Saturday, 14 May 2011

M-commerce: the real shops strike back

Instead of Bringing goods to customer, how to bring customers to goods?

The first revolution of internet has been the information: for retailers, Internet 1.0 was a new, cheap and quite efficient advertising space. For consumers it was also a way to have a quick overview of the existing offer.  The internet 1.0 was an additional exposure for real shops.

Then arrived the dream of the new economy, let’s call it 1.1: retailers started to build on-line shops, relying on the existing offer of their real shops. The “click and mortar” considered internet as another market and the pure players as their only market. Discounters as well as price comparators flourished. These gave a serious competition to real shops, but everybody seemed to discover that goods are still real and that logistics is not free and obvious therefore competition was not so tough.
The Internet players who survived are those who managed to find a true added value in Internet with an additional layer of intelligence to the pure straightforward e-commerce.  Amazon has built a clever recommendation system, and “Vente Privée” introduced the thrill of time limited offer. Let’s call it internet 1.5.
Web 2.0, introducing user generated content, has brought a new value to the Internet. This new revolution has been an additional blow to real shops. First, by giving to customers the possibility to recommend stuff, sales people advice became less valuable and pertinent. As shoppers were given the opportunity to interact and express their view, the retailers loosed grasp on the visibility of their offer. In addition to that, consumer also became retailers. They were able to sell and exchange goods somehow at the expense of real shops (on e-bay and classified ad sites), with e-payment (paypal) boosting it.
That’s when internet went mobile. It is the third step of its evolution, and it is rather a revolution: mobile internet is not only internet accessed in mobility, it is a bunch of new features, among them localisation.
Real shops could get their revenge here: it is no more the demander going on internet to select its purchase, but the internet coming to the consumer to offer him content and relevant information. Instead of pushing a product to the client, Groupon and Foursquare-likes warn him about potential deals that could be around him. This is enabled by localisation based recommendation programs and deals, that would eventually be energised through NFC and the upcoming new mobile features (LTE, Cloud, …).
The roles have been reversed and the pro-activity is no more on the consumer side. While the Internet 1.x and 2.0 had provided reflection and wide scale comparison in the purchasing journey, the Internet 3.0 will push recommended goods based on customer profiling and localisation. The introduction of time limited offers increases the thrill and impulsivity of the purchasing act. Proximity, which was the first asset of street retailers, is back in the mobile e-business. Geographical proximity but also affinity proximity as social networks provides valuable info to targets customers.
Real shops can reinvest the internet, leveraging the very tool that threatened them a decade ago. The war is not over.

Morand, Maxime et Axel

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