amzn01 How Tablets Will Drive e-Commerce

How Tablets Will Drive e-Commerce

E-tailers can strategically drive sales at their stores through the tablet and change the buying habits of consumers.

• By Tim Bajarin
• September 19, 2011
• 3 Comments

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I recently noticed something about my tablet usage that really intrigued me. My Apple iPad has become my constant companion and, along with my iPhone and Droid, it goes where I go.

Although my smartphones are important to me, I have always had a difficult time reading their small displays. As I get older, I have to admit that the size of the screens I use in my life becomes an important part of my user profile. While I often buy and use apps on my smartphones, I very seldom use them for any real e-commerce purchases. For that, I mostly defer to my laptop.

But over the last six months, I my preferred device for buying things has shifted to the iPad—a fact that recently came into sharper focus when I read an article in Wired . The article points out that Amazon's tablet might actually serve as a powerful vehicle for its large store.

The article recounted a 1997 Wired interview with Steve Jobs in which he discussed the opportunities he saw with the Web. Here is what he said:

Wired: What other opportunities are out there?

Steve Jobs: Who do you think will be the main beneficiary of the web? Who wins the most?

Wired: People who have something–

Steve Jobs: To sell!

Wired: To share.

Steve Jobs: To sell!

Wired: You mean publishing?

Steve Jobs: It's more than publishing. It's commerce. People are going to stop going to a lot of stores. And they're going to buy stuff over the Web!

As you can see, even back then, Jobs forecasted a major shift in user buying habits. He knew the Web would become a serious vehicle for e-commerce. Over the last 13 years, that has happened in a big way. eBay, Craigslist, Amazon, iTunes, and many more e-tail sites have all driven e-commerce into the mainstream. They are now just a normal part of the way most of us buy things, especially things that we cannot find at our local mall.

Of course, the irony of interview clip is that, while iTunes has driven Jobs' e-commerce vision, the retail stores have become one of the most successful chains in the world.

Look closely at people's shopping habits these days. Most find products through search engines and review sites like PCMag.com and then buy them online. Consequently, the Web has literally become the most powerful medium for commerce, next to the grocery store. Sure, people will always go to the mall, but the mall will always have a limited supply of goods. Through the Web, you can buy just about anything.

Of course, people will still use desktops and laptops for e-commerce. But if my experience with the iPad is any guide, the tablet—which has the mobile access to e-commerce of a smartphone but a larger screen—could actually drive even more Web purchases in the future.

Essentially, the tablet is Amazon's brick and mortar. A tablet is to Amazon what a physical superstore is to Wal-Mart.

Amazon's business began by selling books online but quickly became a place where consumers could shop competitively for just about anything from one single location. It just so happens that this location is not physical; Amazon's location is virtual as it resides within your browser.

By contrast, a company like Wal-Mart strategically involves its brick and mortar stores as it enters the digital age. To some degree, Barnes & Noble is doing something similar, only in the book realm. Amazon, however, has no intentions of creating a physical location where you walk in to experience its service. I believe that Amazon is very interested in giving you a virtual physical storefront and it started with the Kindle.

Any retailer will tell you how important the overall retail experience is to its success. Some companies do retail poorly and others do retail extremely well. Amazon's Kindle focused completely on discovering, purchasing and reading books. The Kindle is the retail storefront to Amazon's digital book library.

I believe that the evolution of the Kindle will follow Amazon's business evolution. It started with books then expanded to include everything else, which is why the new fully-featured tablet will also come with Amazon's complete shopping experience built in. This includes not just digital storefronts like books, music, and movies, but physical items as well. Since Amazon is one of the largest digital storefronts, it benefits greatly from getting devices on the market that allow it to control the entire shopping experience.

This is one reason Amazon re-jiggered its iOS app strategy to dodge Apple's transaction model and fees. Additionally, Amazon wanted to control the user experience with its own storefront, instead of Apple's.

It's clear that Apple's app store commerce model works for those hindered by billing and storefronts but it doesn't work for companies that have spent millions perfecting their own e-commerce experiences. If the entire e-commerce experience is baked into the tablet experience, then Apple's next big purchase might be an e-commerce e-tailer that offers a broad range of products to complete iPad user experience.

Amazon also has an interesting strategy with its Prime service that could be strategically integrated within its tablet. Perhaps Amazon gives better deals or promotions to Prime customers who own the tablet, thus driving more sales from its store directly on the tablet.

Thus, a tablet is actually strategic for Amazon. Of course, it can and will make sure its services are available on every device imaginable. However, if it brings a full-blown tablet to market that also includes a seamless way to research, discover and purchase, then that device becomes the retail storefront to everything Amazon sells—and more.