that Jason claims
    it to be. To belabor the metaphor, the real oceanic change would come from a demand-driven model where customers ‘intentcast’ their purchasing intentions in exchange for cash rewards. You’ve posted on this approach, also referred to as VRM (Vendor Relationship Management), which is not only magnitudes more efficient, but also avoids the privacy intrusions inherent when sellers target customers. The most ‘amazing shopping’ experiences’ will naturally arise when the buyer initiates and subsequently controls the sales transaction. Counter-intuitively, *both* sales parties win, since each receives the benefit they respectively value the most – cash for consumers and more efficient transactions for merchants.

  • http://www.theequitykicker.com brisbourne

    Hi Nathan – you are right. I’ve been thinking a lot since I wrote the post yesterday on how shopping experiences might be transformed and whilst getting more sophisticated with current techniques will help it won’t constitute a revolution. VRM is one answer (probably ‘the’ answer in the long run) but the implementation challenges are such that I don’t think it is a practical solution for most ecommerce vendors today. In offline commerce the shop assistant asks the shopper some questions and takes in what they look like in order to make recommendations – maybe an online analogue of that process would help.

  • http://about.me/jeffreyrobinson Jeff Robinson

    Nice article Nic and I do agree. Fab a success? I would say the jury is still out (or should be) – Yes,oodles of users and cool products, but burning through tons of cash and loosing money every month. i.e. Not a sustainable business model…

  • http://www.theequitykicker.com brisbourne

    Agreed. They are off to a good start, but aren’t home yet.

  • Jonathan smith

    Next wave of Ecommerce will bring some new Ecommerce designs. The latest trend is good enough an is in huge demand but we can expect more.

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