So many trains of thought come to mind when I hear the word “ecommerce.”
Buying used vintage clothing on ebay, people shopping frantically for gifts the week before Christmas, Amazon, those old browser pop-up ads, advertising-stuffed Facebook feeds, and the continuously perpetuated dream of running a “hands-free” business from anywhere all come flooding to mind.
Does that seem about right to you?
So Close and Yet So Far
The internet is so commonplace today that even referring to the larger entity that is the internet seems archaic. It’s like someone asking you, “Where do you live?” and you answer by saying, “Earth.” Duh!
What I can’t seem to get past at the moment is the fact that our lives are constantly inundated with the internet. We use internet lexicons like SaaS, IP address, CSS, HTML, and search engine every day, and yet, there is so much we really don’t know.
How does the internet work, exactly? What is an IP address? Why do so many people have blogs? How do other websites know I just looked at that electronic toothbrush on Amazon?
Despite our lack of basic knowledge of some of these commonplace terms, new technologies are popping up every day. The capabilities that new technology brings to the table are, quite simply, amazing.
Machines are even learning just like humans do. Machine learning, automation in almost every aspect, and higher consumer expectations are all on the rise. And we’re just getting started!
The Hegemony That is Amazon
It’s hard to not mention Amazon in any capacity when it comes to ecommerce. It isn’t merely because I make a living consulting sellers on Amazon as an experienced seller myself. Amazon is now the #1 Search Engine when it comes to shopping, even outranking Google, which is no easy task.
Because of their solid brand identity, they’ve completely changed the game in terms of what can be sold, how it can be sold, and the expectations that buyers have about their purchases.
Want your item delivered to you within the same day? Done. How about a private club where you get free shipping on everything, access to exclusive media content, and a whole day dedicated to serving you. Yes; we can do that.
As Amazon caters to the insatiable desires of its customers, I wonder when the limit of what’s possible will be hit? With Amazon’s NET earnings of over $107 billion in 2015, and $135 in 2016, they’re showing no signs of slowing down.
Amazon has broached the international marketplace as well, expanding to Canada, the EU, Japan, and even China.
However, even after acquiring a Chinese based book company in 2004 and eventually rebranding to Amazon.cn, Amazon has a measly 0.8% market share in the Chinese B2C ecommerce market as of 2016. They aren’t even in the proximity of the 56.6% market share that Chinese-Based company TMall currently has.
The Future of Ecommerce – 2020
Sounds far away but 2020 is just around the corner.
As the years seem to go flying by, the future of commerce in general, and more specifically retail, is pointing directly towards the internet.
Cyber Monday is taking on Black Friday as one of the biggest shopping days of the year. Black Friday sales are even moving online, as opposed to the typical “get up at 4 a.m. and almost kill another Walmart customer” schema.
With Amazon making up almost a majority of online sales and the momentum they’ve amassed with a constant eye towards growth, it’s no longer just about market share; they’re shaping consumer behaviors, local job creation, and even traffic patterns.
Have you seen unmarked cars rolling up to buildings with a backseat full of Amazon packages? Those are contracted delivery workers that are fulfilling the requests of Amazon’s buyers. Two years ago, they weren’t even on the road, which means your city’s streets and roadways are now being utilized because more of Amazon customers.
This increased demand taxes current local and state infrastructure, creates more demand for oil, and maybe even affects your commute home. Are you beginning to understand why this is bigger than just getting your package in two days? All these promises Amazon makes to their customers both directly and indirectly affect you.
Let me be explicitly clear; Amazon isn’t just a big player in the ecommerce game; they’re a disruptor. And what do disruptors do best?
Shake things up.
Retail is only the beginning. Their financial leverage has given them all kinds of opportunities for growth. AWS, Amazon’s Cloud-based services unit, is already taking in billions of dollars in revenue.
Content giants like Netflix and Spotify are feeling the heat from Amazon’s own on-demand media service, which is included with Prime membership.
The sky may not even be the limit, with the launch of Prime Air, a drone-based delivery service being premiered across the globe that will get your packages to you within 30 minutes or less.
In an age where convenience reigns supreme and Amazon is driving consumer choices, other retailers, be they big or small, are finding themselves adapting their business models or grasping for air.
In the same way that Wal-Mart eventually dominated big-box sales into the 2000s and even today by creating more products with better access for less money, Amazon’s rise is no different in it’s theme. A once small business in a new format grows to worldwide player; the ball has been served and the game is on.
