The past decade has brought new frontiers in measurement and attribution. But for The Drum’s deep dive into e-commerce, James Addlestone from Journey Further says it’s got us addicted to short-term tinkering at the expense of what really matters.
Of course, we can get deliveries faster. We can access more products, more sizes and more brands. But has our online shopping experience become more pleasant or efficient? I am not convinced.
E-commerce has grown approximately 5.4 times over the past 10 years, from $1 billion to $5.4 billion. Hardly the sharpest insight, but bear with me. In 2012, there were just over 2 billion Internet users spending 83 minutes online per day. Today, more than 5 billion spend 192 minutes a day. That’s 166 billion internet hours to 960 billion internet hours. In 10 years.
The market has been multiplied by 6 in 10 years, but e-commerce spending has not increased at the same rate as Internet use.
There are, of course, many reasons: low-income people surf the Internet, unable to match the expenses of early adopters. General “internet” use cases have multiplied, with significantly more time spent on social media per user (up to around 50%).
Basically, we just haven’t really improved e-commerce over the past decade.
Explore the Amazon
Watch a like-for-like comparison of Amazon’s website in 2012 vs 2022.
After about 3,650 days of “optimization”, what differences do you notice? The site in 2022 is a bit cleaner and smoother. The product has more pop and the navigation bar is… easier to navigate. But given that we live in a world where the one constant, we’re told, is that the world is changing faster than ever, and where (according to Gartner’s hype curve) we’ve been overwhelmed by breakthrough technologies at recent years. decade, the improvement is disappointing at best.
However, given the millions Amazon spends on its data science capability, is the recommendation engine and UX much better and smoother?
The resemblance is staggering. When Internet speeds are 5 times higher than in 2012; when photography is higher resolution and more accessible than ever; when you can shoot videos in 10k; when websites can be created with the press of a few buttons; when there’s more competition, more investment, more data, better algorithms, and more experience available…we’ve spent a decade playing within what we believe to be best practice.
Why haven’t we done better?
E-commerce has made (apparently) easier than ever to measure short term impact of the activity. This had considerable consequences.
This has made digital channels primarily focused on the short term. We have become addicted to A/B testing. There is a parallel universe where it allows for braver decision-making, riskier creativity, expansive “blue sky” thinking – knowing that if the test fails, we have learned something and can return to the status quo. But this world did not materialize. The best experimenters understand the opportunity that long-term A/B testing offers. They understand that a series of short-term tests will only ever help us achieve local optima. Unfortunately, there is not an overabundance of the best experimenters.
This sucked in investment from other “long-term” business sectors. Why risk money on unproven incremental change when we can actually prove what works with our program of experimentation?
We prefer to know, with certainty, that we have achieved a small-scale improvement rather than betting on a real transformation.
Ours is a short-term oriented world, whether through relatively short-term private equity holding periods (around five years) or average tenures of key executives (4.8 years for the FTSE 100 ).
Why I’m (surprisingly) optimistic about the future
We are beginning to take a more scientific, field-based approach to assessing the impact of short-termism versus long-termism. Take Binet and Field’s The Long and the Short of It study: in 2013, they empirically showed that in general, investing around 60% in long-term brand marketing yields optimal results.
This empirical evidence finally breaks through. As more on-the-ground research is conducted, we can present business owners with more compelling cases for greater transformational risks.
Meanwhile, challengers are beginning to disrupt the market, potentially forcing a shift in mindset from e-commerce giants, from “if it ain’t broke, don’t fix it” to a real need to change. For example, we are seeing more and more people using video-rich platforms such as TikTok as search engines. We’ll start to see more video-rich interactive content used to help us navigate e-commerce sites as competitors imagine different ways customers could fundamentally interact with content.
James Genchi, head of UX design at Journey Further, tells me we’re starting to see retailers reinventing how we use available data to revolutionize shopping. Not necessarily more data or “AI”, just better customer-centric use cases. Take Thread or Stitch-fix: online marketplaces that actually save users time and effort with curated listings based on individual preferences.
I expect to see a shift from efficiency to experience; e-commerce that offers less choice but more clarity. We will see more captivating product visuals; the ability to query products with greater fidelity; and (at one point) the ability to dive into some form of metaverse to “try on” different clothes from different retailers.
The future looks bright. I sincerely hope that in 10 years I think back to 2022 and laugh at our terribly boring and functional e-commerce sites.
For more information on the future of selling online, head over to our e-commerce deep-dive hub.