By Jack Peat, Editor of The London Economic
Watch Shop is symbolic of how evolutionary pressures on the ecommerce market could manifest themselves in the future.
It wasn’t until a recent musing on the London Underground that I realised the potential of specialisation on the web. An advert for Watch Shop – a specialised ecommerce store operating within a hugely diverse market – had me pondering how the ecommerce market is likely to look in the future. It seems probable that, as the true colours of the ecommerce market shine, retailers operating online will become far more focused, catering for the direct needs of the consumer and the express requirements of internet mechanics.
Like all digital industries – newspapers included – one must be careful not to pay too much attention to how the market looks right now, but rather project how it is likely to look in ten years time. What works today isn’t likely to appeal to our children and is even less likely to be relevant to our children’s children, and so having the foresight to predict market moves in a rapidly evolving ecosystem is key.
Early online ventures are largely replicas of their traditional counterparts. As I recently told a conference at Leeds University (presentation can be seen here), most industries use the internet to simply project the same offerings online, rather than adapt to their new surroundings. But as consumers become more attuned and comfortable to using mobile devices and living their lives on the web, this will invariably change.
Google the department store
The retail industry, as it stands, is very much about throwing spaghetti at the wall and seeing what sticks. It’s predicated on large numbers of people convening in central places and stumbling across what they need, rather than specifically targeting products. The focus is very much on the journey, rather than the end product.
Efforts to revive the high street have revolved around this concept. Flagship stores are becoming centrepieces in shopping centres littered with bars, restaurants and other ‘experience’ amenities. This is considered to be the way to entice people from their homes to town centres, in the same way pubs are having to up their act to better the cheap four pack that can be consumed at home.
The desire to have that experience is unlikely to ever die, which is why ecommerce and traditional retail could very well live hand in hand for the foreseeable future. What this does mean is that the two must take separate paths, ecommerce included.
In many ways Google carries the same traits as a department store. Everything is under one roof and accessible, with a transparent journey from desire, to find, to purchase. The internet, however, has relatively little in the way of user experience compared to traditional commerce, and people therefore have a tendency to be direct in their purchases, shopping for things they need, rather than what they want.
The ecommerce highways also work on relevance rather than desire. Search on Google ‘buy new watch’ and you won’t arrive at John Lewis, which sells watches among other things, but at a watch shop, or ‘the’ Watch Shop, which offers the most direct route to purchase. Specialisation on the web satisfies the very reason why people use it and complies with the inner workings of the online matrix. We could very well see more ‘specialised’ retailers moving into the future.
Live in the now
But not everyone is convinced about the value of looking too far into the future. Ross Macintyre, Head of Digital at a Pan-European Shopper Marketing agency believes adapting to current consumer habits is far more important than trying to predict how they may change in years to come.
“The beauty of online is that people operate within a ‘real time’ environment. You don’t need to look any further than Facebook and Twitter to realise this. Therefore retailers predicting 10 years ahead is counter productive,” he says.
“Bill Gates famously stated, ‘there’s a tendency to overestimate how much things will change in two years and underestimate how much change will occur over 10 years.’ Regardless of whether they are on or offline, retailers need to focus on being consumer centric now and offer a seamless brand experience that shopper’s expect today.”
Evidence of this occurring is commonplace. The financial crisis has taught retailers to value their customers and the online shake-up of the retail world has sent a lot of companies back to the drawing board. Ominpresence, multichannel and mobile are in vogue right now and offer tremendous opportunities.
In a world of constant change, it may well be one giant evolutionary leap at a time. Still, there’s no harm in looking down the line. You can survive in the now, but win big by looking in to the future; ask Bill Gates.