February 26, 2018

Channel Interaction

E-commerce is going through an interesting transition.

Catalogers went through the transition two times ... from mailed orders with an order form and a check (think 1980) to phone orders with a credit card ... and then from phone orders with a credit card to e-commerce (think 2000 - 2005).

Retailers went through a wild transition. Back in 2005 - 2010, e-commerce actually helped drive store orders. You'd measure the dynamic, see that it helped stores, and you'd be led to believe that e-commerce was good for stores. I was. I was wrong. As we went from 2010 - 2015, metrics shifted.
  • From 2005 - 2010, if a customer bought from e-commerce the customer then shifted the next purchase in stores.
  • From 2010 - 2015, if a customer bought from e-commerce the customer then shifted more toward e-commerce, depleting future store purchase potential, hurting stores.
The key is to identify the inflection point when metrics shift ... when you notice that the new channel begins to take "ownership" of the customer, you have problems.

E-commerce is going through a challenge today.
  • From 2011 - 2016, if a customer bought from a mobile device, the customer shifted back to e-commerce for a next purchase.
  • In 2017 - 2018, if a customer buys from a mobile device, the customer is shifting more and more to mobile devices on future purchases.
The implications are huge. If customers begin to stop interacting with desktop-centric websites, you have to think hard about how you provide a good customer experience with limited screen space. More important ... you have to think about a future where conversion rates are lower ... how do you keep demand up when the customer becomes less likely to purchase?

And I know people have been talking about this for a decade.

But folks aren't forecasting this stuff out into the future.

Catalogers didn't forecast this stuff out into the future, were caught flat footed, and in many cases were cut off from the future of commerce.

Retailers didn't forecast this stuff out into the future, were caught flat footed, and in many cases began having to close stores because they didn't understand how the metrics interacted.

The same transition is coming to desktop/laptop e-commerce.

Are you ready for it, or are you about to be caught flat-footed?

Discuss.

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