Skubana's E-Commerce Predictions for 2015
February 23, 2015 7 min read
The e-commerce landscape is vast and truly knows no bounds. It may be difficult to keep up with what may be happening next, or what’s important. We here at Skubana would like to offer our contributions to the expert e-commerce predictions that have been making the rounds in the blogosphere in 2015.
We’ll continue to keep up with these ideas and offer other analyst insights, industry research and true recommendations & strategies on how to achieve selling success.
Uber has singlehandedly changed the way consumers think about receiving goods and services. No longer is the idea of "instant delivery" just for restaurants, florists and taxis.
Successful online retailers like Amazon, eBay and Google have gone to great lengths to provide consumers with instant gratification in the form of same-day or even same-hour delivery. Drone delivery has been pronounced as the possibly the missing link in the shipping chain that allows for nearly immediate e-commerce deliveries, with predictions that around 12% of a cumulative global spend of around $100bn on drone tech will be for civilian uses.
Uber's approach of leveraging technology to optimize product and service delivery has changed not only for e-commerce, but also Supply Chain logistics. Earlier this year, Uber’s CEO Travis Kalanick announced the company will eye logistics as its next frontier, stating, “We’re in the business, today, of delivering cars in five minutes. But once you’re delivering cars in five minutes, there’s a lot of things you can deliver in five minutes.”
Consumers expect this type of immediate service right now. Uber has played a big role in that. But will startups like Postmate and Lalamove learn from Uber's mistakes and fulfill their high dreams of being the "Uber for X". Nonetheless, the Uber knows it cannot lose marketshare and aggressively entering the logistics market and testing this strategy in the US and abroad. Uber Essentials, for example, was an attempt to deliver household goods on demand. It was recently dropped from Uber's product offering due to low consumer acceptance. If you want to move a mattress to a new house, ride with a large pet, or send items to a friend, UberCargo can do that for you in Hong Kong. UberCOOL, the company's partnership with GE & Quirky is an on-demand delivery of Aros, the world’s smartest air conditioner.
As mentioned above, instant delivery is still a top goal for Amazon. Consumers expect it now. While Amazon battles the US government bottleneck on drone usage for PrimeAir1, the company will continue their expansion of their fleet and warehouses.
According to some logistics experts, same day delivery requires a fundamentally different logistical framework as explained here. Amazon cannot simply increase frequency of UPS trucks and build new warehouses. Even this well oiled machine doesn't move fast enough for same day delivery.
Along comes the USPS. With the postal service's financial situation in chaos, Amazon announced in November, 2013 that it was working with the government entity to deliver packages on Sunday and holidays, starting in Los Angeles and New York. The relationship with Amazon has been a rare bright spot for the USPS, which has struggled with falling first-class mail volume.
Last year, Amazon and the US Postal Service started piloting a program calledAmazon Fresh, where same-day deliveries of online ordered groceries will be made in select cities. The USPS has agreed to lend Amazon its postal fleet from the hours of 3:00-7:00am. The program has now expanded to New York with mixed reviews.
The lukewarm performance of these two programs has not stopped the continuing partnership between Amazon and the USPS. In fact, taking on a struggling entity like this might just be one of the ways to achieve Jeff Bezos' vision of e-commerce and logistics domination.
Alibaba, China's answer to eBay, Amazon and Paypal has moved quickly after being one of the largest IPO's in history. Their growth by acquisition, with 11 Main (an online shopping website created by jointly by two US firms it acquired back in 20102), Intime Retail Group (a chain of Chinese brick-and-mortar stores), Taobao (a Chinese online clothing store), and TMall.com, which offers authentic Western brands to rich Chinese customers who are tired of wearing Jim E. Chew shoes and Bright Ling watches.
The problem is that Alibaba is still identified as "China's answer to eBay, Amazon and Paypal." Their goal is to become an international player, where the company headquarters just happens to be in China. With Alibaba showing earnings this quarter, that were just shy of predictions, $4.22 billion compared to the estimated $4.42 billion they will look to tap into new markets for future growth.
In the fall of 2014, eBay Inc. announced it will spin off its PayPal payments unit in the middle of this year. Either company will be logical acquisition targets for Alibaba.
eBay seems the most logical. It lines up directly with how Alibaba runs their business and exposes them to the US, according to Gene Munster of Piper Jaffray. Alibaba acquiring eBay is an immediate marketplace presence without having to struggle with building 11Main. Additionally, it is a big reversal of events for eBay. In 2005, Meg Whitman, then eBay’s CEO, attempted to acquire part of Alibaba’s business after failing to beat the Chinese firm in its home country. Jack Ma just wants to play nice in the river with eBay and he wants to do it on his own terms. In advance of its separation with PayPal, the company is exploring a sale or public offering of eBay Enterprise ( Including GSI Commerce along with Magento3). Even further indication that eBay is looking to get back to its core roots when it held no inventory nor operated warehouses.
PayPal would be an attractive option for big companies seeking to establish a strong position in online payments.
Separating PayPal makes it a potential target for larger players like Google, Amazon, Visa/Mastercard, all of whom have tried to build online payment platforms with varying degrees of success. With the success of companies like Stripe and Square, old time giants need a popular technology to quickly get them into this space. Alibaba hopes to tackle two things at once. Be a player in the online payments space and give its customers customers the trust and security that comes with a recognized brand like PayPal.
Google and Amazon have never seemed like likely competitors. Google powers search and Amazon is shopping. However, that that line is continuing to blur more and more lately. According to data from research firm Forrester, 39% of U.S. shoppers began their product searches on Amazon, while only 11% began their searches through a traditional search engine such as Google. As Google is seeing more of their product search market share move to Amazon, they are creating new ways to grow their ecommerce presence.
The goal: To transition Google Shopping from simply being a product search referral engine to more of a comprehensive e-commerce experience.
Google's answer to Amazon's "Buy It Now" button - Google "Buy Now" that could be embedded directly into the search engine results pages.
Google's answer to Amazon's Same Day Delivery - In October, Google announced "Google Express" making same-day delivery on Google Express available for three different prices: a flat rate of $4.99 per order, a monthly membership fee of $10, or an annual membership fee of $95.
Google answer to easier Payment for your purchases - "Google Wallet" - Earlier this month, Google announced they are considering acquiring Softcard, a mobile payments company that was formed out of a consortium of AT&T, Verizon, and T-Mobile. You may soon be buying more on your mobile devices with Google pay than ever before.
Big things are certainly on the horizon for all those involved in the eCommerce world and we here at Skubana look forward to supporting you through every moment of it.
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Written By Chad Rubin