As compared to other large trillion dollar industries, ecommerce is only the sector expected to grow at a double-digit growth rate.
1. There are significant portions of the ecommerce technology value chain that are still unsolved by startups or legacy vendors.
We talk to hundreds of CMOs a year and they outline for us the set of challenges and opportunities for which they would love to find an innovative technology vendor. The list is long, but some of the examples they have shared with us include:
- Optimization of multichannel supply and fulfillment chains
- Streamlining of shipping and returns
- Better demand forecasting accounting for networks of regional distribution centers
- Reduction in the cost of product data and images
- Management of international sites, international demand generation, and personalization across countries
In many of these areas, Amazon is investing heavily and has consistently been the market leader. Everyone else needs to catch up.
2. The space is still extremely dynamic and is growing at extraordinary rates.
As mentioned before, the space is growing at 15 percent a year. But the market is also experiencing tremendous shifts in consumer behavior leading to exciting new opportunities:
- The growth of mobile as a discovery and commerce channel
- The intersection of offline and online and how multichannel players can effectively leverage the strengths of both
- The rise of social as a consumer behavior that has yet to be harnessed by ecommerce players in a scalable/high-ROI way
- The changing nature of payments and loyalty programs with new providers and mechanisms emerging
- The pressure of same-day delivery and the need to achieve lower cost ways to fulfill from using lockers to leveraging stores as distribution centers.
There has never been a more dynamic time in this space.
3. Over time, the definition of “ecommerce” is getting broader. Every business is an ecommerce business.
When many people hear the word, “ecommerce” they naturally think retail. However, every business leverages ecommerce/Internet technologies for at least a portion of their value chain. Whether it’s a bank offering credit cards, or an auto dealership booking service appointments, or a software company soliciting leads and prospects, or a restaurant displaying its menu, or a hair salon selling beauty products, or dentist booking appointments – they all need to leverage the web and mobile to attract, find, communicate, and service their customers. Whether the actual “commerce” transaction occurs on a digital device or with a sales rep or in a physical location is secondary and immaterial. What is material is that every business on the planet will need to invest in commerce-enablement technology to stay competitive.
Reading this makes me really exciting and has me contemplating some of the above listed problems/opportunities. I’ve always looked for problems in an obvious place: as a user, or from a customer’s perspective. But now that I have “a real job”, I have been exposed to another side of business: the sales side and the marketing side. And lucky for me, I get to touch both.
I want to revisit some of these issues, specifically the uncaptured social media opportunity for ecommerce and mobile’s role in online-to-offline purchasing.
Little fireworks going off in my brain.