Ecommerce needs these 2 things to dominate retail once and for all

Photo credit: Freepik

In some sense, VCs are in the profession of predicting the future. But iterating from the present creates a trap of linear thinking and blocks your mind from visualizing step-function changes.

As a thought experiment, I wanted to parachute into a hypothetical future that seems extreme at first glance and work backward to see what building blocks we might need for this future.

What would have to happen for ecommerce to account for 80 percent of retail sales?

I think two things have to be true for this to become reality:

1. Consumers can enjoy better user experience buying online vs offline.
2. Companies can enjoy higher margins selling online vs offline.

There might be a temporary tradeoff between #1 and #2, but I think both of these will eventually need to be true at equilibrium for such a massive, systematic shift.

So, what are the gaps? What innovations need to happen to close them?

Better user experience

Looking across the user journey of buying stuff online, there are still areas that present significant experience gaps:

Discovery

There are two ways to think about discovery:

1. Accidental discovery: The consumer discovers a product she wants to buy that she didn’t think she needed.
2. Intentional discovery :  The consumer knows she wants something from a product category and finds the particular product that she’d like to buy.

I’d argue that both forms of discovery are pretty underwhelming with present-day internet technology and user experience delivery.

To deliver accidental discovery well, the “environment” within which consumers spend time for discovery needs to be both enjoyable and relevant . This is  ideally a highly entertaining experience with products that match their tastes but also pushes the boundary to bring surprise and delight.

Higher margins