Over the past two weeks, I have sat in meetings and have heard executives discuss commerce unflattering. Retail is dead, and commerce is a zero-sum sector, and it left me dumbfounded.
As I have realized, commerce is a sector that has two parts that consumers use to interact with it. In-person (retail) and via technology (e-commerce) is not harmonious if you read the press.
Shopify has a competitor that has a little mention in e-commerce conversations. It’s not Facebook, PayPal (could be), or Amazon, but it is a company methodically creating an end-to-end commerce business. Tobi Lutke, I suspect either is following this business or is completely unaware of this company. Square will make Tobi have sleepless nights.
As 2020 evolves, consumers and retailers are experiencing change at a rate of knots. What could take ten years is now accelerated in three months. I continue to believe that Square could be Shopify’s new rival that can hurt them.
I have been tracking a sector since middle April that has been gaining momentum. The acquisition of Fulfillment by Amazon (FBA) businesses by venture-backed companies or PE investors seems to be the 2020 fad.
In 2017-2019, the B2C e-commerce sector saw direct-to-consumer e-commerce investment at scale. It has cooled down to a degree, as questions over sustainability, vertical integration, and real impact became normal. In 2020, venture and private equity believe that rolling-up many FBA businesses into a holding company are the solution. I am not so sure about that.
I have written about the laws of unintended consequences, perception and bias, and the narrative previously. According to the Cambridge English Dictionary, “narrative”:
A story has three sides – your version, my version, and the narrated version. As I sift through 300 stories a week to produce this newsletter, it is clear that stories are managed or not. We live in an era where stories can travel continents in minutes via social media; some journalists do proper work, and some don’t. When a multi-national or brand tell me the media has a story wrong or is drawing incorrect conclusions from it, my mind starts processing the news. I want to have a look at the Zoox acquisition, which Amazon announced and look at what is happening at Lazada.
In the past newspapers and TV was the primary sources of information. Today there are many news platforms, such as LinkedIn, Twitter, WeChat, Facebook, and Instagram. Podcasts also communicate value to listeners. Some companies control the narrative while others don’t.
2020 has shaken society as a pandemic, and civil unrest over racist behavior has led to company spotlighting. Consumers have the most time to spend browsing or interacting with content. Ensuring that your business and team are focusing on and paying the correct amount of attention to valuable tasks are critical.
The past week has shown when leaders and companies focus incorrectly; it leads to undesirable outcomes. I doubt anyone in the commerce industry had any ideas about what happened at eBay and Zalando.
