Future of Commerce Blog

The Future of Commerce


One of the most prominent fixtures at Stitch headquarters is a 10′ by 15′ mural that boldly proclaims “The Future of Commerce.” It’s a beautiful work of contrast—big, white lettering swooped over a matte-black wall:


While I loved the look and the people who brought it to life, I didn’t think we’d earned an opinion on what the future of commerce entailed. But in the year since the mural went up, we’ve learned a lot. Our perspective is more nuanced than that of the industry echo chamber. We have a clearer view of where commerce is headed, where the opportunity will be, and what kind of software it will require.

How and why commerce is changing

Traditional (physical) retail was constrained by supply and geography: we’d take our purchasing cues from mass-market advertisements, drive to nearby retailers, and have a very limited consumer experience.

Ecommerce is not constrained by supply; it’s constrained by demand. It’s never been easier to reach a customer, but competition for attention and consumer dollars is fierce. Brands can reach almost anyone, but consumers can shop almost anywhere. This shifts the basis of competitive advantage away from physical distribution and towards customer experience.

The everything store

One way to deliver a great customer experience is by offering the lowest prices around. This doesn’t just mean the lowest price at checkout; it means making everything about the transaction as easy and inexpensive as possible—offering consumers all the benefits of large-scale retail (price, assortment, availability) without any of the hassles (traffic, parking, checkout lines, etc.).

In the US, no one does this better than Amazon. In 2017, they accounted for 44% of US online retail sales. To put it differently, 44 cents of every ecommerce dollar spent in the US was spent on Amazon. Even more astonishing, it’s estimated that Amazon captured half of every new dollar spent online in the US in 2017. They are a market leader outgrowing their own market. This is very, very impressive.

For transactional commerce, Amazon has won the customer relationship. But commerce is more than economic transaction; it’s social transaction, too. It’s a source of identity, ritual, expression, and belonging. For that, the internet rewards a different type of business.

A new wave of digital brands

Frictionless commerce is great for buying laundry detergent and memory cards, but for products bought on an emotional basis, people want friction. They want to feel something.

There’s a whole world of digital brands rising to meet this need. These brands deliver things that Amazon can’t: one-of-a-kind products, depth over breadth, and closer connection. You probably know some of the pioneers in this space: Warby Parker, Bonobos, and Casper, to name a few.

Amazon may be the everything store (three billion SKUs worldwide and counting), but these brands push the boundaries of what “everything” entails, offering new choices and addressing unmet needs (Enchroma, Bevel, Thinx, TomboyX, Dia&Co, etc.). They’re closer to the customer, which means more accountability (Everlane) and more character (Dollar Shave Club). These brands are shaking up retail every bit as much as Amazon is.

The future belongs to brands that own the customer relationship

Amazon and smaller digital brands both understand that the experience is the product. Amazon doesn’t sell books, Tide Pods, or Airpods; they sell affordability, selection, and convenience. Chubbies doesn’t sell shorts; they sell a fun-loving weekend lifestyle. You’re never just selling the product, and the need is rarely what it seems.

Those who understand this better than anyone else will earn the customer relationship. Those who earn (and keep) the customer relationship will win.

How Stitch can help

Amazon doesn’t need anyone’s help, and there are more than enough software companies serving marketplace merchants.

When we look at where commerce is headed, we see the biggest opportunity in helping high-growth digital brands—those selling their own products directly to the consumer and expanding into wholesale, brick-and-mortar, or both. These brands are especially underserved when it comes to inventory management.

Inventory management can mean the difference between high margins and no margin, between repeat customers and missed opportunities. By helping brands get more from their inventory, we help them realize their vision and shake up their respective markets.  With our customers, we’re nudging commerce in the direction that rings true to us: more creativity, more choice, closer connection, and better products.

We’ve got a lot of work to do, but we welcome the challenge and we absolutely believe in the future we’re building towards. If you’re building towards a similar future and want to know whether Stitch can help, please get in touch.

Dan Duett

Dan is a product manager focused on customer development, content strategy, and UX. Outside of Stitch, he enjoys running, reading, and podcasts.

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