The End of Webshops as We Know Them

Do you remember the 1990s? People would buy dead-ugly, gray boxes called computers and put them on top of their desks. They would look into a vacuumed glass bowl in yet another dead-ugly plastic box called “monitor.” They would hook up this strange combination to the Internet via a noisy (and also dead-ugly) plastic box called “modem” and surf the web at the ridiculous speed of 56k.

amazon-screen

The mid-90s were also the nursery of e-commerce; it was the time when the first webshops appeared. Amazon began selling books online in 1995, and a German software company called Intershop presented the first piece of software that allowed retailers to create their own webshops: A rectangular area for their customers’ browsers, showing product information, enabling them to enter their address and payment credentials and submit their orders. The way in which people did online shopping was bound to the constraints of the technology available at the time: no fancy UX stuff (old browsers), no fancy graphics (slow connections) and a rather uncomfortable context (sitting at your desk instead of on your sofa).

For the next ten years or so, these webshops have been the de facto standard interface for doing online commerce. Although they have become more and more sophisticated since the early days, the fundamental flow is still the same: choose a product by either navigating the categories or using the search, put it into the shopping basket, provide all your details and finalize your order. Of course, now there are things such as personalization and recommendation, intelligent search, cross- and upselling, fraud detection, you name it. There are numerous service and technology providers in all shapes and forms; there’s literature, there are experts, there are best practices. Still: Webshops = E-Commerce. Full stop.

Mobile Commerce

apple-jobs-iphone

In 2007, when Steve Jobs presented the iPhone to the PC-centric world, it all got turned upside down. All of a sudden, there were smartphones, telco providers gave us fast mobile connections, and people began surfing the web everywhere. Just imagine, a few years back you would sit in your office, hunched over your desktop computer, taking ages to download your mate’s holiday photos. Now, you watch the latest episode of Game of Thrones – on your mobile, on the train, in HD.

Many retailers were quite hesitant at first despite the fact that mobile online revenue was steadily eating away PC-based online revenue. It took a wakeup call from Google – the search engine started to penalize non-mobile-friendly websites to finally made them come up with solutions such as mobile apps and responsive design. Standards were made, best practices developed – and retailers (almost grumpily) accepted the fact that user preferences had indeed shifted to mobile and they had to do something about it.

Commerce on my site vs. Commerce Everywhere

Strategy-wise, regardless of desktop or mobile offerings, retailers still followed the same logic:

  • Build an online home base accessible by PCs and mobile devices
  • Invest in SEO measures and advertising to get traffic to this home base
  • Convert the traffic as efficiently as possible (while usually being content with a measly 3% conversion rate).

Alternatively, to boil down this strategy into one sentence: “I catch my customers on their PCs and their mobile devices and lure them into my own shopping paradise.”

However, things did not stop there – the retail industry is up for yet another major paradigm shift. It turns out that mobile users (keep in mind: their revenues are eating away the desktop ones) are more or less using about five apps for the major part of their online day. Within those, social networks and messengers play a vital role. For retailers, this means two things:

  1. It is highly unlikely that customers will use their own, customized native apps.
  2. Retailers should make the most of their potential clients’ online time in those social media apps and make discovering and ordering products there as smooth and seamless as possible.

There’s a third option implied here: if the number of potential touch points is limited, why not think about coming up with new ones to offer new methods of interaction? Even create new business models? There are few examples of retailers experimenting with this:

  • Amazon: This is a no-brainer. The big guys from Seattle are trying all sorts of ways to build additional touch points: They have the Echo to capture voice and receive orders without anyone having to type anything at all; they have their physical Dash buttons to enable one-click ordering; and they are experimenting with local shopping concepts such as the Amazon Go store to be close to their customers.
  • Estée Lauder: IMG_3004For a cosmetics brand, what could be more intuitive than converting their audience to customers right in a popular messenger app, right? The company recently presented their Lipstick Chatbot: It uses Facebook Messenger to have customers upload their selfies and check out which kind of lipstick looks best on them.
  • IKEA: The Swedish furniture retailer has been experimenting for a while with how to present their products in different ways. Take a look at this short video to see how they make use of virtual reality to let their customers experience a kitchen and check out their product catalog:

Decline of webshops

To sum up: We started building webshops in the mid-90s, and structurally they haven’t changed ever since. When the iPhone heralded the birth of mobile commerce in 2007, those shops were made mobile-ready, but still required customers to actually visit those shops and do their shopping there. Now, we’re reaching a phase where the focus shifts away from retailers’ home bases to whatever touch points people are using. More and more, webshops will be reduced to serve purely as central data hubs, delivering their data to all those different points of interaction via fast APIs.

Webshops served us well all these years – but their reign is surely over.

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