What is changing in the world of commerce and what is staying the same? I thought I would capture some personal thoughts here for a quick weekend read.
There are many concepts not changing in commerce. There are the basics of quotes, orders, invoices, receipts, products and services (things you can purchase), payments, tax, shipping, returns, etc. Many of these concepts have been around for centuries (even millennia). And they probably will be around even longer into the future. What is changing is the technologies to create these systems and the user experiences to access them.
One can argue whether monolithic vs microservice software architectures are better. That is not the focus of this post. What matters more to me is that different systems need to be woven together in different ways, easily and efficiently. The systems need to be interconnectable. There are and will continue to be specialists in fields with deep knowledge (e.g. for tax, shipping, email campaigns, etc). Systems must be able to inter operate with external services – that is not going away. I also expect to see implementation of such backend systems improve as they benefit from new technologies like machine learning (e.g. for inventory management optimization). So systems will get better, but I don’t see radical change in backend systems (or at least the fundamental models of commerce they support).
Where there is more change is in customer touch-points.
Sure, we have had physical stores for a long time, and that is still where most products are sold. Having an online presence these days is old news. Over time, consumers have adjusted and no longer see your online presence as separate to your physical stores – they see you as one merchant (one brand) with multiple touch-points. Systems have been improving to break down traditional silo barriers.
But there are many more touch-points a merchant can consider today. Here it is important for merchants not to think about how to adopt a new technology to their business, but rather to think about what their brand stands for, what experiences they want their customers to have, where there customers are, and then how technology can make it possible to reach them.
So what are some of these new touch points? Well, there are many technologies that have emerged in recent years, typically surrounded with a lot of hype that is beyond what they typically delivered. We have all learnt over time what is hype vs when they deliver real benefits. For example,
- Text only chatbots are generally terrible for product discovery experiences, but may be great for reordering or checking up on status of your deliveries.
- Voice is great, but where are your users going to be? I think voice is great at home – not on public transport, not in the office. Voice is suitable in private spaces, not public. Voice also suffers from the same challenges as other text only interfaces like chat – it is a bad experience for product discovery, unless you can couple it with a screen.
- Is VR applicable? Are we all going to build VR “virtual stores”? It is generally recognized that VR is great for “experiences” that strengthen a brand experience. But who wants to get your VR gear out to add milk to your weekly grocery shopping list? Sometimes great, other times not.
- What about 360 photos or videos? They can add to an experience without requiring a full VR headset to benefit from.
- What about AR for visualizing products in your surroundings, bringing up product information in-store, navigational aids, and more?
- The Internet of Things will continue to create new interesting opportunities – like simplifying reordering of water filters that expire every 6 months. How how to hook up with reliable purchasing?
- Marketplaces (Amazon, eBay, Alibaba) have been around for years and have no sign of slowing down.
Most of these touch-points are not new, but more technologies are emerging all the time. Do you need to get on that new social media app bandwagon? What about the new cool device that appeals to your customer demographic? If that is where your customers are, then maybe you do need to jump on early.
Personally, I see the real future challenge in commerce is diversification. As merchants (and their development partners) grow smarter and more experienced with these new technologies, they will learn when (and when not to!) apply technologies better. I expect to see more differentiation between merchants in how they apply technology. It already exists today, I think its going to expand. It is not “oh, I should have a web site because everyone else has one”. It will be more of a matter of I have a problem – oh, AR can help. For example eBay used AR to help work out what size box to pack something you are going to sell. The problem was not AR – the problem was helping infrequently eBay sellers to work out how to ship their sales more easily.
So I do expect to see the diversity in user experiences to continue to grow. I do expect the technologies around to continue to grow as well. Hardware is getting easier and faster (and more cost effective) to mass produce. This diversity will continue to increase the pressure on separation of “frontend” from “backend” through APIs. New user touch-points must be easy to add. Diversity in experiences will increase. Not everyone will need a cart to collect multiple items before checkout – just let me click “buy now” on a product – the app or device knows my billing and shipping details already. But if I have a regular weekly grocery purchase, just let me add items during the week and at the cutoff time just submit my order automatically. A shopping cart is sometimes needed, sometimes not. Sometimes transient, sometimes persistent across devices. There will continue to be the staples of commerce (physical stores, online stores, marketplaces, …), but there will also be more diversity in how merchants apply them to their business (such as physical stores where you can only purchase online).
The challenge for merchants then is staying flexible and able to adapt, and only picking the “right” technologies to adopt.