Then eBay arrived, offering goods direct from both retailers and consumers through one central platform.
The rest, as they say, is history.
We are now seeing a shift from this direct model, to an indirect, more agile way of selling. It started with the growth of social media and mobile. As more people accessed peer-influenced content on the move and channels like Facebook took a greater share of voice, being able to buy from social channels on different devices was a natural evolution.
Commerce today is less about 'selling in' a channel but selling 'through' a channel, reaching out to consumers wherever they are and selling in that context.
Shop anywhere…
In 2010, studies by International Data Corporation (IDC) indicate that 45% to 60% of smartphone users conducted 'due diligence' on store prices and inventory. IDC also predicts that more than $50 billion will be spent on merchandise globally using smartphones by 2014.
This explosion of mobile means global desktop audiences are shrinking, people are accessing digital content from multiple devices and brands have to find new ways to get products in front of people.
There are two sides to this story. Firstly, brands themselves have set up camp in brave new locations, selling from apps, social networks, games and shopping aggregators.
Take Shopsavvy, for example, an app that presents products by location. Shopsavvy exposes its engine to developers who are finding niches of consumers via category specific apps and helping brands find headroom in new markets.
As Chris Anderson astutely predicted in his book The Long Tail in 2006, endless choice has the ability to create (if the context is right) unlimited demand.
Best Buy now sells direct through a range of touch points from Facebook, mobile and affiliates, all through application programming interfaces (API's). Its logic is simple, audience first and channel presence second.
Tesco is also making headway in high convenience e-commerce. Foodie.fm, a personalised grocery-shopping app, uses the Tesco API to deliver groceries whilst in South Korea, smartphone users on the subway can scan QR codes on virtual grocery shelves to have goods delivered to their home within the hour.
The second side of the story is where brands are empowering trust agents to become social affiliates. Dell's 'Share & Earn' programme is compatible across over 300 social media sites - if you refer a Dell product to someone who purchases it, you can earn £5.
However, we are also witnessing the growth of unofficial, 'earned' routes to market. Content curation platforms are starting to act as important referrers in this new world. Sites like Polyvore, Svpply and Pinterest have affected a massive swing toward product-pinning and scrapbooking. In February 2012, Pinterest, with only 5.3m 'invite only' active users, referred more people to other websites than Twitter.
Shoppers are turning to these curated experiences to help filter an overwhelming amount of content down to manageable collections of products. Browsing curated collections has become a compelling way to discover new products and, as collections are created by real people, they come equipped with social accreditation which is a marketer's dream.
What drives these communities is discovering and sharing 'products on the verge'. To earn access brands must develop targeted teaser strategies to encourage product exploration before the sale sign goes up within their official stores.
Mobile is joining up web with the high street
The rise of mobile combined with the explosion of product comparison and social commerce has taken distributed commerce onto the high street, with real-world stores becoming digital channels.
As Greg Sterling, US Analyst, says:
For a very long time, customers have done their research online, then gone into stores to buy things. That's never been adequately mirrored by advertising. Marketers either target on or offline shoppers because of the difficulty of matching on and offline behaviours. Mobile is waking retailers up to the crossover of online and offline.
42% of European smartphone owners have used their phone to find product information whilst in-store. Retailers are now encouraging this further by enabling digital product research in-store.
In tomorrow's connected store this will be taken to another level. Checkout aisles will fade away, seeing the entire floor becoming point of sale.
Consumers will be immersed in a rich data-driven experience powered by augmented reality, near field communication, holographs and gesture-based technology. They will be logged into it all through their smartphones to enable personalised recommendations.
This world will drive even greater variance in behaviour with customers starting to purchase online whilst in-store without intervention. In effect, stores will become multichannel product and brand experience lounges.
We also expect to see greater convergence between in-store and online functionality, with sizing, visualising and matching technology to help consumers validate choices. Whether you are at home or on the high street, it won't really matter in this multi-channel future.
So, how should companies embrace multichannel?
- Consider the suitability of your commerce platform to multichannel. Are there opportunities to leverage out of the box features and APIs to test potentially valuable touch points? Ask your vendor for support in trialling new channels.
How have their other clients taken steps in this direction and what are the common pitfalls?
- Consider how to augment existing corporate research programmes to analyse new touch points, assess where head room for commercial growth may be available in these channels and better understand customer behaviour and preferences.
- Once you have a clearer view of the opportunities by touch point, consider how you can conceive new market space by trialling new propositions, flexing pricing and testing varying message and communication propositions. One size is unlikely to fit all, so a defined testing matrix is crucial.
- Combine user research with attribution analysis to evaluate the inter-play between channels. Knowing which channels are important for research, comparison and validation, and which are more likely to drive direct sales will be key to defining your user experience and media strategies.
- Keep a close watch on the market and listen to the pundits. Great ideas can come from any category and any market.
The age of distributed commerce is with us, how will you focus on being found?
Jasper Bell is Strategy Consultant at Amaze and a guest blogger on Econsultancy.
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