E-commerce – is the next wave about to break?

How can e-commerce continue to grow? This guest post by Jamie Murray Wells, founder and Executive Chairman of Glasses Direct, looks at the next wave coming round the corner.

Latest figures show UK ecommerce sales continue to buck the financial doom-and-gloom. There was an overall 14% increase in the year to April 2009. E-commerce certainly looks like the Noah’s Ark of retail during the recession: those companies that have a strong online consumer proposition get a ticket to ride out the storm, and those that don’t, may drown.

There is a lot of he growth in the clothing, footwear and accessories category in particular. According to Forrester, in those categories online sales represented 2-4% in 2003, and now represent over 10% and in some cases, over 15% of the total category.

Where the sale of more ‘generic’ products such as books, DVDs and travel can be seen as something of a first wave of ecommerce, understanding how consumers want to buy high-touch, cosmetic products online such as expensive jewellery, fitted garments and for us, eyewear, could represent something of a second wave of e-commerce.

For companies involved in this second wave of ecommerce, it is not as simple as relying on the old cornerstones of price, range, convenience to attract customers. Our peer group face significant consumer purchase barriers to do with try-on, fit, and product education, that one-by-one, need to be identified and addressed, through continued technological innovation and great customer service, in order to pursued customers to make purchase decisions in our favour over the high street.

A number of interesting businesses ride this new wave of e-commerce innovation shotgun with us:

Blue Nile, is an online jeweller that offers a completely new level of service online, changing diamond shoppers’ habits. They offer enormous amounts of information on the diamonds that they sell, specialist experts on-call, and a massive focus on education to teach you about what you should think about when buying a diamond – far more than you could get in a high street store. The technology on their site allows you to see what different carat diamonds would look like on your finger. This matched with the traditional advantages of shopping online – a massive selection, reasonable pricing and convenience, has meant their business has been a runaway success.

Everyone knows ASOS, which has developed some really strong online celebrity and brand engagement. Suggestions for product ranges and tips from other consumers’ purchases, beautifully shot imagery and the ability to zoom in to inspect every detail complete the picture for the ASOS shopper of high-touch products.

At Glasses Direct [interest declared] we help our customers find their ideal glasses with our Virtual Mirror, which allows people to virtually try on glasses while they’re browsing. We want people to use the resulting images to get other people’s opinions on their looks. ‘Do I look good in this’ becomes a question you can ask your community, not just one shopping companion or the store assistant. Retailers like us are looking at ground-breaking ways to visualise products online, especially when the products face higher than average barriers to sale.

And then there’s Zappos, who use customer service to create a ‘personal emotional connection’ with their customers – something that helps it overcome barriers to buying shoes online, drives loyalty and therefore repeat purchase, and helps them sell over a $1b of shoes every year online.

The second wave of ecommerce isn’t about necessarily unique or high technologies, but how we, as retailers of the fitted or fashion product, can fashion practical online solutions to each of our own consumer bases’ needs. I believe that in years to come it is likely that every retailer will be able to offer price, range and convenience like Amazon, and so the real competition will be around the customer experience and the customer service. We’re just ahead of the curve by prioritising these now. This is why, as I said in a blog post after a visit to the company, Zappos, who calls itself ‘a service company that happens to sell shoes’, it will probably in time, replace Amazon as the e-commerce ‘gold standard’.

Now that the first group of second wave companies has proved that the public, investors and the city all buy in to the prospects of companies dealing thin the high-touch, entrepreneurs should be scrutinising the high street for possibilities. Most of the obvious e-commerce first wave opportunities may well have been seized, but there are many second wave opportunities still out there. Look around and anything that says ‘tailor made’ on, is not sacred to the high street anymore.