Electric Thoughts in a Digital Era - Page 5 of 43 - A blog on eCommerce, Social Commerce, Marketplaces & Business

The E-commerce Stepchild – Logistics

I have spent a large amount of time in 2020, researching and writing about logistics. In a recent project, I have had a front-row seat to see its strain on brands. The stepchild of e-commerce is not flashy and visible by consumers but can make or break customer perception. The final mile has an enormous impact on consumers’ experience, and in Q4 2020, it will become more critical.

Logistics is somewhat opaque currently, and in most cases, it can lead to many breaking points. Amazon has changed customer perceptions based on speed. On-demand startups such as Darkstore, FLEXE, and Flowspace also add complexity, which the customer does not see.

The sector is a low margin, capital intensive part of commerce that is due for innovation. It’s a topic that is not cool, nor does it get the attention it deserves.

Is commerce a zero-sum game?

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.

The battle between the store and online.

Tobi’s nightmare company that no-one talks about

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.

The FBA Roll-up Delusion

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.

Managing the Narrative

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 or a description of a series of events.
a particular way of explaining or understanding events.

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.