The global eCommerce industry is growing at phenomenal rates, and so is innovation in this field. Every new disruptive technology in the world will impact the way we are doing eCommerce today from blockchain to 3D printing, AI, and Augmented Reality.
It's the present future because all these disruptions are already happening. Just not yet at scale, which offers tremendous opportunities for those that can leverage these technologies to their advantage early on.
In this series, we will explore the opportunities and challenges introduced by these new technologies.
We already have ways to print on many different materials from plastics to organic substances, carbon fiber, gold, steel, all the way to printing medicine using molecular printers.
3D printing technology is evolving at a rapid pace, and together with robotics and other forms of industrial automation, these new technologies are creating unlimited possibilities, especially in disrupting the eCommerce supply chain.
When mentioning 3D printing together with eCommerce, the first thing that comes to mind is printing entire products on-demand. While this will be a reality one day, and maybe sooner than we think, the current use of 3D printing is mainly found in customized mass-production, and product development.
For example, companies like carbon3d.com, have teamed up with adidas to 3D-print midsoles. Customers can choose different setups, for example, based on the type of sport they are performing. 3D printing, in this case, enables the creation of new material structures and variations, rather than a personalized shoe that is produced on demand.
Other companies take it one step further. Oltfoot.com produces 100% customized Orthotic Sandals using a combination of 3D scanning and printing. From an eCommerce perspective, the challenge here is the digitization of the feet, which requires a special 3D scanner and therefore is not available in just any household.
Ministry of Supply is offering a 3D Print-Knit product, which is "printed" on-demand, but customization seems no different than any other fashion product, i.e., size and color.
While all these examples are not yet creating a fully customized product, en masse from the comfort of your living room, 3D printing technology is evolving fast and bound to change the way we buy and product products.
The future may look like this: we buy a product online; the order gets sent to the closest 3D printing station where an orchestra of different 3D printers, sewing machines, and robots have them assembled, all on-demand. Multiple brands will use these unified stations to produce their products, and from there, they will be delivered to your home using a robot.
Crazy? Think about it, from a technical perspective; we can do all these steps today. The question is not if this will happen, but when will this be economically more viable than producing goods in a factory overseas.
There is one challenge tho, which is the copyright of the product itself. If 3D printing, as described above, becomes freely available, then protecting intellectual property and product design could be more challenging. However, the sheer physical aspect of printing, assembling, and having the right material should give clues on how this issue could be tackled.
Also, think about the potential impact on the environment instead of producing products in a country far away and then shipping them across the world, this way of production could be more sustainable.
Most traditional eCommerce businesses have the following core functions; sourcing, stock management, merchandising, marketing, fulfillment, and support of the product. However, in a future where products get created on-demand, the roles of stock management, and fulfillment will be obsolete and outsourced.
The present situation is that if you are running an eCommerce business, most likely, you will not see the need to invest in a 3D printer, nor see an instant disruption to your business.
Where do you see your role in the eCommerce value chain?
Some companies own the intellectual property and the product brand, some companies that sell and market these products online, and some that produce and deliver them.
Today, many businesses fulfill all the above functions from designing, manufacturing, and selling. However, in the future, these functions will be split across specialized entities.
This has already started a long time ago with outsourcing the manufacturing to countries like China or having eCommerce giants such as Amazon do the sales and marketing.
Because each function will be replaced by new technologies.
Product development will be data-driven, highly customized, and rapid.
Sales and marketing will be driven by the likes of Facebook and Google. Their AI will determine and distribute the customers' share of wallet amongst the brands that want to sell products.
The fulfillment of orders will be automated using robots, machines, and 3D printers.
If you are producing your own products, then maybe 3D printing can help you create efficiencies or more personalized products for your customers, similar to how adidas or Nike are trying with their shoes. But even as a reseller, adding a customized touch to your products could have a positive effect. How about 3D printed customizations, name-tags, or engravings to start with?
Also, creating accessories or spare parts on-demand becomes a viable reality. Imagine the lost button on your jacket or blouse, how great would it be to order a single original button when you need it, have it printed and delivered to you.
Product design companies are already preparing for the changes 3D printing will bring in regards to producing and licensing their creations. 3D printing innovation will further bridge the gap between the digital and the physical world, and so will Blockchain technology.
In the past, the creation of collectibles was more complex and not available to everyone. Think about baseball cards that were printed on professional machines producing high quality, durable glossy paper cards. People perceived these cards of value because they were limited and tradable. These cards didn't have the problem of double trading, because it's a physical product, and once it's gone, well, it's gone.
Today, little monsters that you collect by walking around using augmented reality on your smartphone are considered of similar value, if not even more.
Today, the dissemination of digital goods, such as the Pokemon Go monsters, electronic tickets, vouchers, and other forms of value exchange, is managed by the owner of the product. For example, Nintendo keeps track of who owns which monster in Pokemon Go.
