March 15, 2007

What Does Your Website Look Like In 2017?

Doug Mack at Shop.org talks about the future of multichannel websites. In the article, notice that an individual at Gartner talks about everybody being held hostage by "Googazon". Remind your multichannel retailing co-workers that you heard that concept first on The MineThatData Blog!

The online channel is likely to evolve very differently, depending upon the business model employed by the retailer. Let's review three business models, and the likely evolution of the websites these business models manage.

Catalog + Online Retailer: Multichannel Forensics dictates that catalog customers are transferring loyalty to the online channel. Businesses with an older customer base are experiencing this transition much slower than businesses with a younger customer base. Over the next ten years, this evolution will drive a dramatic transformation of the catalog advertising channel. The catalog becomes a "brand advertising" tactic that drives business to the website, or communicates the general attributes of "the brand". The website must sell merchandise. This will drive website design toward the most efficient layout, one that easily facilitates a customer purchase during any one specific visit.

Direct + Retail Channels: As retailing splits into two niches (low-cost and high-end), websites will evolve accordingly. High-end retailers will see less and less value in e-commerce, and will see more and more value in using the website as the primary tool for customers to interact with a brand. For instance, L.L. Bean reported 73 million annual online visitors during 2006. I imagine that Neiman Marcus had more than 100 million annual online visitors during 2006. What the heck do you think will happen to these websites when brand marketers wrestle control of the website from the clutches of the technology folks? No other marketing activity replaces the experience of a hundred million individuals who volunteer their personal time to spend time on your website. If 100 million customers and prospects volunteer to spend their free time on your website, you have a responsibility to configure the website to facilitate any and all possible retail transactions. The Direct + Retail website will become the entertainment and information arm of a retailer --- e-commerce will be, at best, a secondary function that serves the purpose of meeting a specific customer need at a specific point in time. These businesses, in my opinion, are the most likely to use Social Media in the future --- integrating Social Media with the retail purchasing experience. Maybe most interesting will be the evolution of virtual-reality sites, as either competition to today's websites, or as the logical evolution of today's websites. The experience will be what matters, not e-commerce.

Online Pureplays: Expect online pureplays to compete with catalogers and retailers by hyper-innovation and hyper-price-based competition. These businesses will have to make their sites a destination, a place where people want to spend time. This strategy will be at direct odds with the intense pressure associated with the need to sell merchandise to survive. Darwinian evolution drives these businesses toward the lowest price, fastest shipping, and best merchandise selection. Expect these businesses to develop partnerships with Google and a likely family of search successors, so that traffic is diverted away from multichannel retail sites.

Ok folks, time for you to chime in. How do you think websites will evolve over the next ten years? What trends do you expect to come to the forefront for each business model?