August 18, 2010

New Nordstrom Website: The Evolution of E-Commerce

Click here for a preview of the new Nordstrom e-commerce website. Take a look at the difference in the way that merchandise / "the brand" is presented to the customer.

In spite of what the trade journals and conference agendas communicate, e-commerce is under siege.

History has a way of providing us with a forecast for the future. In the 1970s, Catalog Marketers leveraged "big books" ... some of you remember these, Spiegel, Montgomery Wards, Sears, Penney, 600 page monsters that offered the customer "everything". These brands exploited the "long-tail" thirty years before the term became trendy.

In the 1980s, we had "specialty catalogs" ... smaller catalogs from Lands' End / L.L. Bean or tens of thousands of catalogers that were possible because of the magic of database marketing ... science made it possible to send a targeted merchandise assortment to a targeted audience ... clearly, this was a far more profitable proposition than sending every single item to every single customer.

In the 1990s, e-commerce bursted onto the scene. In the embryonic stages of e-commerce, you needed offline advertising to drive traffic online. In other words, you needed small vehicles (catalogs, e-mail) to drive traffic to large vehicles (e-commerce website).

In the 2000s, we learned all about the "long-tail". E-commerce went the way of the 1970s catalog, once again, you had to share everything with the customer. In the last decade, technology fused search (on-site search and Google/Bing) with a "long-tail" based website, so clearly the end result is different than in the 1970s, but the concept holds ... it was again fashionable to aggregate everything under the sun, having 20% of items driving 80% of sales while finding ways to make the remaining 80% of items profitable. Good luck to the inventory manager responsible for managing long-tail inventory!

In the 2010s, the pendulum is swinging back to the 1980s ... this time, Mobile is the vehicle that is driving the change. In the 80s, the computer decided who received a smaller, targeted assortment. In the 10s, the customer and the computer will use Mobile to "go small" once again. Mobile demands that the merchant edit the assortment ... in fact, Mobile is pointless unless the merchant uses Mobile to significantly edit the assortment for the customer. Combine Mobile with localization (Foresquare / Facebook Places), and we're going really small now, aren't we?

E-commerce is the "big book" catalog of the 1970s, and it will be forced to evolve in order to compete with Mobile. You are going to hear the pundits talk about a "multi-channel" solution ... they will tell you that Mobile and E-Commerce are Peanut Butter and Jelly ... just like Catalog Marketers who said that Specialty Catalogs and E-Commerce were like Salsa and Chips back in the 2000s.

Mobile and E-Commerce are not Peanut Butter and Jelly. Mobile is going to cause a fundamental transformation within E-Commerce, one that many E-Commerce experts are not ready to deal with.

I predict (and I clearly have a good chance of being wrong) that E-Commerce will become far more entertainment-based, and far more social ... it has no choice, it has to evolve given the simplicity and personalization offered by Mobile. I sincerely believe that E-Commerce will look more and more like a highly polished cable television program over time ... I believe that E-Commerce will get a layer of frosting that goes on top of a crowded, link-based, sku-intensive website that is explored via search. Without this, the customer will chose the simplicity of the Mobile presentation. The history of Catalog Marketing points us in this direction, doesn't it?

Take a peek at the evolution of the Nordstrom website, and tell me if you think they are headed in that direction, or share your thoughts in the comments section if you think I'm nuts ... and if you think I'm nuts, send links to facts that support your personal hypothesis about what you think will happen in the future!

7 comments:

  1. Having been heavily involved (read: obsessed) with mobile for the last few years, I believe it will almost completely replace e-commerce as we know it. I agree with you that some companies will go the pure entertainment route and I also think that others will go back to the basics.

    One of the issues with some of this stuff is that once a customer sees/gets something, they want it and they don't like it at all when you take it away/change it. For example, if you go to the Ticketmaster site, you are now allowed to pick your seats right off the seating chart. Customers are eating this up. Sadly, the application is built in Flash so if you use it on your computer at home, it works perfectly. If you use it on your iPhone or iPad, you can't use it all and you get bumped BACK to allowing them to pick seats for you. This isn't just an inconsistent branding experience, it's an inconsistent functionality experience. (MUCH worse from a user perspective.)

    Thanks for starting this discussion. It's a great topic.

    ReplyDelete
  2. I still don't see someone buying a couch on a mobile device (unless it is at the point of transaction - and there is huge value in the end-to-end process of mobile comparison, location, transaction, execution).

    I agree with Amy. Why do sites not provide the functionality for "spur of the moment" transactions? AA.com has done a nice job of simplifying the check-in process and other functions (but I only found it after hunting high and low). Sniff that I have a blackberry and deliver me the ready to use tools I need. That will bring me back over and over and hook me.

    ReplyDelete
  3. I agree that mobile will fundamentally change ecommerce, but disagree with the idea that it will become entertainment based. I just don't see customers looking to a retailer for entertainment when there are so many choices available. Ecommerce will continue to offer the in home browse experience, but will have to become more personalized.

    Phones are small and we want them small, this provides a user experience that isn't ideal to the customer from a browse experience and to many customers, shopping is an experience. Many customers want to browse and consider and compare. Shopping on mobile is more of a function that fills a need for a quick, no frills, need it now experience.

    I believe that the real change from mobile will be the store experience and force integration that we have all discussed for so long. Place your order on mobile and wait for shipping? NO, you are already out, so pick it up. Integration will be key. Read product reviews as you are in the store looking at the item. Check to see other colors or if other locations have the item. Set up alerts in ecom to tell you about sales, etc.

    Customer knowledge will need to follow the consumer to the store and to the phone. If Amazon opened a store, wouldn't you expect them to be integrated? Wouldn't you expect them to have your credit card on file? Wouldn't you want to check out with your phone?

    I think the real concern should be how mobile is going to bring ecom right into your store. And that is something that most retailers are not prepared for.

    ReplyDelete
  4. From my experience .... those technology providers that measure and quantify the experience (whatever platform) and help drive business intelligence will win. Retailers are starved for better analytics. The current paradigm of web browsing does not suffice, because conversions are still relatively low and it's getting more expensive to drive retail traffic to websites. Don't have a lot of info. on mobile, so it will be very interesting to learn what works and doesn't. This is simply my humble opinion .... fwiw!

    ReplyDelete
  5. Amy / Kevin / Jim / David, thanks for the feedback.

    If you ever want to have fun, compare your feedback about Mobile to what folks said about e-commerce back in the mid-late 1990s!

    ReplyDelete
  6. Kevin -

    I am probably missing something.

    I think people will continue to buy things on-line. And so, e-commerce will be there in that sense.

    The way to present to them would need to be more and more personalized and socialized. And probably one place to keep all the products on a site isn't the most optimal approach going forward.

    I looked at the Nordstorm link that you have in the post. I see that they allow you to navigate based on what you want. And in the marketing campaigns they are probably targeting each of the product groups more specifically or directly. I would do that.

    But, I think people will buy on-line. Probably even more so in future than now.

    ReplyDelete
  7. As I can see here, e-commerce evolution is much more like trends in fashion: what's trending years ago will take the stage once more in the near future, but this time, only better. We felt its greatness on the time when we felt e-commerce was its on successful peak. But look what happened, e-commerce started in a big computer/machine that operates electronic communication, then flew to being used in the smallest beeper or pager (or whatever your dad used in the 90s) you could ever imagine, then went back again to those slimmest tablets everywhere.

    ReplyDelete