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Four Ecommerce Models Disrupting Traditional Retail

Four Ecommerce Models Disrupting Traditional Retail

Four Ecommerce Models Disrupting Traditional Retail

The retail web is changing as new types of online stores emerge to meet consumers demand for utility and experience. Widespread connectivity will continue to transform e-commerce; seamlessly integrating the online and offline worlds, and ultimately leading to a form of augmented reality that allows a more elaborate presentation of retail goods. Peer reviews will become a real-time decision-making tool in physical stores as well as online, and social networks will become critical for brand awareness and customer preference. Pure internet retailers and brick and mortar stores with online portals alike are reinventing how we'll shop online in the future. We've noticed a handful of particular e-commerce trends disrupting industry; direct to consumer cutting out retail middlemen and physical stores; subscription models offering curated exclusivity; bundled products, providing goods and tools to create something at home; and me-commerce, allowing customization of products.



Direct to Consumer


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The internet is changing the business of fashion, figuring out new ways to cater to and communicate with consumers. Direct to consumer e-commerce models bring non-commodity, emotional products online. Luxury clothing retailer Everlane has recently attracted a lot of attention for it's low-cost high-quality goods which eliminate the middleman and overhead from a brick-and-mortar store. Their minimal aesthetic and transparent philosophy has drawn nearly a quarter-million members. Everlane also differentiates by sparing offerings of only the most relevant products, to avoid overwhelming browsing and choice. Founder Michael Preysman believes,"we're selling a product, at the end of the day, but in a lot of ways, we're selling a product and we're trying to get people to buy less." Sole Society takes a similar approach, releasing a new shoe every day to members, keeping costs delightfully low at the same time. Fab reintroduced itself this past year, moving away from flash sales and allowing shoppers will now have the option to receive emails only about items within categories they've explicitly "followed." All of Fab's departments are now "followable," meaning you can choose to just get emails when new items are available in, say, the Home, Pets, and Food categories. Fab also offers “Exclusively Fab” products, designed by an in-house team, as well as a "Designed By You" option for shoppers to custom-order products.



Subscription Models


Birchbox


Consumers can now subscribe to everything from healthy snacks and updated work clothing by the season, to pet food and baby products. Subscription based models are most sustainable when a product is a necessity, or an absolute passion. Subscription based success story, cosmetics distributor Birchbox, leverages sampling and an element of surprise to delight consumers to 'discover their next everything.' Founder Katia Beauchamp was inspired by the idea that every woman would want a beauty editor best friend to help them curate the copious amounts of beauty products on the market. Beauchamp faced a difficult challenge to develop an online business for products that demand to be touched and tested. Her solution - every month subscribers receive a gift box full of  high-end cosmetic products to sample and test. The brands are putting samples in the hands of customers who are paying to be acquired. The hope is customers become enamored enough with some of the sample products to buy them full-size on Birchbox's website. Birchbox has supplemented their online experience with tutorial videos, and utilized social media as a referral tool.



Bundled Goods and Services


Plated

Fully conceived meals to parties in a box, e-commerce bundled goods bring ease and a new kind of experience to consumer's homes. Plated, Blue Apron and HelloFresh all deliver fresh ingredients, recipes, and sometimes even the tools to create a restaurant quality meal in your own kitchen. With an increase of cooking shows and nutritional news, consumers care increasingly what they eat. Bundled meal services cater to those who don't have time to recipe select or grocery shop. In addition, many bundled services put inspiration and instructions near the checkout. This not only delivers brand reinforcement, it gives the consumer additional value to keep them returning to the content and products.



Me-Commerce


Everlane.


The most disruptive force in e-commerce is in fact tech savvy female consumers - especially in the Me-commerce sector. The idea of Mass Customization is not new, but the accessibility of customized products and services has never been as real as it is today. Saturation and communication is accelerating. People seek differentiation, through access, through individuality, or through price. 'Me-Commerce' platforms provide almost universal access and unique experiences at affordable prices have placed the consumer premium on individuality. Boston in particular has become a hub of 'Me-Commerce'; Home to the likes of Gemvara which lets users create custom jewelry, Blank Label which lets users design their own dress shirt, and Custom Made which offers a platform to connect consumers with custom product makers, among many others. With higher rates of smartphone utilization and new media, women are poised to provide the social force necessary to both make Me-commerce startups successful and provide the catalyst for traditional retailers to consider exploring new business models. Since so many customers enjoy the process of consumption, it could be argued that they derive even greater pleasure and value from customizing their own products. The implication is that mass customized brands are then experienced at a very profound level.


The Birchboxes, Everlanes and Custom Mades will innovate around using design and user experience to part with your money online in exchange for a product that adds a little something extra to your life, home, and wardrobe. E-commerce companies must place emphasis on the details - their design aesthetic extending to their website, the relative relationship to the kind of content, to the layout correlating to the device accessing the content. Mobile sales make up 20% of all retail online sales, a third of an increase from this time last year. This is evidence that smart retailers are adapting their sites and apps for mobile, continuing to drive more utility for e-commerce consumers.*


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*Source: Shopify