I just read an awesome blog post written by Albert Wenger from Union Square Ventures.
Albert has financed some of the largest consumer internet franchises on the web including Twitter, Zynga, Foursquare, Kickstarter and Tumblr. He knows what’s what!
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A while back I wrote a blog called “The future of eCommerce” which outlined my vision as to where I see online commerce going. His recent post has an uncanny resemblance to what I described back then.
I explained that the future of eCommerce is going to be driven by the following three factors:
- Frictionless payments
- Social platforms
Albert’s blog is titled “Attention Scarcity, Transactions and Native (Mobile) Monetization”.
- Attention scarcity requires frictionless payments.
- Native mobile use requires mobile transactions (Twitter, SMS and email – the lowest common denominator of technologies on smartphones).
- His use case is an example of buying via Twitter.
What Albert is saying is that we need to capture consumers when their purchase intent is at its highest while they are engaged with their medium of choice, whilst making it easy for them to pay.
Marketing 101 is all about endorsing a celebrity with a brand (think Nike and Roger Federer), putting the celebrity on TV, broadcasting them to a large and engaged audience, and creating an emotional connection with the viewer.
This is how brands are built. Almost all established brands have been built this way. It is what they teach you in marketing kindergarten.
As a cyclist I watch the Tour de France every year. I see these guys pumping up Alpe d’Huez with sweat beading from their foreheads.
They are my hero for that moment and I watch in awe taking into consideration how gruelling the ride must be. If you are a soccer fan, you sit there glued to the TV watching your heroes play the game.
Every pass of the ball strikes an emotional chord. Fans want to be the players. Fans want to wear what they are wearing.
This is why people pay $149 for a pair of Nike shoes that cost $15 to manufacture. This is why we shop at Nike Town not Joe’s Shoe Store.
The problem though, is that until now it has been impossible to turn purchase intent into a transaction at the moment where purchase intent is at its highest.
In order to make a transaction, consumers have to move away from the medium they are engaged with, whether it be Twitter, TV, newspapers or magazines, and go to a store or web browser to buy.
There is too much friction in this process.
Albert describes this here:
“Because at the moment most routing is still of the disrupting and annoying kind that tries to take your attention and move it somewhere else altogether, such as a different website altogether.”
“The primary reason behind the need to disrupt and really move you elsewhere is that most web services have not yet found or deployed their native way of making money, which is largely due to the inability to transact within the services themselves.”
According to Albert’s example, he is saying that the consumer needs to be taken away from the Twitter stream and moved elsewhere on the web to a place with a low conversion funnel before they can buy.
In reality, it is much worse than this.