The blockchain has given us a new decentralized way to share virtual goods that keep their value similar to the comparison of a baseball card. Take a look at CryptoKitties, a blockchain game that allows you to breed kittens. Each kitten is unique and owned by you and only you in your digital wallet. No kitten is the same. The most expensive kitten was sold for over $170,000.
Blockchain technology has introduced new ways to manage the exchange of value using a decentralized model and allows us to not only create virtual goods but counterparts of physical ones.
Imagine a physical product that you have bought, and it has a digital counterpart that sits in your digital wallet. This digital version can do many useful things, such as hold a license, provide access to support for a certain period, degrade a warranty automatically, and so forth.
Blockchain company BLOCKv has created one version of this type of Blockchain application, which is called Vatom. Built on the Ethereum Blockchain Vatom allows the creation of digital objects that are unique in the world and have supporting smart contracts and other interactive functionalities to transform their state over time.
This type of technology opens new ways for consumers to interact with digital counterparts of a physical product, but also creates opportunities for strategic partnerships between brands.
In today's setup, if a brand wants to reward people that have purchased their product, they create their own centralized loyalty program. As an eCommerce operator, that is selling products of another brand, you do not usually gain anything from the loyalty program, and as a customer, you have to obtain your rewards directly from the original brand. That's one of the main reasons loyalty programs exist in the first place.
However, using digital objects and smart contracts, the customer who bought the physical asset from any distributor can claim rewards and benefits much easier as proof of ownership exists through the digital object counterpart.
In the future, this technology will also enable customers to obtain value in the digital world and exchange it in the real world. Brands will be able to disseminate digital goods using displays in, for example, metro stations, and consumers can buy that unique piece, put in their wallet, and receive the physical counterpart delivered to them.
Imagine you have a limited supply of a particular product. One hundred pieces of unique handbags as supposed to managing a central inventory and making sure you are not selling more than one hundred through various channels; each sale made online references an actual unique piece.
I already mentioned 3D printed pizzas earlier. Zume, Inc. was pioneering this idea since 2015, by creating a delivery van that would bake the pizza on the way to the customer. (The company shut down in 2020 according to their website for unknown reasons) Pizza Hut and Dominos experimented with similar models.
Many innovations fail at the first attempt, that's the risk and beauty of the game. But autonomous and robotic delivery is an obvious progression.
It's not only efficient; it's safe. I can confidently say that I see a delivery motorcycle crash once per month. By being pressured to adhere to short delivery times and long working hours, it's only expected that delivery people crash one day, and that's no good. Having a robot, autonomous car, or even a drone bringing me what I want, safely and fast, sounds like a pretty good idea for everyone involved.
As soon as governments around the world find a way to regulate autonomous vehicles en masse. It's no longer a technology challenge, but a challenge of regulations.
Search for Amazon Robot Warehouse on YouTube and you should find a video of an Amazon Fulfillment facility that shows their robots bringing the storage shelves with products to the person picking them. It's a chaotic warehouse system if you pay close attention to the items on the shelves. The order picker clicks on the order, the robot brings the entire storage shelve, the picker takes the item, done.
The first eCommerce store I built was in 1999 for a mail order catalog, and the money we lost because of wrongly picked orders was enormous. And no-one liked picking either.
2014 Amazon launched its Dash Button. A tiny button that you could place somewhere on your house, and when pushing the button it would send an order for items such as washing powder, toilet roll (as we know now, very important apparently), cat food, and what have you.
In the meantime, Amazon has discontinued the physical button and turned it into a virtual button. (remember the digital objects from earlier)
While I always liked the idea of the physical button that magically orders things, the emergence of a virtual button makes sense. Especially if you are Amazon and are trying to get people to stop pushing buttons, but use your voice to command Alexa to order you whatever you desire.
Search for "Google Assistant restaurant reservation" on YouTube. The AI in the demo makes a booking for a haircut appointment, via a phone call. That's a machine acting like a human, taking care of your reservation.
However, for eCommerce business owners to get involved, you will have to use one of the available services such as Alexa, Google Assistant, Sira, or Cortana, as obviously creating your own AI will be a tough undertaking at this point.
But you can still build a voice application for let's say Google Assistant that allows your customers to search and order from your eCommerce store.
Is that worth it? Do your customers have access to voice services? If you have a smartphone, the chances are high. Ask Siri on your iPhone to order you some pizza and see what happens.
If you are ending up with a list of pizza places that accept deliveries, think about the feasibility of helping your customers order your products using this way, or at least finding your business.
Overall your opportunity today is to optimize your online presence to be at least available on voice services and especially voice search. This means, if I ask Google Assistant for a product, maybe you can be there on the list.
Then, think about how you can utilize these existing voice platforms and integrate your technology into them. Maybe you already have an app, and you can integrate your app with the respective iPhone or Android service.
There are things you can do today to enable people to buy your products using voice command.
The future will look very different for sure, where interfaces, as we know them, will vanish more and more, and we will use our voice to control devices, control our surroundings, and for sure, order things online.
