You cannot afford to wait for customers to come to you. You need to figure out where they are, go there and drag them back to your store. - Paul Graham
On July 5, 2017, retail giant Amazon celebrated its 23rd birthday amidst great celebration. From a company that was founded as a result of "regret minimization framework," to being the largest internet-based retailer in the world by total sales and market capitalization, it has come a long way in a couple of decades. Today, the industry is so advanced that leaders are talking about virtual stores, augmented reality and artificial intelligence.
However, this perspective reminds us of the future developments in the ecommerce industry. How far the industry still has to go to test new growth initiatives, implement advanced technologies and improve the end-user experience. As ecommerce has matured and grown to be a huge multi-billion dollar industry, vendors and retailers are emerging with new things to test all the time. They are focused on targeting a defined set of customers in order to fill the gap they see in the marketplace for solutions that help the specific customer segments.
Where it all began
During the early times, market was very simple. The best and the surest way for a company to grow was to create new and unique products. From walk-mans to compact disks and new age gaming through Nintendo, there was a limitless scope for innovations and newness. As the industry was quite new to the world, there was literally no competition and companies found it easier to develop their business models to gain success. They just had to create something new, explain what the product did, demonstrate how was it better and it would be off the shelves in no time.
Over the years, creating a new genuine product has become quite a difficult task. With several other factors such as brand image, niche customer segments, demographics, Personalization and seamless experience coming into the picture, the days of simply coming up with new products and tasting success is long gone.
A key factor about internet is that it is a behavior changing technology. For example, people have been reading physicall newspapers for many years now. But the numbers have declined since digital news came into the picture. It is like once you get used to reading news online, it is very difficult to go back, or you don't want to go back- no matter what.
Ecommerce has grown in a similar fashion with retailers getting used to new and advanced methodologies and closing down on some of the old technologies in use. According to a report, by the end of 2021, 15% of the total global retail sales will be E-commerce.
A New age of Optimization
The present evidence from some of the leading ecommerce companies like Amazon, Etsy and Fab suggest that the ecommerce industry is likely to go beyond its own best and grow via optimization.In a world driven by mobile trends, optimization comes down to micro-moments which according to Think with Google include some of the factors from which companies gain competitive advantage.
Moreover, the behaviour of shoppers these days depends on promotional offers, targeted ads on social media and tailored content which the ecommerce marketers optimize to the smallest detail; including personalized notifications, purchase confirmations and other updates. Such messages play a huge role in generating repeat sales, increase customer engagement and better customer retention.
Fragmentation - The New Norm
Over the years, several major players in USA and other parts of the world have made a big move. They decided to push their products online to cast their net wider and drive revenue from both online and offline sales. However, the digital world has given the ability to access numerous buying opportunities to the consumers. This has created various business segments that cater to the needs of the consumers.
While a small eCommerce company might be excited about the low barriers for market entry, they are bound to face challenges when it comes to keeping up with the advancements in the market and grow subsequently. On the other hand, big companies are threatened by niche stores who are well positioned in the market to gain the maximum share. No matter on which side of the fence are you in, there is always an opportunity to gain and an opportunity to lose.
While growth is evident both at the top of the market and at the lower end, it is the middle of the market that gets affected and that is where the "battleground" becomes level. With the rise of digital content, the media usage of consumers has segmented based on individual requirements. Irrespective of the channel - mobile, social media, radio, web, podcast and TV - each has its own audience appeal, audience requirements and other special needs. A recent report found that ecommerce companies who monitor their media campaigns and other effective consumer messaging closely, acquire new customers at almost 4 times faster than the other companies. Media fragmentation is an advantage that a company has to use to stand out and be something else apart from the "average"