Ecommerce is changing: where to from here?


Like any industry, eCommerce is just beginning to mature, so what are the next opportunities for disruption?

The barriers to entry are no longer technology or software
Most retailers now understand that a multi-channel approach is the minimum required, and have a technology stack, where some will be better than others. Most smaller businesses will outsource this cost, most medium businesses will have in-house teams, and the very large will have a combination of in-house, outsourced and agency teams all working on their eCommerce proposition.

The emphasis on constant adaptation will increase as the competition heats up, so stagnant websites will mean decreasing customer loyalty. The barrier may no longer be technology itself, but it will become speed and agility.

The barrier to sustainability is profitable user acquisition and product margin
Since there are plenty of options for starting an eCommerce store today (yet most still do it poorly), the challenge is really how to acquire customers at a cost which is sustainable. Many online players rely on a Lifetime Value approach, where they model out the profit generated after the first acquisition of the customer and bet on that making them profitable.

That works in some market segments, but it may also be offset by high return rates. This approach doesn’t work for all segments, especially with larger ticket items or where the purchase is more considered. So the challenge becomes how to acquire a customer profitably on the first order.



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