Brianne Garcia

Infinite books, fast shipping, free streaming, fresh groceries: What kind of company is Jeff Bezos building?

Who in the world would try to build a competitor to this strange amalgam of hugely expensive and hardly profitable services?

No one. And, for Bezos, that is precisely the point.

Bonobos used to spend more on online marketing — particularly social — but it just didn’t scale. It wasn’t getting them their best customers either. The best customers spend $300 in their first orders and repeat shop, and they almost never came through display ads. In an attempt to get off the “growth crack,” he’s cut marketing from 30 percent of net revenues in 2011, to below 20 percent in 2012, and now 10 percent.

…The growth, the decrease in what Bonobos pays for customers, the retail strategy, the funding, and the spin off all come down to what Bonobos has done around brand. It’s a frustrating word every ecommerce company is throwing around these days, that’s nearly impossible to measure or quantify. But this whole wave of ecommerce companies hinge on an ability to build a brand that consumers love, not simply competing on cost and convenience like the first wave of shopping online. Brand is the unsatisfying answer to what sets most successful ecommerce 2.0 companies apart from the ones who are starting to fade– not celebrity endorsements or sales gimmicks.

Condé Nast lads $20MM investment in e-commerce site Farfetch.com.

Farfetch, founded by Mr. Neves in 2008, puts its e-customers in touch with 250 boutiques globally, seeing itself as a curator of the 82,000 chosen products. It said that its 150,000 customers in 140 countries spent $680 on average per order.

Note: would be interesting to see comparison of number of Farfetch customers vs number of Condé magazine subscribers, and the customer lifetime value of each. This is likely a case in which loyalty > volume. 

James Bilefield, President of Condé Nast International digital said 

that he was seeing a global convergence in three different areas: content; the community that surrounds that content; and commerce, or the desire to purchase what you are reading about.

I bold the last phrase, because that was a major goal of Parceld, to close the gap between inspiration/input and purchasing/output. 

‘’The merging of e-commerce and media is still not cracked by any company, although I think there are businesses with e-commerce that have great editorial content and Net-a-Porter is an amazing example,” he said. “But in essence they are in e-commerce.

“Then there are great magazines and media businesses, digital on and off line, that have tried and not cracked e-commerce. To be honest, we don’t know what the formula is and it will take a couple of years before anyone comes up with the right one.”

Ding ding ding ding ding. 

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.  

Journalists are among today’s most savvy social media publishers. They’re nimble and timely and have strong voices. They are constantly consuming content to learn and test the best art, copy and topics. They’re master storytellers and suss out a narrative with even the most mundane set of facts.

Meanwhile, many brands are still thinking about social content months in advance and are applying old modes of content creation to a digital world that has no time for six-week flights or long production cycles. To keep up with the pace of the Internet, more brands need to start slapping together their social stories on deadline.

Content and commerce is heating up, folks. Not only will Gawker deal Gossip now, but products as well. I see the obvious transition for Jezebel, Lifehacker and Endgaget, but am excited to see what unfolds.