The fact that we all have technology at our fingertips has caused a disintermediation within traditional commerce, and significant disruption for retailers big and small. Consider the impact of Netflix on Blockbuster and local video stores, or how Amazon upended book buying. What we know for sure is that innovation, and the speed at which a business is able to innovate, is no longer an option. Rather, it is paramount to survival.
In the next decade, we’ll see more change in the commerce landscape than in the past 100 years combined.The reason? Four mega trends being driven by consumers are dramatically changing buying and selling habits as we know them. Merchants of all types—from brick-and-mortar retail outlets to non-profits, to manufacturers and even those selling online, need to ensure they’re keeping pace or risk going the way of Blockbuster, Borders and the dinosaurs.
Smartphone sales are on such an aggressive upward trajectory that some estimates suggest there will be up to 50 billion connected devices (beyond just smartphones) by 2020 and each consumer will have approximately seven devices connected to the Internet. Beyond just making phone calls or sending text messages, people regularly look up directions, research products while in-store, chat and compare with friends and family, search for deals and even pay for their morning coffee with their mobile phone.
These intelligent, always-connected devices and the consumers using them to their full potential are pushing merchants to react quickly, or die. Businesses that don’t have a mobile commerce strategy are losing out on significant revenue, and that’s only going to continue to accelerate.
Not long ago the most impressive features of online shopping were the ability to find out which stores were located in your neighborhood and determine which might have your item in.
Now, there’s an app for that! By leveraging inventory sharing and local mapping, buyers can now access real-time inventory data while on the go, browse through sales and deals tailored to their individual preferences and even get suggestions based on things like frequently visited restaurants, clubs, hotels and more. This is powerful stuff.
The merging of mobile and local is also leading to the creation of entirely new business models and opportunities for merchants and consumers alike. A great example is that people are now able to get paid for snapping photos while out and about in their cities. How cool is that?
If you’re not taking full advantage of the ability to reach customers based on stated preferences and proximity, you’ve already fallen behind.
Commerce is an inherently social endeavor. Not long ago, a customer would try on a sweater while in-store and ask her friends for feedback before purchasing. Today that same customer can just as easily try on the sweater, snap a photo of herself wearing it, share it on her social network of choice and get a ‘thumbs up’ or ‘thumbs down’ within minutes from multiple friends in various locations. There are apps that will share what a person’s friends have purchased on social sites or allow users to share local recommendations with one another.
The explosion of consumer interest in social networks has spawned the so-called social commerce opportunity. In fact, transacting within social networks is predicted to go from a $5 billion opportunity in 2011 to a $30 billion opportunity by 2015.
The challenge for merchants? How to effectively leverage a customers’ social graph to build an additional commerce channel within the social networks themselves. We’re beginning to see early signs of this with some of the group gifting apps and the ‘social shopping mall’ concept that allows sellers to offer their products directly to hundreds of millions of Facebook users.
Digital has changed everything—including how we use and think about currency. People now have the ability to bump phones together to pay off a friendly wager, order and pay for a meal entirely via a mobile device and transfer paper checks into their account by snapping a photo with their mobile phone.
Similar changes are occurring in-store. Consumers can pick up an item off the shelf, scan the barcode using their mobile phone and immediately find out if the same item is available online or down the street for a lower price.
The digital revolution is here, it’s real and it has leveled the playing field for both buyers and sellers of all shapes and sizes.
As the mobile, local, social and digital trends drive our lifestyles, the pace of innovation will determine which businesses will go boom or bust. At the end of the day, merchants want to return to the business of being merchants. They want to find the best things to sell to consumers and they want to create the best shopping experience a consumer can have. Those that are nimble and seek to adapt quickly to emerging consumer behaviors will not only survive, but thrive. One thing is for sure—the future will look nothing like the past.
What do you think commerce will look like in 5-10 years?
Matthew Mengerink is vice president and general manager of X.commerce, the first end-to-end, multi-channel commerce technology platform designed for all the ways consumers choose to shop today. Matthew leads the integrated open commerce platform group and is responsible for ensuring that eBay Inc. builds a strong, robust developer community across the eBay, PayPal and GSI technology platforms to amplify merchants’ businesses.
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