A blog on eCommerce, Social Commerce, Comparative Shopping Engines & Business

By Hendrik Laubscher

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Button – a Contextual Commerce business

As 2016 moves into full speed I wanted to recap on a trend I have been seeing. No – it is not mobile commerce (as that is now a requirement) but rather contextual commerce. 2015 is the year in which mobile assisted ecommerce drove a significant amount of sales away from brick and mortar retail. Button – a New York startup has fascinated me with integration’s that make mobile commerce an contextual event.

The fundamental shift
In developed markets such as the US and Europe – apps play a huge part of mobile users lives. The usage of apps have become the norm for most smart phone owners. It also has created a situation in which customers are being forced to make decisions on their home screens. What apps are users keeping on their homescreens and why is a question I hear often.

I also believe that mobile has fundamentally changed the process of shopping as the shopping process is no longer a once off event. I see daily that at after 9pm how many customers start browsing on their mobile devices and then either browse items they are interested in which leads to a purchase or the purchase ends on notebook or tablet. Omnichannel commerce is readily becoming seen across the globe.

I also believe that on-demand apps have changed our expectations. When you use a ride hailing app such as Uber – the moment that you request your ride you know it is on the way. All on-demand apps are used based on need or luxury when customers are time starved. However there is a magnitude of on-demand apps that require opening to achieve a simple action. These apps have become a bridge between us and our surroundings. As I mentioned earlier this is becoming a challenge for customers as we have many apps on our phones.

However with mobile commerce there is a challenge so big that only 2 tech behemoths can fix it. Discovery of apps is nothing short of a nightmare and at the moment at the mercy of Google and Apple. These businesses have been interfering with app store placements to ensure that larger budgeted app businesses are seen as being popular and top performing apps.

With great power comes great responsibility

In the past 12 months – 2 companies have fascinated me in the mobile space. Button and Wish, as they are advancing the uptake of mobile commerce. Button is also one of a handful of companies that have leveraged the deep link. Button has a mixture of company backgrounds that reads like a who’s who of global tech. Rocket Internet, Rakuten, Venmo, Google, PayPal etc have all played their parts in forming the Button team.

Deep linking is a smartphone cousin of the web link which we use daily to drive connections between search, content and commerce. The deeplink on mobile is after desktop search the most important development in the last 20 years in consumer technology. A deeplink provides a bridge between a user and an action. The user is not redirected to a desktop website, touch optomised (LinkedIn I am looking at you) but rather to an app that is already open on the functionality that the user requires.

In the most simple interpretation, a deep link is any link that directs a user past the home page of a website or app to content inside of it. e.g. linking directly to a product instead of the home page. In the context of 2015, we’re particularly interested in mobile deep links; links that can be used to open an app to a specific piece of content or action. For example the URL fb:// may open the Facebook app, but fb://profile/33138223345 opens Wikipedia’s profile in the Facebook app.

Button I believe has also capitalised on a larger trend that as a software product manager I can relate to. They have gone all in on API’s to ensure that in the background, independent sets of software can operate in a focused manner. Button was by my research the first startup to capitalise on Uber’s open API and have provided other startups the opportunity to leverage a mobile first on demand behemoth in a manner that will bring joy to their customers.

As I mentioned earlier Button has ensured that developers can plug in functionality from Uber, Delivery Hero, Drizly, Foursquare etc to ensure that their customers can leverage context to ensure that multiple tasks can be completed inside their app.

Watch how they demonstrate the interaction of Uber ride hailing inside another app.

So how does Button make revenue?
Button works on the affiliate model in which a percentage of the revenue generated by one of their API’s is then paid to them. Button gets app install revenue in addition to transaction revenue. It is basically an affiliate transaction for mobile that benefits everyone – publisher gets additional revenue, while the commerce service gets a loyal app customer with a transaction.

So who is Buttons competition?
In the same geography – there are a few competitors for this New York based startup. URX, Branch are all playing in this space but from the outside it looks like Button has leveraged the on demand ecosystem the best from everyone.

Currently Button has focused only on the US and European markets through partnerships and I believe that they will look to become a global business in the coming 5 years as mobile commerce is seen across the globe. I suspect that Button will most probably look to Asia in 2016.

Button provides context to mobile commerce in a manner that is beautiful, simple and elegant. As a commerce executive Button makes me look into the future and believe that our devices will provide context to us unlike any algorithm or AI will provide.

15 thoughts about ecommerce from 2015

It is the time of year when summaries are written about what happened during the year past. 2015 was a fascinating year full of intrigue. I cant remember any year in which fluctuations occurred in a specific market. To summarise ecommerce in a few thoughts is very difficult as the industry is large but through observations, conversations I have come to the following 15 points:

tldr; Amazon was dominant, Alibaba wrote a lot of checques and ecommerce made a dent in global percentage of retail.

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Is ecommerce a social event?

Social
noun: social; plural noun: socials

The last few months has provided me with a question that I have been thinking about – “Is ecommerce a social event?”.  As an ecommerce executive when planning is done for new features, the social aspect of shopping will get a mention. However – I feel that referral marketing is being seen as social commerce. Share a product via a facebook post, a tweet or an Instagram post. In some cases it will lead to a discussion on the respective product but it will not lead to a discussion over a possible sale..

Social commerce is a subset of electronic commerce that involves social media, online media that supports social interaction, and user contributions to assist online buying and selling of products and services. More succinctly, social commerce is the use of social network(s) in the context of e-commerce transactions. (Wikipedia)

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Classifieds, Marketplaces and Comparison Shopping – The models

Last week Tren Griffin did a tweetstorm on a topic that fascinates me – Marketplaces. Marketplaces are beginning to take over from pure play ecommerce businesses. A marketplace is ultimately a network effect in a form of a platform that provides customers with large selection due to suppliers. Without either part of the equation the marketplace wont gain traction and make any headway.

“Network effects” is a frequently used term and it is sometimes confused with having a large customer base.  Network effects is more than just a large number of users – they kick in when the value of a product depends on how many other users there are.

When a new user/member is added to the network, it increases the value of the product or service to all other users. This increased value can be in the form of cost reduction (in user acquisition as an example), higher liquidity (in a marketplace), stronger community or deeper relationships (in social networks), etc. (Versionone.vc)

However marketplaces can also be seen as a solution to an offline inefficiency with technology (mobile). Once the marketplace reaches critical mass the virtuous cycle starts. Uber has now reached that stage and am able to do things that dont necessarily scale – offering loans to drivers etc.

One of the most important things you can do is identify and double down on the things that work in your marketplace. As your marketplace starts scaling, there will be many matches and transactions between buyers and sellers. But not all matches are created equal. Identify where things are really clicking (on both the supply and demand side) – this could be in certain geographies, audience segments, price points, and user behavior. (Versionone.vc)

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Marketplace challenges – reviews and counterfeit products

Over the last 3 months I have been looking at marketplaces in-depth. They deeply fascinate me and at the moment is the most dominant part of ecommerce retailing. There are still more intricate differences between the various different dominant marketplaces. Amazon, Alibaba, JD.com, Konga and Souq are just a few of these 2 sided marketplaces that are creating network effects for both the platform and the sellers.

However, if you look closely there are some challenges for these software platforms emerging that should have their founding companies concerned. Untruthful reviews and counterfeit products are becoming problems that provide start ups with opportunities to be acquisition targets.

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