OSCommerce was the OG eCommerce platform before Shopify or Magento. It took about a month to set it up. I have personally onboarded over 100 'eCommerce companies' on OSCommerce, Magento, Miva Merchant, etc. back in the early 2000s.
There was a time when it took a visit to a bank and submission of a few documents to get payment processing for your website. Then there was a time when it took 3 to 4 days to set up a payment gateway. Before Elliott, which claims under 2 hours of set up time, there was a point in time when it took a month to set up your eCommerce account. Shipping meant walking up to USPS or UPS store. Getting a loan for working capital meant a visit to the bank.
Let's move on before you calculate my age.
Moats get replaced by buttons
Capital, Logistics, Cross-border were all dreadful things I never imagined would become features one day. They have. Even the audience is a feature. A few clicks and a lot of money to burn, you can reach whomever you want to reach.
When something becomes a feature offered by a platform, it is no longer a moat. Anyone can get Amazon-level fulfillment today. Anyone (ok, many) can get working capital loans today (and so you don't need VC dollars). Anyone can select the same audience cluster through Facebook or any ad network. You can even buy elections. Even a small brand can go to Story at Macy's.
The disappearance of the moat is the other side of platformization.
Community as a moat
What becomes a moat changes every few years. In the world of D2C, the moat is organic customer acquisition (and supply chain).
The difficulty in building a good brand comes from getting the product right, getting customers through cheaper and sustainable means and keeping them hooked on to your brand. Good products come from nuanced consumer insights and diligent sourcing. There are many more nuances that go all the way to the post-purchase experience that make brand-building an 'art'.
'Art' is a catch-all term to describe the complex interplay of ingenuity, empathy, systems-thinking, processes, and exceptions.
But there are parts to this art that are actually features that can be plugged in and out. Community-building is one such art that actually could be a feature. Until that happens we will see journalists eulogizing how a brand's secret sauce is its community (until they file their S1s).
Whenever someone drops this as well-meaning advice, I can hear the sound of the founders' souls getting crushed. Among the hardest things to do is bringing people together and keeping them together. As someone who has been running an offline community of founders for the last 7 years, I know what it takes.
We have met almost all the months face to face during these years but for a handful of instances. We made it through rains and jet lags. Entrepreneurs are one of the most committed profiles. Their passion and travails make them actively seek communities. Even then, it is super-hard to keep the flock together.
Brands should build communities. Duh!
Yes, but that's the same as saying businesses should be profitable. We know. It's just a super-hard journey to get there.
In a world where everything is a service or a feature that could be turned on, I wonder how 'community' isn't yet a feature. If you are building a 'community as a service' company, I will put my money on it (when I have it). D2C brands are already seeking communities that are already in existence.
Backcountry, Arc'teryx, and Weston recently partnered with Nature Conservancy.
This is probably why:
There are a million supporters who can be reached through a text message. I know, I know. I am such a low life. But 9 out of 10 brands cannot build a membership community that is a million-strong even if you put a canister of Coronavirus on their foreheads.
Communities are formed around causes. D2C brands espouse certain values. The match makes sense on several levels.
The missing community stack
It is super hard to discover the communities and reach the audience. But if you are able to crack it, the rewards are high. Communities represent a high signal to noise ratio. They engage way better than mainstream social networks and are often cheaper to activate.
What's missing is the tooling that makes it possible to discover and engage with communities and their members at scale. In our analysis, in a category like 'Outdoor' which lends well to community building, less than 10% of the retailers and brands (on a sample of 6500) mention 'community' on their websites. Less than 1% have an 'explicit' call to the shoppers to 'join their community'.
Compare this to 'Outdoor and Adventure' events in Meetup.com in top coastal cities in the US. There are more than 1000 groups with memberships crossing half a million. That's just one platform but an extremely un-usable platform for brands. There is no workflow to take the parts out of the art of community building with Meetup.com that could easily be buttons and drop-downs.
'Building a community as a way of acquiring customers and retaining them sustainably' is dismissed as truism because the stack or the company that needs to level the playing field for brands is missing. Instead, survivor bias takes over and we point to glorious examples of Peleton and Outdoor Voices and use them to convey how hard it is to build a community.
eCommerce tech, fulfillment, payments, loans were all hard until they became features. Shopify, ShipBob, Stripe, and Clearbanc turned gruesome experiences into buttons that can be pushed. 'Community' or parts of leveraging communities will be a button that can be pushed. It just needs a company!
PS: Accepting finders fee from VCs for this tip. Fees could be paid in units of Patagonia vests or Allbirds shoes.
PipeCandy is a market intelligence platform that tracks the global eCommerce & 'direct to consumer' landscape.
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