Five Trends That Will Shape the Future of Local Commerce
Kenny Grant is a guest author. To contribute a guest post to Street Fight, contact us here.
In 1995, Pizza Hut introduced a widget to its website that allowed customers to order pizza online, marking one of the first large scale instances of online payments. Two decades later, ecommerce now accounts for over a trillion dollars in consumer spending each year, and online sales now play a critical role in the business model of some of the world’s largest retailers.
However, the commerce landscape has begun to shift again. In the past few years, we’ve seen a resurgence in innovation around mobile as technology companies develop new ways to bridge the gap between ecommerce and offline spending. The result is that digital tools have begun to impact a still-dormant, but massive swatch of spending that occurs in stores, at malls and throughout the real-world.
Here are five trends, which will shape the future of commerce over the next decade.
Marketplaces For X
Marketplaces are the new shopping mall. Why walk around for hours on end, when you can view millions of products from your mobile device, tablet, or desktop, anywhere in the world?
We’ll continue to see new kinds of marketplaces in new verticals with new experience as capital flows in. For instance, Greylock Partners and several other VCs have created teams devoted to finding the next mobile mammoth marketplace, so expect to see continued investment in a number of service-based marketplaces — plumbers, cleaners, carpenters, bartenders, event planners, travel agents, entertainers, etc — over the next few years.
The Death of Malls
Big box outlets will continue to close doors and focus efforts online. High vacancy rates will drive malls out of business, and drive new experiences and opportunities for those that will quickly adapt. About 15% of U.S. malls will fail or be converted into non-retail space within the next 10 years, according to Green Street Advisors, a real estate and REIT analytics firm.
This should lead to some exciting opportunities and significant changes to shopping malls as we know it. We could see specialty malls; rezoning malls for office space (desirable and cheap with ample food, drink, parking); restaurant courts (think Vegas, replacing food courts with restaurant courts); Amazon/ecommerce pickup outlets; and new types of shopping experiences.
Online marketplaces offer tools and services for retailers to sell more products online — shopping malls need to follow suit to compete. That could include marketing services, collaborated events or sales, and providing whatever services their store owners require.
Amazon’s push into same day delivery will drive innovation within the logistic space. We’ll see more options for local couriers/delivery companies and major retailers partnering with these providers to fulfill orders within hours of purchase. Companies can start to strategically place popular selling items throughout different areas of the city for quicker delivery times. This won’t work well for rural areas, but more applicable for major cities.
Could we see local retailers as a supply source? Absolutely. Instead of the factory, or head office shipping ecommerce orders, they’ll reroute the order to the customers’ local town where a local business can ship the product. We’re still 5 years out, but think auto-dealers — they can all see each other’s inventory, especially similar branded outlets (e.g. Ford).
As shopping malls close, businesses need to work together to deliver new shopping experiences. In other words, new ways to attract customers and keep them in store/ on premise for as long as possible. Focus on building environments where people want to be seen and heard. That could be expensive decor (think Vegas casinos), live performers, cool hangout areas, live product keynotes for brands, and fashion shows.
These experiences are extended to online interactive showrooms that customers access via desktops, tablets, mobile devices, or gaming consoles. Each platform offers new ways for consumers to discover and interact with products. This could be as simple as Google Hangouts with your favorite shop, or choose your own shopping adventure (stores offering different layouts, themes to shop from, or even virtual shops).
With iBecaons paving the way for connecting the online to offline word, expect to walk down the aisle, or browse products online with local and relevant messaging as it relates to you, your network, and your community. Consumers will further depend on social networks, reviews, referrals, community, and how people you know and trust make purchases.
We already see this today, but we’ll see more interactions between brands and consumers. It’s up to brands and businesses to discover new ways to encourage and incorporate new ways of social proof or UGC to drive purchase intent both on and offline. It’s only a matter of time until we see this in store.
Kenny Grant is the founder and CEO of Promo, a mobile first marketing tool for small businesses and brands to promote products and services online. Prior to founding Promo, Kenny worked as an EIR at Full Stack Ventures and successfully launched digital products to 60k small businesses at Ziplocal.