What: Ben Evans’ view on the future of commerce.

Why it is important:  By definition, e-commerce has now a competitive advantage on traditional brick & mortar business model: each budget (be it advertising, sales, marketing, product..) can be reallocated as the digital touchpoint is by essence versatile in terms of utility for the customer. This also relates to other analysts calling for retailers to think about their stores as advertising platforms, showrooms and brand experience playgrounds in addition to points of sales.

Tech analyst and former Andreesen Horowitz consultant Benedict Evans reviews how commerce and its digital iteration is slowly getting transformed by tech.

At first, e-commerce was all about commodity and utility: people knew what they were looking for (including a price) and connected to purchase the said product, fuelling at the same time an online advertising business model based on search. However, since then, discovery and advertising have been expanding and moving, from utility to experience (for instance, in Google, the search on ‘cheap’ has consistently lost ground in favour of ‘best’ for the last 10 years).

For him, such changes are extremely important, because it is not anymore about presenting the right product and waiting for the customer, but being able to connect the product which is right for one given customer, thanks to recommendations and data. The most important point he mentions is the following:

-    In the “real” world, retail rent, price, manufacturing, advertising and marketing, logistics, are all separate components that do not overlap and are not intrinsically connected,

-    In the “new retail” world, this is the contrary: online, all these budgets become one, all pieces of the same algebra. As a consequence, every touch point in every part of the buying journey could be part advertising, part retailing, part product.

Even though this also suggests that in the future such brands will have to operate with new ecosystems (Amazon, Target, Instagram…) for Ben Evans this also means that we might see the emergence of new, exciting brands as they will be experimenting even more.

Creating Commerce