The end of Friction: how Today's Consumer is Forcing e-commerce to be Invisible In my last post, I talked about one of the key trends in the retail sector - the rise of online shopping. This, however, is just one part of a wider phenomenon, and to really grasp the scale of what’s going on, it’s useful to zoom out and look at the bigger picture. Amazon’s rise to dominance is a great example of this, as they’ve been able to achieve more than simply selling things online. Thanks to their scale, they’re able to offer customers the convenience of purchasing groceries online or getting a package delivered to them in as little as an hour. Amazon has truly changed the rules of the game over the last decade, and has had a profound impact on the consumer psyche. It’s now possible to buy anything, anywhere and have it delivered right to your door. Now, to understand just how big an impact Amazon has had on the consumer’s concept and expectations of shopping, let’s look at a brief history of the evolution of e-commerce. History of e-commerce The e-commerce phenomenon began with consumers shopping at online stores where they could only use their computers. From here, the evolution of e-commerce began to progress into the phase of mobile e-commerce, through the development of the mobile phone and apps on digital devices. This phase was defined by the use of smartphones in purchases and services. A next stage was the arrival of the connected devices, enabling an even more engaging experience, by allowing consumers to directly speak to these devices in order to make purchases and use services. Finally, it is expected that the next stage of the evolution of e-commerce will be the arrival of Invisible Commerce, where the purchase is made completely without the intervention of the consumer. There are already several examples of this type of commerce, and there are now more than 15 different companies providing these types of services, and it is projected that the market for devices in this category will grow at more than 30% until 2021. Amazon has been leading the front in this evolution of e-commerce, with their purchase of the voice recognition company, Alexa. With Alexa, Amazon has provided its users with a whole new way of purchasing things, as the entire purchase process is now made through voice and natural language. Amazon users can now purchase things by simply speaking out loud, and it is projected that by 2020, more than 8 billion dollars will be spent on purchases made through Alexa alone. It is therefore not a surprise that the CEO of Amazon, Jeff Bezos, said back in 2011 that “The most important thing we’re doing is building a relationship with the consumer that's so strong, so natural, that they would think of us as the commerce and payments platform of choice”. The end of Friction It is evident that Amazon’s strategy goes beyond simply selling online. It also goes beyond creating an online shopping experience that is as seamless as possible. Amazon wants to build such a strong relationship with its customers, that they end up thinking of the platform as their default shopping choice. This is what experts call “the end of friction”, where purchases are so easy and simple, that they happen without much thought, and in a completely natural way. However, building this type of relationship is not an easy or quick task and requires a series of different steps. Consumers must go from being occasional online shoppers, to regular shoppers, and then be converted as loyal customers. What’s more, this entire process is a long one and requires a lot of patience, effort and hard work. To achieve this objective, several conditions must be in place. Chief among these is to provide consumers with an excellent service that will win their trust and loyalty. It’s also essential to have a robust supply chain that can react quickly to changes in the market. Amazon is already an example of what this strategy can accomplish. Now, any company looking to follow their path must be prepared to be constantly innovating in the area of customer experience. What’s certain is that the retail landscape is continuing to evolve at breakneck speed, and it’s impossible to predict how the end result of this evolution will look like. However, one thing remains constant - in a market that’s already extremely fragmented and demanding of its consumers, the demand for convenience is only going to get higher and higher. And this is where the invisible commerce comes in, where the end of the line is the end of friction. And it is this natural process of evolution, that Amazon and the major e-commerce companies are preparing themselves for. In a previous post, I wrote a lot about the trend of customization in retail. In today’s world, we have everything at our disposal and at our fingertips in an easy and accessible way, which means that what used to be a mass-market now is increasingly being replaced by services and products for individual consumers, based on their needs and desires. The reality is that the consumer has changed significantly in recent years. As Andrew Lipsman, Principal Analyst at eMarketer said, “Consumers really don’t want to think about purchases. When consumers make purchasing decisions under the right circumstances, meaning with the right product, in the right place, in the right way, it can be an enriching and highly satisfying experience. In any other situation, it can be a source of endless annoyance and frustration”. This is the future that Amazon, and other major e-commerce companies, are focusing their efforts on. They want to remove the stress and frustration that goes hand-in-hand with shopping, and turn the shopping process into something fun and pleasant. In my next blog, I will continue this look into the world of retail, and will take an in-depth look into the changing dynamics of e-commerce, as it becomes more and more visible.