The Future of E-commerce is Social and Distributed

Studying global e-commerce trends is a focus of mine. Having had the opportunity to discuss the idea of Buy Buttons embedded into nearly ever service, I’ve been thinking about the broad implications this has in our commerce experience. If you follow what I write, you know my current conviction is mobile wallets and, subsequently, mobile commerce, will be the mechanism for what I’m about to lay out. Mobile wallets and things like Apple Pay and Android Pay will do for the entirety of e-commerce what one click checkout did for Amazon. They will turn the entire web into one click shopping. So we need a “beyond the cart” mentality.

Buy What You Want From Anywhere

The end result of this may not be a simple buy button but the overall trend remains the same. Platforms like Facebook, Instagram, Snapchat, Twitter, Pinterest, even Google search, will make one click shopping simple and easy from their platforms. In essence, we will move beyond the cart. That carries with it the assumption that shopping takes place on one site where I buy many items and place them into my cart. This cart shopping experience will still exist, particularly with places like Amazon, Flipkart/Snapdeal, and Alibaba/ where the inventory selection is massive. But the one click single product purchase will happen more frequently by more people across the globe.

How we purchase apps got me thinking about this. Consumers are being conditioned to find the app they want and buy/install it. There is no adding apps to a cart then checking out. The most common digital transaction, acquiring an app, whether free or paid, is done one at a time. To further explore my theory, I ran some research across our global consumer panel and asked how many packages are purchased on average at one time from an e-commerce site. Globally, 2-3 items at a time had the highest number of respondents at 44%. iPhone owners on average purchased more products at one time than Android users. However, 33% said on average they only purchased one product at a time while buying goods online. I expect this number will grow significantly.

Discovery and The Artifical Intelligence Layer

What takes distributed commerce to the next level will be artificial intelligence to auto-embed transaction buttons into the social stream. Imagine a friend of mine posts on Facebook they are going to see Garth Brooks at a venue near me. Facebook could then auto-inject a buy button around that post, letting me purchase tickets to the same concert, near or by my friend, automatically. Another friend posts on Facebook they just discovered and purchased a gadget and can’t stop raving about it. Enter the buy now button. The AI to make this happen automatically is the key. The social commerce driver is my curated network of trusted sources on things like Facebook, Twitter, Pinterest, Instagram, etc. As social sources mention products, the social commerce angle becomes quite powerful. The individual does not need to be an affiliate since they won’t actually sell enough to make it worth it. However, the social platform benefits by adding the transactional layer intelligently and in a way that leverages social product promotion and enhances discovery of new products. The best kind of marketing is when you let your customers do it for you. This engine creates the dynamic but doesn’t stop at just promotion — it can lead to transactions.

For many of these large scale businesses like Facebook, Google with search, Instagram, Snapchat, Twitter, etc., the transaction model is a necessary driver of their revenue upside potential. I’ve articulated the WeChat model before where average revenue per user is above $7, many times over the average for other sites I listed above. WeChat is a very different beast, where the vast majority of transactions from WeChat users take place on WeChat, for the other social networks they are competing for time on their asset/s. This is why Facebook building a family of assets from Instagram, WhatsApp and beyond gives them a higher total of eyeball time across their assets vs. Pinterest or Snapchat who only have one asset to compete for time share.

The over-arching narrative here is how we will be able to discover and buy products across a multitude of experiences throughout the web and mobile apps. Wallets and one click features eliminate the friction — exactly what is needed to take commerce to the next level.

Published by

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

3 thoughts on “The Future of E-commerce is Social and Distributed”

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