🔮 3 wishes for e-commerce in the 2020s

As CEO of Aiden #tunnelvisie is looming, so sometimes it's good to take a step back. And then the doubt can strike within half a minute. Ecommerce is going great, isn't it? What are we doing now as a small software company? Who are we to think of this then?

But then — then I'll shop online. And I'm right back in the “everything about this sucks” -zone. Yummy!

Wish #1: Smart, truly personal recommendations.

Yesterday I bought a soap dish Bol.com. Today, these are my “personal recommendations.”

“Is there something for you here?” — NO, CONVEX. I DON'T NEED ANOTHER 10 SOAP DISHES.

Why are these my recommendations if I literally yesterday have converted to this?

Well! Because e-commerce needs to be more personal, of course. Customer loyalty stuff and stuff. So, you take the simplest “more like this” algorithm that exists, build a page around it — With voila: your personal recommendations.

Pure laziness.

So, my first wish: smart, truly personal recommendations.

Wish #2: Know who you're buying from.

Once upon a time, there were stores where people thought about the products they bought. And whether those products were also going to be sold. Whether it was a bit of quality, what came out in the store. Because yes: nice if your customers keep coming back to you.

That is different in today's e-commerce platform economy. This is a game of quantity rather than quality. Put as many products as possible from as many providers as possible into a catalogue, and then shoot around them with as much hail (= advertisements) as possible sweet, sweet conversion rate of 2.6% to be achieved. And then just shove boxes.

In this model, who is responsible for the quality of the product? For the service? The delivery? If the fonQ helpdesk is to be believed: at least not them!

Here is a screenshot of my conversation with fonQ's Twitter helpdesk after a €90 package was not delivered:

According to fonQ:

You ordered via fonQ, from the sales partner. They offer their products via our website, but everything else goes through the sales partner himself. We are just the platform where they offer their products.

Right. I purchase the product on the fonQ website (with minimal attention to the “sales partners”), with my fonQ account where payment and processing are done by fonQ. But if you have any questions, please check the wall according to the cabinet.

So much for my business at fonQ. At least, that's what I thought.

That soap dish I ordered from Bol.com? That was delivered today. In a fonQ box.

fonQ! One of the “bigger players” of the Dutch e-commerce landscape. fonQ, that will make a profit for the first time this year. And that's just his stuff via Bol.com sells?!

What about FonQ?!

Or is it not fonQ, but just a box of fonQ? According to the label, the sender is “Brandsupply24”. Let's Google that one. This is, I don't know you, the complete Brandsupply24 website.

Okay, so fonQ, on the Bol platform. The fonQ of which I basically as a consumer, had decided not to buy any more.

Wish #3: Positive social impact

And that's the crux of the coldness of e-commerce in 2019: it's platforms all the way down.

Whether you're Alibaba, Amazon, Bolpunt.com, fonQ or MediaMarkt hot: as an e-commerce platform, you offload (almost) all your risks on — on the one hand — the affiliated smaller companies and — on the other — the consumer. A fantastic business model for those platforms, but a huge loss for society.

Society? Isn't that a bit pompous? No, hear. I refer to this New York Times piece by tech journalist Karen Weise (be sure to read the whole article!) :

“... to make it all work, Amazon runs a machine that squeezes ever more money out of the hundreds of thousands of companies, from tiny start-ups to giant brands, that put the everything into Amazon's Everything Store.

Amazon punishes the businesses if their items are available for even a penny less elsewhere. It pushes them to use the company's warehouses. And it compels them to buy ads on the site to make sure people see their products.

All of that leaves the suppliers more dependent on Amazon, by far the nation's top online retailer, and scrambling to deal with its whims. For many, Amazon eats into their profits, making it harder to develop new products. Some worry if they can even survive.”

What do we read in just 3 paragraphs:

• Platforms like Amazon run a 'pay-to-play' model on a monopolitical piece of the internet.
• The lowest price, on and off the platform, is not a differentiating factor, but a prerequisite for still participating.
• Small (er) companies that are forced to go along with this will break down anyway.
• Product development is taking the fall.

If that's not a negative social impact, what is?

To summarize: I wish us all a new e-commerce model.

My hope is that e-commerce will be gone in 10 years-pivot towards a model where quality, not quantity, is key. A model that still delivers super fast, but also pays attention to the “soft side” of being a good store.

My fear is that we have already gone too far in the current model. Because who can compete against the Alibabas, Amazons and Bolpuntcoms of the world now? FonQ apparently isn't.

Nevertheless, I see a bright spot: (almost) no one in the chain makes (much) profit in the current model. Shifting more and more boxes does not seem to lead to a truly scalable, profitable business model. All those long lists of product ads and all those huge distribution centers have barely increased the conversion rate over the past decade. Of the 100 people who visit web shops, 97 do not buy anything. And of those 3 who do buy something, returns up to 40% of an item.

Meanwhile, there is a gaping hole that no one has filled yet: helping people find the product that solves their problem.

If we look at the 2020's, I am convinced that that helping hand will make a difference. And that we get a better e-commerce model in return. A model where:

• The customer and her needs, not the product advertisement, are key.
• The customer is helped by experts in choosing the right product.
• As a result, the customer converts more often and returns less frequently.
• The expert role is played by product experts from suppliers, for example, who can build a business model on this. And for whom product development actually pays off.
• Platforms focus on what they're good at: shoving boxes super fast and actually making money with them.

Do you believe it yourself? Yes, we so. Off to the 2020's!

Greetings,

Marja