Where eCommerce Will be in 10 Years
The founders of Harry’s Razors, Jeff Raider and Andy Katz-Mayfield, were nicknamed “the American internet cowboys” by German media after their $100 million purchase of a razor manufacturing plant in Eisfeld, Germany.
You’re probably wondering… why would anyone spend that kind of money on a razor factory? The founders of Harry’s Razors would, that’s who.
Jeff and Andy set the eCommerce world on fire after deciding they were done shelling out loads of money on big, expensive shaving brands like Gillette and Schick. Their frustrations would eventually lead them to create a global eCommerce sweetheart in Harry’s Razors — a startup that back in 2015 was worth $750 million and has only grown since.
Harry’s — along with brands like Bonobos, Trunk Club and Zappos (recently acquired by Amazon) — are just a few superstars that have been responsible for proving to the world that eCommerce is not only hip but extremely lucrative.
As eCommerce has continued to grow at an electric pace, so has the competition. For example, Harry’s Razors is in direct competition with Dollar Shave Club, a company that offers a very similar model as the once revolutionary shaving brand, and was acquired by Unilever for $1 billion in 2016.
In order to stay competitive in the eCommerce space, it is imperative that you look down the road a bit. Where do we think eCommerce will be in 10 years time?
I recently asked some of the top eCommerce thought leaders for their insight on where we are heading. Hopefully, this insight will give you a better idea of the future of commerce and how you can stay ahead of the curve.
A Division of Power Between Big-Box All-Commodity Online Stores and Smaller Ultra-Focused Retailers
“In 10 years, I think we’ll see a massive bifurcation in the eCommerce world. On one side we’ll have Amazon, who will be the trusted source for any and all commodity items. On the other side, you’ll see independent stores and brands anchored by a proprietary product line or a highly specialized service offering — really the only two ways to compete against Amazon. eCommerce stores that sell other people’s products without much differentiation will be largely, if not completely, gone.”
— Andrew Youderian at eCommerceFuel.com
Andrew Youderian is the founder of eCommerce Fuel, a private online community of over 1,000 eCommerce merchants helping one another grow high 6–7 figure businesses. He is obviously very well-informed in the space and believes that, in the future, eCommerce will become further divided.
Andrew explains that Amazon has become the king of eCommerce and that one of the only ways to compete with them is by offering specialized products. Harry’s is a great example of a business that has been able to stay competitive by offering a niche product — men’s razors. While their products are by no means new, they have successfully created an innovative twist in an everyday consumer good that hasn’t seen much change for quite some time.
Harry’s has created innovation both in the product itself and in the way in which consumers go about buying the product — instead of taking a trip to the convenience store to pick up blades and shaving cream, Harry’s delivers directly to your doorstep. Saving the customer time and money.
Massive Expansion as eCommerce Enters its Golden Age
“We’re already beginning to see the collapse of traditional retail, and that’s something that will continue for many years. Today, eCommerce accounts for under 10% of total retail sales in the United States. In 10 years, I expect that number to be closer to 50%. We’ll see hundreds of billions of annual sales flow away from major brick-and-mortar brands, and all that money will be distributed across many thousands of new eCommerce brands and sellers. We’re entering a golden age of expansion for eCommerce entrepreneurs and consumers alike.”
— Will Mitchell at StartupBros.com
Will Mitchell decided to create Startup Bros in hope of helping and motivating aspiring entrepreneurs to start their own online businesses. He has found huge success in eCommerce — making hundreds of thousands of dollars before the age of 18.
He believes that eCommerce will be responsible for close to 50% of all retail sales in the future. So, while eCommerce may seem like a pretty big movement today, in 10 years, it will be a full-scale disruption.
Brands that take the time to establish themselves as eCommerce leaders today will likely become giants in the future as the industry continues to grow.
The Implementation of Virtual Reality in eCommerce
“Looking out many years, I think the future of ecommerce is with VR where you’ll have the ability to examine a product in your hand before making a purchase. In addition, the entire shopping experience will be personalized according to your personality and parameters.”
— Steve Chou at MyWifeQuitHerJob.com
Steve Chou is another internet entrepreneur who has made a fortune in eCommerce. He decided to start My Wife Quit Her Job after… yes, you guessed it… his wife quit her job.
Steve imagines that in the next 10 years, virtual reality will allow online shoppers to hold and admire the products in their hands before making a purchase from their desktop or smartphone. While crisp photos are extremely effective in making a customer feel confident about what they are buying, they are 2-dimensional. Imagine being able to feel, hold and touch a product before making a purchase.
Improved Shipping & Distribution
“Based on the 2017 State of Shipping in Commerce report, we see the ability to boost customer experience (CX) with intelligent shipping and fulfillment as one of strongest assets that a retailer can have to take them through the next 10 years. Already, 43% of retailers are seeing increased sales as a result of introducing better shipping choices. With cost, speed, and convenience being key considerations throughout the consumer purchase journey, retailers who can tap into the scalable and agile qualities of shipping technology to help address these needs will thrive today and in the future.”
— Carl Hartmann, CEO & Co-founder of Temando
If there has been one area that has hindered eCommerce sales over the past decade, it’s shipping.
Since the 40’s and 50’s, people have been able to hop in their cars, visit a store, make a purchase and immediately have the product in their hands. Naturally, humans have been conditioned to expect instant gratification, which in turn causes us to be impatient when it comes to waiting… for anything.
Shipping is a great way for a brand to differentiate itself from its competitors. Generally speaking, most consumers would prefer to have their online purchase within a couple of days versus a couple of weeks. And, they never want to hear their package got lost in the mail.
Carl Hartmann is one of Australia’s top CEO’s in the eCommerce space and has grown Temando to over 60,000 registered users — serving leading brands like Toy’s R Us and Nike. Not to mention, Carl has won numerous awards including IBM Global Entrepreneur of the Year, as well as the Deloitte Technology Fast 50.
Over the years, he has recognized the annoyances experienced by eCommerce consumers and has worked to eliminate them by making shipping cheaper, faster and more convenient.
In the next 10 years, the brands that excel in the eCommerce space will be the brands that strive to offer world-class shipping. Brands that ask the question: How can we deliver our customers’ products on the day, time and place they prefer?
This last point will serve as a conclusion because it encapsulates the underlying theme of the article: how can we get to where we are going, faster?
What are you doing — today — to accommodate these trends of the future? Do you think you might be one of the middlemen lost in the division of power? If so, which direction are you going to take? Are there ways to get your business closer to VR standards with just some simple product photography? Or are you continuing to ignore shipping problems because you dislike the cost absorption?
If there’s one thing we all know about making technology predictions, it’s that they always come true faster than we could ever have expected.
Are you ready?