In the final flurry of Christmas shopping last year, a buyer in Miami snapped up a new, 18-carat rose-gold men’s Rolex watch for $29,000 on the eBay iPhone app. The watch, which sold at 9.30pm on Christmas Eve and came with free one-day shipping, may have made a welcome last-minute gift for someone.
It was just one of the over 100 million items we sold via mobile on our platform between Thanksgiving and Christmas. The transformative effect of smartphones and tablets, not just on our business but also on the entire retail sector, has been staggering. Nobody understood the degree to which these devices would explode distribution and access points, and fundamentally change commerce.
The mobile phenomenon demonstrates how interwoven technology and commerce have become. But what we’ve seen is only the beginning. I believe we are standing on the brink of another secular shift in technology, a new age of connected commerce.
Why go to a destination to buy something, if it can come to you?
I anticipate over the next five years, we’ll see the impact of five trends that will further re-order the commerce landscape. These trends are: the age of everywhere, truly global trade, virtual reality as a retail tool, on-demand inventory and supply, and sustainable shopping.
The age of everywhere
This new, post-mobile age – sometimes referred to as the internet of things, but I prefer the “age of everywhere” – describes a world in which trillions of screens and sensors are connected to one another, and form an ecosystem of data that lives in the cloud.
The future of commerce in this new age is all about harnessing the power of data to add context. Contextual shopping is a smarter, more individualized shopping experience, tailored by data around everything from buyer preferences to the location of inventory. Why go to a destination (digital or physical) to buy something, if it can come to you? Why warehouse inventory if it is already close to consumers? Why design for a 3½ inch screen when there will be hundreds of form factors?
This era heralds a deeply customized shopping experience for consumers and new world order for logistics.
On-demand inventory and supply
The manufacturing model of today is the one that has existed for many years: manufacturers make one million of a particular product and then try to sell them.
But as these centres become technologically aware, data-driven and capable of quick turnaround, the need to create inventory stores for products, and then find customers for them, is being eliminated.
So imagine a world where you want a red cashmere sweater that is a certain fit, style and length. This is then immediately turned around in a manufacturing location somewhere in the world and at your doorstep in five days. That reality is closer than many believe.
The supply chain as we know it will be turned on its head
This puts demand first and provision second, the implications of which are dramatic. If everything a consumer wants can be defined, sourced, generated and delivered in a few clicks, the supply chain as we know it will be turned on its head.
True global commerce
In the future, “global commerce” will lose meaning as all commerce becomes truly global. In many respects, that era is already upon us. But the headline statistics mask the reality, which is that huge barriers remain.
Customs, duties and tariffs, language and currency, and complex regulatory frameworks create a challenging cross-border trade environment.
We at eBay are working to make it easier – and I believe it will get much easier. When it does, I believe it will also open up access to markets, drive job creation and eliminate the geographical arbitrage implicit in commerce today.
Virtual reality gets real
Virtual reality is another game-changer in the consumer space. This immersive technology entered the mass market via gaming platforms and is rapidly migrating into other industries.
Its integration into commerce has the potential to create disruptive change. This is especially true in emotionally driven categories, where the impact of online shopping has been inhibited by user interface limitations. These include categories such as art, fashion and even automobiles, where the ability to immerse yourself in the fit, feel and texture of an item matter greatly.
Virtual and augmented reality will have a really strong role in bridging the trust gap, giving consumers a much better sense of what they are buying by providing an immersive virtual experience.
Sustainable shopping gathers momentum
The way in which an emerging generation of consumers shops and thinks about consumption is changing. The decision to buy used rather than new is no longer purely a value-based calculation. Increasingly, consumers are seeing the value of secondary markets as a driver of sustainability.
eBay was one of the early pioneers of on-demand
eBay was one of the early pioneers of on-demand, offering consumers access to items they may only need for a short time, and the chance to resell them later — such as baby goods or electronics.
Now millennials are the ones pushing the on-demand economy, in which sustainability ranks highly and access takes precedence over ownership. This has fuelled the growth of a new generation of services such as Airbnb and Lyft.
It is estimated that sustainable shopping has the potential to divert up to 340 million tons of waste globally from landfill each year.
A $14 trillion opportunity
Over the past few years, the speed of globalization has been astounding. The rate of adoption of the on-demand economy has been breathtaking. Technology, and mobile technology in particular, has driven a secular shift in the way we shop and live, causing the online and offline worlds to meld and fuse.
I believe the five trends I have outlined are capable of delivering another secular shift in commerce. It’s coming, and for companies ready to embrace it, there’s a $14 trillion opportunity at stake.
Devin Wenig is participating in the World Economic Forum’s Annual Meeting in Davos. This post was first published on the WEF’s Agenda platform.