e-commerce

Images-1 I have been not only thinking a lot abut the e-commerce space these days, I am seeing a lot of new businesses in this area crop-up.  I like to look at this space in terms of history.  Lets go back to the 70's.  In the 70's the big department stores were built and it was definitely the shopping location of choice.  The chains of singular stores had not really exploded yet and the Gap took that to another level.  Although the first Gap store opened up in 1969 it was sometime around the mid-70s that they began to grow.  The rest is history with other verticals such as Banana Republic, Old Navy, etc. 

The 80's come and the market share for department stores starts to drop.  More companies are starting up stores devoted to one type of look from jewelry to clothing to shoe stores.  These companies start grabbing some market share in the retail space.  Many of these stores, including department stores, begin to produce their products overseas where they can buy items for less, sell at a lower price point with the thoughts of turning through more merchandise or making better margins.  The amount of merchandise on the shelves of stores is staggering. 

With the Internet, say mid-90's, people began to explore a variety of ways to create e-commerce from terrible ideas such as Ties.com to brilliant ideas like Amazon or Zappos (launching 1999).  Now the market share is split among even more companies in the retail space.  There is also the explosion of Borders and Barnes and Noble that is not only a bookstore but had figured out how to create communities with their local coffee shop and in-house events.  Local book stores are dying.  We also began to watch department stores consolidate such as Federated starting in the late 80's through the 90's trying to become leaner smarter organizations.

Perhaps it is the advent of the Internet, the world of social media, whatever it is the world has changed at lightening speed.  We consume information differently, we shop differently, we live our lives differently.  Not only that but the Internet has allowed us to find sites and communities across the globe that appeal to our only personal senses.  People have also begun to have a desire to return to their roots.  They want to support local businesses and buy their basics online.  Do you really need to go and see certain items?  It is becoming apparent through e-commerce that you don't. 

There are now businesses that are crowd sourcing cool lists of items that you can link through and buy such as Svpply.  Gilt group has captured people shopping for top bargains but has grown the company with other options for their customers such as Jet Setter.  I think of Gilt as the Loehmanns of the 21st Century although they have become much more than that. 

People don't necessarily want to spend their time shopping and wandering through department stores these days.  Live are frenetic and more complicated than the past.  People are looking for ways to go back to their roots and simplify their lives.  Buying on the net to make life easier and spending time doing something else on the weekend seems to be the direction that we are taking.  If department stores don't completely retool their business model they will find themselves way behind the times as Borders did by recently going into bankruptcy. 

There will be a slew of new e-commerce sites in the next year that will change the way we shop and communicate about our purchases as the communities we navigate towards become an extension of our own personal brands. 

Netflix is one of the genius moves over the past few years.  Launching to provide an easier approach to watching movies at home by getting your dvd sent to you in the mail as they saw the demise of local video shops.  They saw the writing on the wall when they began to see opportunities with companies such as Boxee and realized that people were going to watch their movies with a click of a mouse and they needed to have access to the Netflix data base on line.  They moved into that pretty quickly as a company and now they own that space.  More companies in the large brick and mortar models of old should spend a little time getting out in the world and thinking out of the box about the future of e-commerce or they too will find themselves out of a job.

How do people want to consume, how do people want to live their lives, how can data provide better information so we can become leaner higher margin businesses and what value can my retail operation provide for the community I want to reach.   The next couple of years in the e-commerce space will be very interesting. 

 

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