Venture Bytes #10 - E-Commerce is all Grown Up and Moving On

E-Commerce is all Grown Up and Moving On

Ecommerce obstacles are falling and the second wave of digital natives is getting their hands on credit cards, debit cards, online purchasing power. The rise of everything as a service, or delivered, is helping. Ecommerce has moved into social, picture, video and streaming. From Twitter and Snapchat to Pinterest, Periscope and Meerkat, we are seeing a broad array of communication systems embrace mobile commerce opportunity. It is overdue and nice to see folks diversifying away from everyone saying they will monetize by firing more mobile ads at the engaged, mass audience they are building.

The arriving array of easy mobile payment options will drive the next phase of enhanced mobile commerce to evolve more rapidly. In app and cross app Swipe, Apple Pay, Android Pay and others are making purchases much less cumbersome. Developments in mobile payments and backend ecommerce-as-a-service portend big changes and rising market shares for goods and services sold online. Warby will sell you the glasses you won’t wear with your Rent-The- Runway but, you will wear with your Etsy items as you dash off to your Lyft before Ubering back in time for your beer, wine, Amazon and uncooked Plated deliveries.

Shopify has passed into our lexicon and now into our public markets. We see Shopify as the harbinger of a new generation of e-commerce and mobile commerce (m-commerce) companies poised to gain a rising share of the growing portion of selling and buying moving to online. Shopify’s Canadian origin and small business software worldview have uniquely positioned it to focus on and execute for, smaller businesses. The Shopify IPO, as well as the firm, proved an illustrative case in many new and noteworthy trends. The IPO offered different share classes with vastly different voting rights. Again, an anticipated IPO priced above the top end of an increased indicated range of possible prices and gapped higher on the first day of trading, only to fall thereafter. Shopify is a great case study in solid trends and IPO dynamics alike. Shopify offers logistics, a payment solution from Swipe, shipping apps, monitoring and analytics to firms looking to harness the global and growing markets online.

Globally, ecommerce has been beyond hot of late. The sample matrix below highlights the massive ecommerce deals announced over the last week or so. This list is not comprehensive at all.

Ecommerce and mobile device ecommerce is growing and growing up fast. Yes, more is bought online in absolute and relative terms, in the US and around the world. The first generation of ecommerce was all about finding and celebrating the many things people would buy online. It was about efficiencies and data driving larger inventories, cheaper prices and reliable, low cost delivery. This was dramatic and disruptive, new worlds of commercial opportunity opened. We saw books, DVD’s, - if you recall DVDs and paper books- consumer electronics, shoes, clothes delivery menus and groceries sold online. It was important to show you could be online or launch online and tap into the low/no tax new method of finding sellers and buyers.

Ecommerce 2.0 is mobile centric and is all about consumer experience and niche marketing based on A/B testing and data analytics. Shopify’s app environment and API group offers mobile and creative possibilities to small and midsized companies. We see the next generation of mobile and e-commerce companies as fundamentally different from the last generation. Firms like Warby Parker, Casper and others have created a unique and e-commerce native experience that has attracted and retained loyal users. Firms like Oui Hours GMT, where I have relationships, The Honest Company and Etsy have created curated and emotive experiences with embedded online shopping opportunities. Customization of suggestions and experience are being rebased on sophisticated and constant A/B testing and unstructured data mining. Smart data and curated and carefully constructed online experience is the future. There are many and proliferating ways to buy, online and offline. A seamless and easy experience is necessary and but likely not sufficient. The quality and uniqueness of experience will become more important as the space fills up.

Each passing day challenges the clean lines between offline and online, never mind augmented reality. Even before augmented and virtual reality further blur the lines between offline and online, e-commerce and entertainment, newer data driven curated experiences will become the norm. New mobile and ecommerce experiences will need to be unique, emotive and meaningful. We are seeing the rise of the niche markets and the boutiques where merchandising and experience are essential. Etsy works because there is a sense of the types of folks and the community you find in that boutique ecommerce space. Warby-Parker and Casper work because they help you have fun and get quality necessities in an efficient and empowering way.

Thus, commerce and e-commerce, m-commerce will grow closer and tastes and niches will be delicately tended to and require vision, ambiance and curation. Shopify is well positioned to do the backend and cloud management for luxury, small and niche players who will rightly focus on merchandising, margins, product mix and display- just like offline stores do. Ecommerce has grown up and moved on from being just cheaper stuff, generic stuff, offered to folks who would just rather buy online.

Also featured in this edition is our news section containing articles from The New York Times, VentureBeat, Economic Times, and NVCA.