How We Buy Online - Commerce 3.0 - Part 2
We don’t want to “go”, but we still want it to “come”…now, creating new distribution moats
Sitting at home, our choices of activities outside of the screen are limited to say the least. As a result, the Covid pandemic has greatly accelerated tech adoption in general, especially e-commerce, by what feels like years.
It wasn’t too long ago that we were complaining about GAFA sucking all of the air out of the room, but everyday now we are seeing the emergence of new social, commerce, and b2b platforms all over the place. It’s really beginning to feel like we are at the beginnings of a new tech paradigm, marked by the emergence of new technology, compressing startup costs and broadening access for new companies to outcompete incumbents on totally new dimensions. In commerce specifically, where Northzone has been investing since the 90’s (in companies like Na-Kd, Avito, Letgo, Klarna, iZettle, etc.) we are definitely witnessing these effects in the proliferation of new brands, platforms, models, and enablement tools this past year.
While some of our hypotheses about the transition into the next iteration of the web are starting to prove out, this series of posts about the next wave of e-commerce will attempt to build a more intuitive view through human behavior change, around the way we buy, in order to better delve into the implications and the seismic change e-commerce will undergo in the coming years.
Behavior #2: We don’t want to “go”, but we still want it to “come”…now
…creating opportunities to build new distribution moats
It’s day 234871 of quarantine, and you are on your last roll of paper towel, what’s your first impulse? In the past it might have been to get the keys to drive to the local grocery store, but now it increasing becomes tapping on that Amazon button your phone, with the full confidence that this is the most frictionless and reliable way to replenish without having to step foot outside your covid hideaway.
For many (myself included), the most compelling value prop of the Amazon shopping experience is that we can expect run-of-the-mill goods to arrive at the door within two days. This helps us to mentally overcome the environmental unfriendliness, the browsing experience from the 90’s, the scammy reviews, and supporting the world domination of big tech.
As the next era of e-commerce — smaller, direct-to-consumer brands — are growing in importance, they still cannot compete on the fulfillment dimension, which requires immense economies of scale. We think that this part of the value chain is the new frontier for e-commerce innovation — the shipping and post-purchase experience. By tapping into innovative fulfillment models like micro-warehousing and same-day delivery, digital brands have the opportunity to not only compete with Amazon on reliability and speed, but they can differentiate even further by building a more immediate and seamless relationship with their communities.
My colleague, Michelle Nacouzi, and I took a deep dive into this space to learn what the most innovative brands and companies are doing to help bridge this gap. She has published a great post here to further continue this thought on this online buying behavior and how it creates new potential moats.
https://medium.com/northzone/e-commerce-fulfillment-how-new-tech-players-are-bringing-supply-chains-online-ac211ecd8c25