Imagine, for a second, that it is the year 2004. The latest trends are Bluetooth technology, the revolution of video blogs and a promising iPod competitor called the Dell Digital Jukebox. (You’ll get a kick out of this 2004 Forbes article on tech trends.)
Now fast forward to 2012. How will new technology play a role in our lives eight years from now in 2020?
That’s the question five panelists pondered for nearly two hours Tuesday evening in front of about 100 people at Bellevue City Hall. The talk, put on by local non-profit entrepreneurial network TiE, focused on the current trends in and the future of e-commerce.
Scott Jacobson, a partner at Madrona, moderated the discussion and touched on a number of topics. The panel discussed everything from shopping with a mobile device to the pros and cons of physical and digital storefronts to analyzing how men shop differently than women. They also talked about the biggest and most famous e-commerce business in town, debating the impact of Amazon’s Kindle Fire and the potential of physical Amazon stores.
It was my first time going to an event put on by TiE, which stands for Talent, Ideas and Enterprise. The speakers had tons of insight, the discussion moved along well and there was plenty of time for audience questions, which were excellent. Plus, it started on time and ended on time.
And for the people watching these industry leaders share their thoughts, it was essentially like a two-hour e-commerce startup consulting seminar. I was impressed, and so was Bellevue mayor Conrad Lee.
“When these smart people learn and share opportunities and ideas from other people, they do great things,” said Lee, who was in attendance Tuesday night. “We benefit from them creating new businesses and that’s what we depend on for our economy. We hope that 10 percent of the companies can become future Microsoft’s — that would be an excellent addition to our region.”
Here’s what each of the panelists, including Jacobson, had to say about the future of e-commerce.
“Companies need to create a durable and competitive advantage. If they are selling the same products I can get on Amazon or Ebay, that is a very challenging place to start. But sometimes durable, competitive advantages come from a unique product where you’re the only one who can make it or sell it. Sometimes it comes from a differentiated business model. There are plenty of opportunities, but it’s got to be something that is both differentiated and durable.
By default, if it’s not differentiated or not durable, then somebody else is going to do the same thing. Look at Zulily. They took a differentiated approach to curating product and featuring that product and took the line of, ‘We’re going to feature local brands nobody has ever heard of,’ as a marketing kind of thing. They are extremely good at both curating all that selection and then very cost-effectively acquiring email addresses that turn into people visiting the website that turns into customers. That’s differentiated — curating and scouring this stuff — and they’ve been able to demonstrate the durability.”
“I would pay attention to the service part. Here’s an example: You empty a cereal box and throw it away in the trash. People who hate shopping want the new cereal box to show up in your kitchen or at the door at the very least. This is the kind of service to pay attention to. A few weeks ago, I was thinking of buying something and I thought I’d just buy it later. Then I forgot. It bugged me. So people, they want to buy those things right away.
Another thing I would pay attention to is price discrimination/differentiation, especially with coupons.”
“What you will see is the vast majority of products going online. The other products need innovation. If traditional brick-and-mortar stores innovate fast, they’ll hold on to the customer. It’s about innovation and change. We need change in traditional brick-and-mortar.”
“There are two things to think about. One is to really invest and think about your product, the quality of your product and how to differentiate the product or experience that you bring to the market. The second thing to think about is customer acquisition. How do you get traffic in the door of your site and convert those visitors to customers? I think a lot of people start e-commerce websites betting on organic traffic and P.R. and things like that. My advice to an entrepreneur would be to take a step back and really think about how they’re going to do that. These businesses are centered around transactions, so either the math works or it doesn’t.”
“It’s something about building a business around the customer, not around the product. The possibility of doing so is different and better than it ever was before, and the benefit of doing so is potentially greater.”
“I think there’s going to be an interesting battle between the traditional retailers and the pure play etailers. The etailers will try to mitigate their disadvantage versus physical retail by doing a better job of curation, discovery and personalization. Right now it is very much a search-driven behavior. They will also try to do a better job of allowing the customer get a better sense of fit and finish.
Physical retail will try to leverage digital — especially mobile — technologies to improve the customer experience so they continue to prefer going to physical stores over buying online. This means equipping both customers and sales associates with the right information to making the purchase decision, as well as improving the checkout process. They will also leverage their physical store assets to allow customers to either pick up items from local stores or even the reverse where they can order something from the store and have it delivered to their home.”