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etailers vs retailers

In the etailers versus retailers war, the etailers are winning. Market shares for everything ecommerce are growing. Tech solutions have concentrated efforts on customer management and marketing software for ecommerce platforms. Consumers have responded by shopping online in their pajamas in the middle of the global night from every possible corner of the world.

Big data analysis and trend and pattern prediction using deep neural networks will continue to form a growing part of planning and market analysis. Human-AI hybrid management teams will become more common. We may see something similar in the way stakeholders are planning and implementing complex infrastructure development now. Business may find itself regularly collaborating with government, education, and the private sector to plan, manage and fund business projects. This collaborative organizational model will allow the heavy burdens of regulatory compliance, funding, public opinion, environmental impact, and other challenges to be met by a team with a variety of skills. This new collaborative model can reduce the risks associated with the digital transformation of business.

There are, however, some limitations and challenges that remain. Some industries are very well suited to ecommerce, and some are less so. Who are the winners so far?

Medical and Legal Ecommerce

Consultations with experts–doctors, lawyers, accountants, and other specialty information brokers are very well suited to ecommerce applications. In the US, the federal government recently passed a bill allowing insurance reimbursement through Tricare, one of the federal insurance programs, for telemedicine. This bill signals tacit approval for these services, and they have responded by developing very workable systems for both medical and mental health visits. Tech such as video conferencing allows face to face meetings, and systems have been put into place to limit the possibility of diversion or misuse, such as the restriction on prescribing controlled substances through a teleconference. Tech which allows interstate prescribing electronically to drug stores who are in the system, such as the chain drug stores and those registered with the large insurance providers, means medicines are available immediately after a visit. New technologies allow home-bound patients to deliver results of weights, blood pressure readings, and blood samples to the medical provider through electronic systems.

Legal visits include the ability to send documents via email and sign contracts and other documents online. Accountants can work remotely and send taxes electronically. These systems are all very well suited to ecommerce. Other types of information brokers, such as freelance workers who perform units of work remotely, are well suited to ecommerce.

Consumer Goods

Consumer goods as global ecommerce products raise more challenges. Transportation infrastructure can be the shaky foundation of the whole industry, and smaller players and those in remote regions are at a significant disadvantage compared to the giants who are developing systems that allow free shipping in two hours. When consumers develop the expectation of shipping that is fast and free, that expectation devolves onto the smaller producers. But the ability to ship quickly and free is based on the economy of scale.

As with most other industries, the ever-moving evolution of technology has had a direct, and impressive impact on retail. The way that consumers shop, purchase, and receive the product points to the fact that it is a radically different world today than it was a short generation ago.

  • Virtual Shopping.
  • Virtual Try-Ons. Retail companies have implemented tech services that allow consumers to see themselves in apparel, without even trying it on.
  • Virtual Experience. You can go shopping for new headphones, and experience a cruise while you’re at it.

The aforementioned are only a few examples that point to the wide-ranging implications of a retail industry that is being drastically altered by both the technology that is the child of modern science, as well as the expectations of the tech-savvy consumer.

Taxes

Taxes across regions and countries are also challenging the ecommerce market, as are currency conversion and money handling systems. These systems are working well for both the professional information services, such as remote consulting, as well as the sale of consumer goods. While this tech has been developed, and is working, security of financial data remains questionable, with frequent breaches of private financial data being hacked and sold on the dark net. At this point, mobile money systems such as Paypal are working, but they are also very limited in government reach. The system will be less agile and flexible if and when tax authorities can reach into the systems for information and tracking.

Environmental Stewardship 

The question of environmental stewardship, while less of concern for many compared to other challenges in ecommerce, remains an issue of significance, as transportation across the globe for consumer goods raises the carbon output of product development, manufacture, and distribution  to ridiculous heights. The local movement has stalled at fresh food. Those who reimagined commerce as small nodes of local production and support for consumer goods have been swept away in the excitement of NGO-supported local artisan workshops with ecommerce platforms that allow consumers to feel good and get capiz shell earrings at the same time, even if those earrings take a truck, a boat, a train, and a truck to get to the door.

Which leads to the final challenge for ecommerce: the world is an unequal playing field regarding disposable wealth. The movement of consumer goods is unbalanced, and countries who are still working toward financial stability depend on the markets of wealthier countries to sustain that market. If farmers in Indonesia have stopped growing food, because it is more profitable to turn food-production land into plantations of cacao which they can sell in the commodity markets, they are left with paying for imported food to replace that which they no longer grow. This sort of short-term gain is not sustainable in the long-term, but the lure of having access to the rich markets of the world has many people looking at their bean fields and dreaming of the richness of chocolate.

Digital Transformation

Automation and digital methods of managing payroll and benefits allows companies who specialize in the area to invest in the new technology, rather than business investing in new technologies across several areas of responsibility, such as human resources, finance, accounting, marketing, etc. We can expect the trend toward ecommerce to continue. Businesses that specialize in a single field, and can invest in the new technologies, will find their market share growing.

For more information about e-commerce and digital transformation, please contact us.

By Georg Tichy

Georg Tichy is a management consultant in Vienna, focusing on top-management consultancy, corporate reporting and crowdfunding. Furthermore he helps establishing and funding start-up's. Dr. Georg Tichy is a lecturer at university and trainer for start-up's, takes on speaking engagements about financial and nonfinancial management-related seminars and conferences, and publishes on current economic issues in professional journals

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