Personal shoppers always seemed to be a luxury of the elite. But in recent years, more and more services have emerged that offer a virtual personal shopping experience.
Mr. Draper is such an example where you complete a questionnaire, have a call with a stylist, and from there onwards, receive new clothes delivered using a subscription model.
Today, personalization mainly refers to the delivery of content to the right person at the right time. For example, product recommendations, birthday reminders, or gifts for the spouse. These recommendations become better through the use of Artificial Intelligence and precisely machine learning. By sampling the behavior of millions of customers, we can predict the next best purchase for a customer, and then use this information to maximize returns.
The biggest advertising networks today are Google and Facebook, they are actively helping you to sell your products, and they know more about your customers than you.
That's a challenge because as their algorithms improve, they will be more and more in control of who will buy what, and when, from whom. That's why having a robust data strategy is essential for any eCommerce business. Data helps you create a more reliable connection with your customers and enables you to take ownership of personalization initiatives.
But it is not only about using data to target and influence your customers. In 2019, we built an application that would measure weight, arm length, and height of a person as part of a recruitment process to validate their fitness for a job position that required a specific level of physical fitness.
Combine that with the vast amount of information we can collect using fitness and health trackers.
All it takes today is some data and a couple of API calls to provide your customers with very engaging experiences.
For example, calculating the perfect shirt size based on the pictures from your social media profile, your color preferences based on your past purchases, or predicting your preferred style, it's all technical reality today.
The future, however, will bring another level of personalization and customization, as AI tools become more sophisticated. The perfect dress, the perfect shoe, the fridge that replenishes itself are just around the corner. The technology exists; it is only a lack of adoption that is holding these innovations back from becoming mainstream.
Virtual retail experiences are the future of retail and shopping malls.
The first one I saw was created in 2011, Search YouTube for "Tesco Homeplus Virtual Subway Store," where users can use virtual stores in the subway. These virtual stores are displays that show a picture of the product with a QR code the customer can scan to order the product.
Imagine you are on your way home waiting for the train, grab a couple of groceries, and have them delivered to your home from the nearby store. Well, don't imagine it because it was already done as per the Tesco case mentioned above.
Let's take a look at shopping malls. Most malls have already transformed into destinations with a mix of stores, entertainment, health facilities, spas, garages, and a car wash and a place where you can store your kids.
It's the same principle as to where large cities attract the largest companies and the most people, and the most investment, the same way the large malls attract the most people, and the largest stores and so forth.
This traffic creates footfall, and footfall leads to sales. That also means that your retail store could be seen as a massive advertisement, with the advantage that it can receive cash and hand over the product.
The question is, are malls the only places where there is such footfall? And what if your retail store could be virtualized and placed in hotels, metro stations, restaurants, stadiums, public beaches and allow people to snap and buy products that get delivered to them?
Remember, digital objects and smart contracts combined with augmented reality? By using this technology, retail experiences can focus on the experience itself. In the future and due to the blend of the virtual and physical world the purchase, and fulfillment will be an automated process, which leaves us with the experiences that we can create to get people to buy our products.
Similar to the example of the Tesco Homeplus Virtual Subway Store, retail locations can be everywhere. The billboard on the road can offer you a personalized promotion that is only available to you, via the augmented reality through your phone.
The fridge that refills itself, we got that one sorted, and most white goods manufacturers have their version of this technology innovation ready for the world. However, from an eCommerce standpoint, the more exciting approach to IoT is the tracking and serialization of the sold goods.
Let's say you buy a pair of shoes, and they have a unique RFID tag attached to them, this would open some new opportunities for business.
Inventory management could become much easier. Instead of manually counting how many items are left at a specific location, the IOT enabled items can track themselves on the way out. This would avoid the need to count inventory manually, and managing backorders becomes much more comfortable too.
This concept also opens the way for automated checkout concepts like Amazon Go. Here you can enter the store using the Amazon mobile app, simply grab everything you want and walk out the store where sensors will pick up all the items you took. The app will charge your credit card automatically—magic, available today.
If every product that is purchased has a unique identifier, you could track each physical product back to the store. You could also associate the item with any sort of additional data, for example, an insurance policy or warranty.
You could even track the raw material that the product was made of, and enable a recycling rewards system. This system knows what materials are in the product, and can issue a reward back to the considerate disposer.
Now link that product back to the blockchain ledger where its virtual counterpart resides, and you closed the circle between the virtual and physical world.
Welcome to the future - today.
Think back ten years, what technology innovations can you remember that have been downplayed? How many people said that these inventions are not here to last? Go another ten years back, can you think of anything similar?
Everything we discussed is not theoretical. All these things are real. The same way the mp3 player existed in reality, and the internet existed in reality, and social media existed in reality.
Precisely in the same way everyone said these things wouldn't last, they are a bubble, the same way the technologies we explored in this series will lead to a massive disruption in the future. Those companies that do leverage the opportunities they bring will go out as the winners.
June 14, 2020
May 17, 2020
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