The 10 ecommerce stories for the week of 30 June 2013

Trouble at The Iconic, Square enters the marketplace space, Amazon wants be a digital art dealer and Fab raising money

Fab.com has been in my thoughts the last 2 weeks. Are they growing too fast? Do they play the PR game and what is their future? Those 3 questions have been circling in my thoughts and in all honesty I am more unsure about this business than before they raised the money.

14 million users, $310 million raised and many acquisitions. Those 3 things together does not make any investor jump for their checque books, in all honesty it raises question. I am a Jason Goldberg fan ( I read his blog and I get the daily fab emails) but I think we need to look at a few things in context.

One – they consistently mention becoming an Amazon of design. Amazon is business that is non repeatable and it is a behemoth. eCommerce is a margins game and fab with respect is going to battle becoming a $1 billion dollar business. Why? I don’t they can scale the business to make that kind of revenue globally. What makes Amazon scary is that it has a variety of methods to make revenue (AWS, Prime, Marketplace, Fulfillment by Amazon etc) what does Fab have that can be seen in a similar manner? At the moment nothing. Secondly, this created version of ecommerce – emotional ecommerce is really a Goldberg creation. No other industry analyst, CEO, VP has made mention of that. I get that they need to create themselves a niche but I think fab needs to take a few lessons from Amazon. Be transparent but really try to tone down the rhetoric and focus on achieving customer happiness and make a lot of revenue before telling everyone about it.

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Amazon goes grocery shopping outside Seattle

Jeff Bezos must be the pied piper of commerce. His creation Amazon is slowly moving out of its traditional market (online) and disrupting retail. He clearly wants to ensure that Amazon can supply any product to any shopper in the US. (International focus is to intensify in the next 5 years in my opinion as current countries of operation become saturated)

The onslaught into retail and the high street started with the Amazon Price Check app. The idea was to enable shoppers to scan and compare products and then buy through Amazon at a discount.  In this specific case Bezos used the shopper as an intelligence network that would enable Amazon to create pricing data for retailer product.  It is telling that this happened in 2011 and if one looks back it was the beginning of their challenge to retailers in the US.

On Dec. 10, Amazon promoted a new “Price Check” mobile phone app by offering shoppers a 5% discount—valid only for that one day—on items they found in brick-and-mortar stores, but purchased online through Amazon instead. The app enables in-store shoppers to scan or snap a photo of a product. It then immediately compares prices with Amazon’s. The app is prompting an outcry from small retailers, who say the site is using their independent stores as its own showroom.

“The goal of the Price Check app is to make it as easy as possible for customers to access product information, pricing information, and customer reviews, just as they would on the Web, while shopping in a major retail chain store,” he said.

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Ecommerce building blocks – articles to read and bookmark

The silence is done, my month of  absence from writing has been spent researching and working on some really exciting blogposts for the coming months. Normal service will now be returning.  You will notice that my website has had some changes done – I will be writing a post on that in the future as I am not completed with the transformation, yet.

CPCStrategy whom also has had a huge change in terms of the look and feel of their website recently wrote a cheeky article on the The 5 Best Ecommerce Articles In The History Of The Internet. Let me be honest for a moment, these articles and videos are some of the better content found on ecommerce but it points a very limited picture of the ecosystem.

In terms of a solution I thought about doing a top 10 of e-commerce posts. (These are my favorite posts written by some of the sharpest minds in the industry. Also note that I am going to post them in no particular order as the content should be read, bookmarked and returned to. That for me is the mark of good content.
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The Fab.com refocus

Curated ecommerce is a hot topic. Call it a new wave of commerce businesses or just a new vertical that has gained a lot of momentum over the last 6 months. The Gilt Groupe started it after Vente-privee mastered flash sales.It is full priced online retail with a focus on apparel and white goods.

Just to be clear flash sales is not the same thing as curated commerce. Flash sales boils down to selling high value merchandise at deeply discounted  price. Flash sales is an industry that I keep an eye on as I believe it is a good measure of where apparel online retail is at.  Curated commerce is ecommerce with a editorial angle to it (beautiful images, content that is more related to the person buying the item) .

Flash sale businesses have steadily been pivoting to full price commerce as the flash sales businesses is in the decline in mature markets (Ventee-Privee and Markafoni being the exception to the general trend) . Flash sales also faced stern competition for attention and inbox space from daily deals (Groupon, LivingSocial). Ultimately companies who are succeeding in ecommerce are those who have built deep relationships with their customers based on being customer centric, logistics focused and ensuring that joy is created post transaction.

Enter the upstart

I have been following the journey of Fab.com pretty closely as I believe that they are part of a new wave of ecommerce businesses. Jason Goldberg is someone I deeply respect as he is transparent (his blog is a must read for any one in ecommerce) but they are like Amazon as they fret the little stuff. The business is unique and making lots of noise and have gone through a variety of pivots. Pivot has a serious misdirection in this case as Goldberg and co-founder Bradford Shellhammer have refocused their business 5 times. The 5th being the most ambitious I have seen from a startup (more on that later).

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The Predictive Theory on Rocket Internet

E-commerce in emerging markets is one of the keys to commerce maturation that will be seen globally in the next 10 years. The fastest growing ecommerce markets are not saturated like what is seen in the UK, US or South Korea. Thus investors such as Naspers, Tiger Global Management and Rakuten are competing against one another in emerging markets as every business wants to ensure that they have their share of the long term returns that will be seen in these markets.

However an online venture builder and accelerator from Germany entered into this race about 18 months ago and have in a very short period of time created quite a few market changing moments across the globe.

I want to define what is an emerging market in my own mind before we continue with the fascinating race seen in emerging market ecommerce.

An emerging market is one that geographic area which is inhabited by customers whom have means to pay for products but are unsure of new technology to ensure a transaction occurs on the Internet between the customer and a commerce business. The markets also faces barriers for foreign businesses which deem the market to be heavy for investment thus the investment is taken to another country or region. Barriers are: credit card penetration, Internet connectivity and logistics to deliver the bought item to the user.

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