Rudelle Blogging

Despite the fact that traditional e-commerce assets are becoming a commodity, it does not mean necessarily that all large e-retailers will be excluded from the game. As a matter of fact, it might be quite the opposite. In this new web 2.0 ecosystem, mainstream large e-retailers will have a key role: to become the trusted third party for a given category.
In any case, this is the fascinating bet of Amazon which is reinventing its business with at an impressive pace (still badly understood by the vast majority of financial analysts).
The underlying idea is the following: in two or three clicks, I almost always manage to find a certain Joe who will offer me a book $3 lower than my usual e-bookseller. The only thing which retains me to deal with this Joe (unknown to me), it’s the fear (perfectly justified) that Joe will badly perform (or worse will cheat on me) this very transaction.
Now if Joe is registered on Amazon market place, the picture is very different. Amazon’s brand should guarantee transparency, effectiveness and reliability of the transaction. As a result, I can now buy Joe’s book with very little to worry about. And of course, Amazon prefers to gain a 5% commission on the transaction between me and Joe that nothing at all.
The idea of Amazon is simple: better to integrate all the Joes in Amazon’s ecosystem rather than let them develop out of control in the cyberspace. With this trusted third party role, Amazon hopes to stay in the financial transaction loop. Eventually, it is the only important thing for Amazon.
In this frame, Amazon took two years ago an amazing decision: to offer free of charge of its entire product catalogue (through Web services) to the developers’ community. When one knows that for a retailer, its product catalogue is supposed to be one of its main assets, one measures how radical this decision was.
But the logic is always the same: better to have all the Joes developing their revolutionary merchandising concepts using Amazon catalogue, rather than with others. This open API concept opened to all kinds of mashups is clearly one of the main features of these new Web 2.0 sites. Still, it remains extremely rare for e-commerce sites.
This shows that e-commerce 2.0 is still lagging well behind Web 2.0 in general. For this reason, 2007 is likely to be a crucial year where the most dynamic e-retailers will widen the gap with their followers.