Monday, November 22, 2010

Why B2C E-Commerce Has Been an Utter Failure

Flashback to 1995. The internet exploded onto the scene. Windows 95 was a game changer. Apple was dead. AOL was the Internet. IPO's were going crazy. Sites like and were coming into being. Walmart was being slammed in the news for being slow and stodgy. WebVan was taking over the Grocery world. Bricks and Mortar was going to die. None of us needed to leave our house to buy things anymore.

Insert Sounds of Crickets Chirping Here.

In 2008 E-Commerce was still less than 4% of US retail Sales. LINK

Why so? Is it E-Commerce of Human Behavior? Or a combination of both. I say both. Here is why.

Human Behavior - We like shopping and browsing. It is a social activity. Nothing beats seeing, touching, tasting for most things. It get's us out of the house. It is much more impressive to tell someone you were shopping at the Audi Dealer or Tiffany's or that Funky Clothes Store in person, than by saying you went to their website. 

It's fun to try on clothes. I remember I had a girlfriend in 2001 who wanted to change me from beach/surf casual to more urban hipster. We went to Melrose Ave in LA and went to the men's stores. I had beautiful sales women dressing me up so my beautiful girlfriend could give me feedback. It was awesome. Can't do that online can you? 

And don't we love having people see what we bought? Whether it is a Flat Screen 70" TV being rolled to the car from Best Buy, walking Manhattan with Bloomingdales Bags, or people seeing us pushing a cart with new plants to our car from Home Depot. 

What about that cache of being seen in a store? The Human Vanity Quotient (HVQ). And we want some things now. We just do. This will never change. BUT there are so many things that we pay for in person that we would be ok moving online if online was better!

It's E-Commerce - It sucks. It does not mimic real life. When I walk into a store my eyes can absorb and my mind calculate 1000's of items in minutes. Try that online. Next time you go to the store like a supermarket or Macy's take a 14" x 10" Frame and try shopping only by looking through it. Now think of how online doesn't even allow us to do that. We see pages of lists. We have to scroll. Imagine trying to shop at the supermarket. You walk down an Aisle. Might take you 5 minutes to browse about 200 Brands and 600 different items. Try doing that online page by page. 

We like Discovery. We know every unique boutique at the mall or small business can't be found online easy. I can go to a shopping district and browse shops so much faster than online. Some of this can be fixed with a better User Interface using Virtual Reality and 3D technology. But it's going to take years and billions of dollars to get there.

So until technology improves the online experience E-Commerce for B2C is going to remain just a small part of Consumer Spending.

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