Your articles - March 2010

David Kelly (MBA 1996) 
CEO, mydeco.com

As they progress in their Careers, Cass alumni develop knowledge, insights and opinions that are valuable to the wider Cass alumni community. Here, David Kelly, draws on his vast online experience to anticipate trends that you need to be aware of. 

The future of shopping

I have spent the last ten years in the online sector at Amazon, lastminute.com, eBay and now mydeco.com. Incredibly the speed of change taking place right now is faster than I’ve seen before. 

Just think, British online spend is set to double to £39 billion in the next year, fuelled by a 71% increase in the number of UK internet shoppers to 24.9 million. That’s 49% of the UK’s adult population! 

Here are some of the emerging trends I’ve spotted, and which drive my thinking at mydeco....

Pureplay innovation:  Over the last ten years, pureplays like Amazon and eBay have demonstrated an ability to develop phenomenally successful and scalable businesses online.

eBay will post a 2009 revenue in the region of $8 billion and Amazon is generating  operating income of over $2 billion. Both of these giants are constantly innovating as they grow and fight to keep themselves at the top. Amazon has seen great success with its web services and eBay through payments and mobile. Recently, eBay also announced it had 5 million iphone installs, generating $400 million in mobile revenue.

Multi-channel merge:  The ‘Bricks and Clicks’ retailers are getting more and more traction. Last year John Lewis reached around 3m visits during their peak week, and achieved £327m in turnover for the year. They report that their multi-channel customers spend twice as much with them per year than store- only shoppers. Further, they know that over a third (38%) of customers who select ‘deliver to shop for collection’ go on to make additional purchases in-store when they pick up their order. Many retailers are also beginning to experiment with in-store kiosks as customers are increasingly comfortable using this type of technology.

Specialist verticals: In July, Amazon.com purchased hot ecommerce search vertical Zappos for $880 million, demonstrating that start-ups can succeed against traditional players when they specialise. The benefit of a specialism is that they really improve customer experience in a single category, shoes in Zappos’ case (although they also sell handbags, clothing, eyewear, watches and accessories).

Deportalisation: While Zappos specialises in one business and one sector, other companies have emerged by utilising a common online infrastructure to deliver multiple store formats. CSN Stores is a great example, now worth $200+ million with 250 boutique sites selling everything from toys, tools, and toasters to furniture, fitness equipment and flooring.

Private sale clubs:  Outside of categories, new shopping formats are emerging, especially in Germany and France. Vente-Privee began in France in 2001, but has recently become a powerhouse of a new wave in Europe: online private sales clubs involving designer fashion brands, otherwise known in the fashion retail industry as the ‘overstock market’. Its success has lead to a bunch of clone sites, while Vente-Privee itself is on target to €650m in turnover globally this year. Private shopping clubs have exploded over the European continent.

Social Shopping:  Increasingly, web users are led by peer recommendations.  After years of being bombarded with advertisements, people are looking to their social connections to help them make purchases. While word of mouth recommendations have always helped sell products, social shopping sites now allow groups of people to connect with each other based on their personal interests. A great example of this is mydeco.com (of course!).

We have an 80,000 strong community of users, all creating stunning photo realistic room designs with our 3D technology. The room designs are furnished and decorated with 3D models of real furniture, furnishings and accessories, all available to buy from online retailers. Users rate, comment and compliment each other’s rooms, validating the choices and driving sales.

Consumer as producer: Ponoko is an online shop for custom-made goods. Here, consumers can shop the marketplace for designer-crafted goods or commission a designer to custom-make an item. Designers make and sell products using Ponoko’s web commerce and digital make-on-demand services. This ‘Consumer as producer’ concept is increasingly seen across different categories, e.g. shirtsmyway and styleshake.

Virtual shops: A virtual shopping centre based on London's famous Oxford Street and West End consumer hotspots is currently in development, and set to open its (virtual) doors in time for Christmas shopping in 2009. 

Near London aims to create a unique internet world where shoppers can stroll down digital simulations of London streets, click their way into exact replicas of well-known stores, and thumb through goods stacked on virtual shelves. mydeco.com has established a 3D shopping experience for your home and Amazon's new Windowshop marketplace is a new spin on shopping. 

Instead of the traditional 2D way of searching and sorting, this new 3D interface is surprisingly iPhone-like in terms of the way in which users navigate and select items for purchase. Currently you can only see the options the company allows you to see such as Editor's Picks, Best Selling, etc.

Applications: The applications world is exploding at the moment, and creative solutions that truly drive sales are starting to appear too.

A great example is iConcertCal, a free iTunes plug-in that monitors your music library and generates a personalized calendar of upcoming concerts in your city. It includes direct links to for purchasing tickets, and is available for both Windows and Mac OS X. I predict a flood of interesting and useful applications that are as successful at sales generation as their web equivalents.

In summary, ecommerce has only just begun to find it’s feet, and the pace of change is likely to get even faster. The key is to track the changes and don’t get left behind when it comes to the developments which are important to your business.