Oceans of Opportunity; Sea of Dangers
Amid the burgeoning ecommerce industry, there are serious concerns about your privacy. This isn’t the “your mom driving her mortgage check to the bank because she doesn’t want her identity being stolen” type of paranoia. There are legitimate concerns.
Your data being sold to other companies, data-centers being hacked into by unscrupulous persons, and accessing your behind-closed-doors moments via the camera on your phone aren’t just a possibility; they’re happening.
Having capital and resources aren’t security enough. Target, Uber, Equifax; no one is immune.
This isn’t meant to scare you. Life is all about risk and reward.
Although, the odds are truly stacked in your favor. Even if you’re information is floating around on the web somewhere, only 5% of people get their identity stolen every year.
While the ecommerce industry is growing furiously, I also see a honey-do list from states that just can’t keep their hands off this amazing profit pie. Of course, when industries change so do regulations.
I’d just like sellers to hold onto as much of their hard-earned money as possible, keeping the hand to cookie jar ratio relatively low.
Where Do We Go From Here?
The future is a funny thing, since we can’t predict it. Insert story about flying cars and a Back-to-the-Future-esque theme that never came to fruition.
Ultimately we have to embrace the changes, unless you believe that you’re a true Steve Wozniak-type, in order to be successful. Refusal seems futile. Imagine how indignant proponents of horse-drawn plows must have felt in 1940s when tractors started to take their place.
To me the choice is clear; read as much as you can about changes happening in your particular industry, absorb this new knowledge, and hit the ground running.
It’s really an exciting time to be a business owner because what once mandated you to be in one place, day after day, is now completely changing. And the internet is your ally.
Growing with Purpose
Leveraging the resources of the internet means that you can start and grow a company in a whole new way. If your work is online, why not maintain every aspect of your business on online?
Whether you’re selling a product or your services; hiring, accounting, and communication can be started and managed digitally.
If you’re selling a physical product there are still obvious facets of your business that can’t be managed online, like storage and shipping. Right?
Companies like Legacy Supply Chain Services offer warehousing and distribution outsourcing. You can have your product shipped directly from the manufacturer to them, where they deliver the product to the consumer and store it until it’s ordered.
As your business grows, your responsibilities grow with it. Hopefully you hit a point where you can’t handle all the work. Maybe you have so much happening that you can’t get straight who your 10 am call is with and what product needs to be reordered by EOD tomorrow.
You should absolutely leverage the power of the internet by hiring a workforce that is capable and accessible. As a consultant, I’ve personally taken advantage of the extensive freelancers on the FreeeUp marketplace for help when taking on more clients, knowing I can’t take them on alone.
Typically, the hiring process phone call is short, maybe 15 minutes, so I collect my thoughts and questions beforehand to make sure I get the information I need to make the right hire.
What matters most when searching is the skillset in need. Before even looking for the right person, you need to have questions prepared on tasks to-be performed to determine their level of competency. It also wouldn’t hurt to throw some industry specific jargon at them and see how they respond.
Gauge their personality based on their level of engagement over the call and how easy it is for them to communicate. Do you feel comfortable handing over business-critical tasks to this person? If it just doesn’t feel right, keep looking.
When it comes to your business, you absolutely want the right fit both in skill and personality. Don’t settle for any less than the best. Be aware that you could even learn something from this person if they already have lots of experience in your industry.
As ecommerce continues to grow, both in its scope and share of the overall market, keep your eyes open.
As changes come down the pipeline, such as using machine learning and automation for advertising, test it. If it works; embrace it. If not, remain optimistic and keep searching for new technologies that are aimed at giving you a leg up on your competition.
Because the field of ecommerce is becoming saturated with companies wanting to sell to consumers, make sure your company’s brand is well defined and know your audience. Then learn how to speak to your audience.
Otherwise, you’ll just be swept up with the rest of the dust with that proverbial iRobot Roomba that was purchased on Amazon and received within two days.
Michael Maher is an Amazon Expert, Digital Marketer and Brand Strategist. As a passionate and curious small business owner, Michael has successfully run his own ecommerce company for 7 years and is now a full time consultant for other ecommerce business owners. He creates a customized plan for each client to navigate the murky waters of Amazon with relevant on-brand strategies and guidance. Check out his blog for genuine guidance on how to deal with entrepreneurial life and see him get social @mattersofthecart.