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!