Thought Leaders in E-Commerce: Blue Acorn CEO Kevin Eichelberger (Part 5)

Kevin Eichelberger: If I were looking to create a company or a startup that is going to solve the problems of tomorrow and not just the problems of today, I would look at the way consumers shop and the prediction around how they’re going to shop as the foundation for that. I think that introduces a lot of areas and opportunities and new innovative ideas for entrepreneurship because the way our systems, processes, and teams are designed organizationally are quite antiquated when you think about how people shop in the future.

I’ll break it down this way. Today, people engage in, what I refer to as, destination shopping. They go somewhere with the purpose of buying something. They go to a website. They call a phone number. They drive to a store. They do those things with the intention of buying something. They typically buy multiple things in one setting. They will concentrate their shopping activities when they do these destination events.

If you think about how the Internet of Things is changing everything, all of these are very early steps towards the future of retail, which is a movement away from destination shopping and a movement towards embedded shopping where shopping is a behavior all around you, every day and everywhere you go. It’s as simple as a scan of your thumbprint or retina, or some other activity where it’s micro-purchases where you’re buying things throughout the day rather than in concentrated events.

When you think about that shift, it totally transforms how retail is done today. The system and technologies needed to support that have to change. I think the biggest opportunity for entrepreneurs is around that fundamental shift. Mobile shopping is something that’s a near-term problem and solution.

The shift in retail from destination to embedded opens up a lot of windows of opportunities because most of the technologies and systems are designed for destination retail. They’re not designed for embedded retail. The strength of a startup is you’re smaller and nimbler. That’s what’s going to be required to solve the problems of an embedded retail world versus the established companies trying to pivot in that direction.

Sramana Mitra: On that topic, do you see the established brands winning in this game or do you see new brands with different user experience, vision, and perhaps different levels of technology capabilities winning this game?

Kevin Eichelberger: I think you’re already seeing new brands winning in this game. If you look at the market capitalization and share prices of the largest retailers 10 years ago and where they are today, they were the ones that people went to. Now you have the Banobos and Dollar Shave Club. These are companies that are shaking up retail dramatically.

It’s almost an “Out with the old garden and in with the new” situation. You also have that at the underlying technology level that supports those things, most of these companies don’t use the antiquated software that the Macy’s of the world use. They invest in technology as an asset and a leverage versus enabling or using the same old software.

Sramana Mitra: We’ve also seen some mishaps, right? For example, one company that I’m really sorry to see disappear is Nasty Gal. They were doing a really nice homegrown brand. It was a young entrepreneur who was doing a nice job for a while and then they raised too much venture capital and tried to grow too fast. It grew fast for a while, but it blew up.

Unfortunately, retail is not just technology. It has got a lot of operational and merchandising complexity that the retailers know how to handle. Retail is not technology. I don’t want to overplay that technology is going to be the winning formula across the board because retail is a lot more than technology. Merchandising is a very big piece of that, and operations is a very big piece of that.

Kevin Eichelberger: I agree 100%. If you run content on a blog about entrepreneurship, one of the things that should shine through in every conversation is a failure because people are trying innovative things. They’re taking big risks and making big bets. With big risks come big successes and failures.

Sramana Mitra: Our blog is a lot more sophisticated than those kinds of clichés. We have published extensively on why Nasty Gal failed. These are not simplistic ideas of taking bigger risks and so forth. Thank you for your time.

This segment is part 5 in the series : Thought Leaders in E-Commerce: Blue Acorn CEO Kevin Eichelberger
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