Who Will Become the “Facebook of E-Commerce”?

uploadsfacebook-logoBenedict Evans (analyst at VC a16z):

Facebook recommends stories it thinks (based on its machine learning model) you might like. There’s not really an equivalent for products. (…)

Amazon in particular and ecommerce in general is good at search. Amazon, very obviously, is Google for products. It’s good at giving you the best-seller you’ve heard of or the water filter for your fridge (the long tail). It’s not so good at the things in the middle. Amazon is great at selling you what’s on the table in the front of the bookshop, and at selling one copy a year of a million or so obscure titles, but it’s not very good at showing you what’s on the shelves at the back of the bookshop. It’s not so good at selling the mid-list – things that you didn’t know existed, or didn’t know you wanted, before you saw them.

​This is something we are talking about for a long time now at our firm. E-commerce is still largely (one could argue, almost solely) modeled after mail-order catalogues. The missing restriction of scarce space brought a search button along. But that was about it. Online retailers going different paths are rare. (They do exist though: Look at Zalando’s mobile apps like Fleek, at Westwing.de, Outfittery or Vente-Privée)

So, who is going to be successful in e-commerce with a different paradigm? In this specific case: Who is going to be the Facebook to Amazon’s Google?

Evans:

As machine learning ripples out across the tech industry, entrepreneurs will probably also find entirely new and better ways to answer ‘what would I like’. That might include Google, indeed. (…)

Either way, an impulse purchase in one of 2 or 3 retailers you might have stopped in at, based on real-estate portfolio on one hand and eye-level placement and brand equity on the other, shifts to auto-renewal or a natural language parser. Given that P&G and Unilever’s combined ad budget is larger than the global revenue of the recorded music industry, this means that subscription soap powder could be a much bigger deal than subscription music. (…)

What will you have to pay to be Google Assistant’s default choice of dishwasher tablets?

At this point in time, I very much doubt the answer is either Google or Facebook. The former may have the technology but seems incapable of incorporating it in a meaningful personalized fashion beyond search and personal asistant type things. Facebook on the other hand does see this as an opportunity. But again, this is more looked at by the company as an attractive potential revenue stream than anything else. Facebook doesn’t seem to have it in them either. (Just look at the mess that is Facebook’s Shopping Feed.)

It may well be that the actual answer to our title’s question will be deploying Google’s technology (or something similar from another vendor) and Facebook’s social network to create something on top.

Or it will be something completely else and more separated.

Whatever may come, the market is here for the taking.

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2 comments

  1. Hello just wanted to give you a brief heads up and let you know
    a few of the images aren’t loading correctly. I’m not
    sure why but I think its a linking issue. I’ve tried it in two different browsers and both show the
    same outcome.

    Like

    1. Thank you. Can you point me to posts / images where this is happening and can you tell me which browsers you were using? I don’t see any problems here.

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