BLOG STARTUPS, VENTURE AND THE TECH BUSINESS

December 16 2010
by Thanasis Delistathis

Golden age of e-commerce

The last four years have seen another resurgence of e-commerce companies.  In fact, our last two deals have been e-commerce deals and we are looking at another one.

While e-commerce has been around since the launch of Amazon in the late ’90s, there was a period starting after the collapse of the tech bubble in 2000, during which any company with even a remote connection to e-commerce was avoided by VCs like the plague.

In fact the history of Amazon’s stock price is a good proxy for the ups and downs of e-commerce.

Why is e-commerce back with a vengence?  Several factors I believe have contributed:

  • Consumers are becoming more comfortable at buying more products online, even complicated products that they used to want to “touch and feel.”
  • Marketing to consumers has become cheaper and matured: email/relationship marketing is making it easier to engage consumers and keep them buying; in addition, social media companies like twitter and facebook have become marketing platforms (friend recommendations) further decreasing customer acquisition costs; also, video has helped companies feel more confident in buying online.
  • It has become cheaper to build an e-commerce company.  Amazon’s cloud services platform coupled with robust open source e-commerce platforms like Magento have allowed startups to go after more niche areas of e-commerce.
  • New business models have made e-commerce more attractive and engaging: think of limited time/quantity sample sale sites like Gilt, Ideeli and OneKingsLane; or  group discount flash e-commerce sites like Living Social and GroupOn; custom-products, like our own FashionPlaytes.com, or targeted products, like Bonobos.com (look at story today about funding).
  • Smartphones have enabled consumers to price-compare, make decisions and order online in situations where they might otherwise have bought offline.  I hit on this insight during last holiday season when I was in BestBuy shopping for gifts.  They didn’t have a product I was looking for and so, I used my Amazon iphone app to search for it on Amazon.  While I was there I checked on all the other products I was about to buy and discovered they were all cheaper online (with no additional tax). I ordered everything online and and saved the hassle from having to carry them home.  Here is a great story on the same subject from today’s journal.  Look at this amazing chart on growth of e-commerce from smartphones:

COMMENTS

December 16 2010
by Ed Niu

And with Google and many other online based companies embracing mobile solutions, we’ll see a proliferation of mobile-based e-commerce apps and content.

December 16 2010
by Neil Rosen

So the question that has to be asked is, “does technology eclipse brand, threatening sustainability?”.

December 16 2010
by OCM

The Magento Amazon Cloud e-commerce platform puts the control in the hands of the company, rather than a web design and development firm. Get the help you need to go through the process of making your website look and function professionally.

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