Web 3.0 – The Future of Online Retail
Posted On July 26, 2022
The other day I visited a website which is an online shopping community where users can create, maintain and share online collections of their favorite products with other users. There is even a style compatibility test on the site where users can see how compatible they are with other users in terms of shopping habits, taste, and style. Since then, I have been thinking every day about the role that online communities will play in e-commerce and finally realized: e-commerce as we know it will go through a significant transformation and communities will not only change the rules of the game, the communities will, in fact, rule the game.
Imagine an online retail store run by its own communities. Communities decide what products to sell, communities set the online content for products, communities rate products and vendors, communities set product prices, and last but not least, communities write the content! software to boost online store! At this point you’re probably thinking this is a crazy idea. How will a retailer make money if communities set their own prices for products! welcome to Internet 3.0 – the future of online retail. In this article, I will demonstrate how online communities will take center stage in e-commerce and how they will change the dynamics of web-based marketing and selling as we know it.
Looking at various aspects of traditional e-commerce, most functions are performed by category managers, sourcing managers, merchandisers, technology, and operations teams. The tech team builds the software platform, the category managers and sourcing managers determine product assortment, and then work with vendors to actually cost products and finalize contracts. Category managers or vendors upload product content such as descriptions, attributes, images, product copies, etc. Although most of the work in this case is done by an internal team, the information for most decisions is usually based on explicit or implicit research from the client.
The power of the Internet is that it can be used to capture information about customer needs in real time, and decisions can be made based on that information. It is this power that will drive the growth of “self-tuning” applications that can evolve based on customer needs in real time. Let’s look at various e-commerce features mentioned above and see how the power of communities could alter the game.
Management by categories: Although today this feature is based on offline customer research, there is now technology available that can allow communities to vote for merchandise that is popular. For example, the website may offer surveys and other voting features in which customers specify products they are interested in purchasing. Additionally, real-time sales information could help estimate relative ranking and predict future demand for products. In this context, the category manager role can be replaced by in-app business rules that determine online assortment based on customer information and real-time sales information.
Catering: For this discussion, let’s look at the direct delivery model where suppliers ship merchandise directly to the customer. Once demand for products has been determined based on real-time customer feedback and sales history, the supplier community can be invited to participate in a “reverse auction” where they bid to supply merchandise at the lowest price, within the limits of the SLA. Negotiations currently taking place between the sourcing team and vendors can now be conducted using a rules-based open market auction model.
Product Content Configuration: Kaboodle.com already offers this capability. Communities can set up their own product content, add descriptions and images that others can search and rate. In traditional e-commerce, this is one of the most painful tasks category managers or vendors are responsible for. The collective power of communities will not only help quickly set up product content, but also ensure excellent content quality. Take, for example, a digital camera. In traditional e-commerce, category managers or vendors will set up a product page that describes the camera and provides details on the specifications. In the future, communities will be able to add content that outlines the key benefits of that digital camera and offer their independent perspectives on the pros and cons based on real-life use. This is much more convincing and will help other customers make more informed purchase decisions.
Prices: This is where things get even more interesting. Communities will be able to specify their own willingness to pay (WTP) for various products through surveys or other online mechanisms. This will help generate a real-time demand curve for the products, and the pricing rules engine will adjust the price of the product based on the demand curve and ultimately offer the product at a price that maximizes profit margins. general benefit by category or aggregate. tiers The beauty of this approach is that the pricing engine could be adjusted in real time based on instant feedback from communities and overall sales history.
Customer service : Various online retailers have now established discussion groups on various topics related to various product categories. Going a step further, discussion groups could be set up to resolve customer issues. Product experts within the communities will be able to help new product owners solve their problems or answer their questions. Not only will this model help reduce customer service costs, but it will also build “stickiness” and a sense of belonging in your communities that will result in additional conversion from online stores.
Software development: The power of this concept is that all software development for such an application can be done in an open source environment where communities actually collaborate and write the software together. Open source communities have already created some of the best-in-class applications and frameworks, even more feature-rich and superior than their commercial counterparts in many cases.
Web 2.0 introduced us to the notion of online communities and demonstrated how powerful these communities can be in building social networks that see no geographical boundaries. The future of the Internet belongs to these communities, and successful organizations will be the ones that can see this potential and build their operations and offerings with communities at the center of their business stage.
