E-Commerce and the Internet of Things

by Ian Rosenwach on 8.3.2014

On Friday ReadWriteWeb offered up the below quote from eBay’s VP of innovation –

Steve Yankovich, eBay’s VP of innovation and new ventures, sees the future of mobile commerce as various shopping interfaces that will be woven effortlessly throughout daily life—shoppable screens at the airport, at a bar table, at a mall. He heads up the company’s Zero Effort Commerce initiative, a strategy designed to make that happen…

Perhaps you’re out of laundry detergent—Zero Effort Commerce envisions an app that would learn your historical preferences and order a new box of detergent before you even run out.

Effortless shopping is a great vision, but in reading this piece I realized that eBay (and other e-commerce companies) are missing a key part of the future – the rise of connected devices.

The “internet of things”, or IOT, could be a game changer in e-commerce. Why use algorithms and data to guess what people want and when you can know?

A Series of Devices

Instead of a series of screens, we could see a series of devices that help retailers know exactly when consumers need a product. Most of these devices won’t have a screen, but they will communicate with each other and most importantly back to the retailer who controls the device.

If Apple launches the iWatch or another connected device this year, that could be the tipping point in bringing connected devices to the mainstream. Personally, I’m skeptical that we’re that close (< 1 year) to a point where connected devices will be broadly used. Apple and Google are the main players vying for control the of connected life – each pushing their own products and standards to power a connected home.

But where are the e-commerce companies or more specifically, Amazon?

A Phone…?

Given the fact that Amazon qualifies as a technology company as much as an e-commerce company, you’d expect them to be at the forefront of the how the IOT could improve e-commerce. Instead they launched the Kindle Fire phone.

The rationale was likely that Amazon could become the central hub for media and commerce by building in advantages for their services (shopping, video, music, reading) into the Kindle Fire. But are they forgetting about their core business and chasing the wrong platform? Stratechery recently wrote about Amazon’s rapid diversification –

Here’s my question: why not spend all that money – and time and executive attention – on simply growing e-commerce?

Picking the Right Devices

I predict that the e-commerce company that wins long-term will be the one that figures out how to connect to people’s everyday lives and then automate the ordering process. You can read this post for more on what’s at stake in becoming the “OS of Things.”

There should be more e-commerce companies in this race. Exactly when it will be we can’t say for certain, but there’s no doubt the future of shopping will be shaped by connected devices. Consumer’s won’t even need to know that they need an item. Connected device could know when certain items are running low because it’s always aware and take on the ordering process on behalf of the consumer.

That means convenience for the shopper, but more importantly a deep moat for the company that is able to execute.

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