The Future of e-commerce

But who’ll change it?

May, 2014 in India — Indian e-commerce giant has acquired most popular fashion site to compete against Amazon (The global e-commerce leader who has recently kick started its operations in India)

While in the eastern part of this world, e-commerce companies are busy acquiring more and more consumers by throwing away offers and discounts. The west is all set up to create a whole new buying experience which may change the dynamics of e-commerce industry. And the war has already started…

“ THE WAR OF HYPERLOCAL E-COMMERCE ”

A War!!! But Why??

In the world of online buying where consumer can buy almost everything online. Still the parking of Super Markets are full. Still people are out there in the stores and buying stuffs. Still people are standing in huge line ups at the billing counter. So who are these people?
I call them
- Spurners — One who prefer buying from the offline stores not online.
- Exemplars — Second who wanted to buy online but could not find what they want.

Exemplars are trying to buy the goods which are usually not available in traditional e-commerce sites. They need to take out their cars and go to super markets to buy these goods. These goods fall under HyperLocal Categories and the platforms which enable these buyers to buy them online are HyperLocal Platforms.

So here are the giants of e-commerce, retails and technology who started filling these market gaps with their hyperlocal platforms.

• Amazon Fresh By Amazon. Beta tested in August 2007 and kick started action in June 2013
• Walmart ToGo by Walmart. Beta tested in April 2011
• eBay Now by eBay. Beta tested in August 2012
• Google Shopping Express by Google. Beta Tested in Spring 2013 and launched in September Same Year.

HyperLocal e-commerce — A game of Consumer Convenience

In each one of the above mentioned services the consumer value proposition is almost the same.

Buying daily need goods (i.e grocery, fresh, staples etc.) and getting them delivered at your convenience.

The game is not about same day delivery. Its not even about delivery within hours. Its about convenient delivery — Delivering goods to the buyers whenever they want (morning, evening or their desired time)

Both Amazon and Walmart use their nearest inventories to serve the consumers. This clearly solves the problems of exemplars but The fix cost of their inventory will proportionally increase with the scale of the business and so as their delivery network setup.

While Ebay And Google both have exactly the same model. A marketplace between buyer and local retailers. Solving problems for both Exemplars & Spurners. eBay and Google are creating a platform where buyers will just choose products from their nearest stores, rest the platform will take care of. We call these platforms Hyperlocal Marketplace

HyperLocal Marketplace — One step ahead

Like eBay & Google, Amazon & Walmart also have similar value proportion— Buyer Convenience.

So, Why exactly eBay Now and Google Shopping Express will likely to go big in future?

Offline Stores

The platform not only changes the buyer behaviour, it also changes the offline retailer’s perception towards e-commerce. While the traditional e-commerce platforms are their competition, The eBay Now and Google Shopping Express are their friends.

These physical stores have their own brand values. It will certainly change the mindset of Spurners. (Products are directly coming from the stores)

Unlike Amazon and Walmart, to increase the horizon of categories they don’t need warehouses. Simply bring the stores onboard and start serving to the buyers. The more number of stores they have the more variety of categories will be served to the buyers.

Digitising the Offline Stores (Huge convenience for the buyer)

The products from these stores are all digitise. You’ll get more time for your personal life since below task will just take few taps on your browser or mobile app.

• Finding your favourite product in a shopping mall — Buyers can simply find their product in multiple offline stores in a single tap.
• Comparing the prices — Buyers can compare the product price in different stores.
• Buying from multiple stores — The platform gives an option to buyer to buy from multiple stores in a single cart.

Imagine the amount of time and effort we put in above actions when we go to super market or a shopping mall.

Google — One more step ahead

Both Google and eBay in their respective platforms (Google Shopping Express and eBay Now) are solving exactly the same consumer problems. From platform to Business Model everything is same.

Even most the offline stores are common in both the platforms. Some of them are —

Then Why Google has better chances to kill everyone else?

Outstanding Marketing Techniques

• In its initial launch Google offered Free 6 months Same day delivery. Wow!
• There is no minimum order value, it’s completely fine to order a $1 biro from Staples and still receive free delivery. Wow! Wow!
• On the other end eBay Now charging $5 as shipping charges and minimum order value of $25 per store.

These marketing strategies will give google high number of early adapters and mid users.

Awesome Product and Platform Features

Once your order is ready you can check out and choose a time frame for delivery over the next 48 hours. The delivery windows available are: 10am-3pm, 1pm-6pm or 6pm-9pm which caters for office and home shoppers alike.

After placing the order you can track it realtime on the map. From pickup to delivery (Although others are also doing it)

Having trouble imagining what a toy actually looks like from the online picture? Now, when searching for toys on Google Shopping, you can see 360-degree photos of the products. These interactive images bring the in-store feeling of holding and touching a product to your online browsing.

Others own Apps but Google owns OS

So here is the biggest advantage.

Google already owns a space in around 1.5b mobile devices. To put Google Shopping Express app they just need an update to roll out and bang you have a shopping mall in your phone. Most interestingly the integration with existing services can be really powerful

• Integration with android search — Imagine you searching for “Pasta Roni” in that little tiny search box on your home screen and it shows you nearest stores selling it — tap & added to your cart.
• Integration with NFC and QR Codes — Go and do window shopping , Keep adding items to your cart. Come home and order whenever you want.

Advertising channels for CPG companies and retails stores to drive sales

Google Shopping Express is brilliant for the revenue opportunities it creates. CPG companies will be particularly incentivized to advertise more online. These companies have unsurprisingly viewed marketing as a means to build brand awareness, not drive sales.

Shopping Express changes this. Clicking an ad from Oreo could drop a box of Oreo into your digital shopping cart.

The war has begun. Lets see who takes the crown.