The World Economic Forum at Davos is underway. This morning a panel of experts including Jack Ma spoke about the importance of e-commerce in small businesses. His remarks forecasted the e-commerce future–one in which smart contractors will be viable and thriving because of their e-commerce capabilities. To be even more clear: e-commerce is a mandate and the next small business accelerant.
Contractors are often reluctant to accept the idea that e-commerce is feasible. It’s time to let go of doubts or skepticisms. E-commerce is happening. The question a contractor needs to be asking is: “What are the implications if I sit this one out?” or “What will my life look like if a manufacturer sells products directly to the consumer?” As Jack Ma put it, “If we cross our arms e-commerce is going to belong only to the Big Guys.”
Consider the fact that in 2016 Amazon accounted for 53% of on-line retailing. Or that Alibaba generated 750 BILLION dollars in revenue in 2017. While Toys ‘R Us announces additional store closures and Nordstrom is downgraded because of their worst financial performance since 1972, a 29 Filipino woman named Theresa Fernandez-Ruiz builds Rags2Riches as a way to help community artisans sell low-cost products around the world. Theresa Fernandez-Ruiz made the Forbes 30 under 30 list last year.
“Imagine if the barriers to doing business aren’t there.” — Theresa Fernandez-Ruiz
Everyday contractors deal with the clunky process of generating leads, dispatching sales people, service technicians, calling customers, following-up, installing equipment, servicing equipment, repeat, repeat, repeat. E-commerce simplifies many of the traditional customer service and sales processes. And while the applied side of the industry will be resilient to tectonic shifts contractors who want to capture an early advantage should take heed: Business as usual isn’t going to last forever.
“E-commerce is going to replace traditional ways of doing business.” — Jack Ma
There is a generational shift happening as well as a shift in the ways consumers rely on e-commerce to simplify their lives without a middle-man. People in their 20’s and 30’s are buying homes and making home improvements. They are digital natives and will be so forever. Raised on e-commerce platforms, many view the traditional purchase process as a nuisance. Contractors should use e-commerce to increase accessibility and ease-of-use among these buyers. Equally important is the fact that e-commerce is a perfect growth engine for small businesses who can act nimbly, monetize their web platforms, and create an entirely new level of consumer engagement in order to capture a broader audience.
“This (e-commerce) is for young people and small businesses. If young people love it then it’s the future.” — Jack Ma
All of this–e-commerce, the internet of things, direct-to-consumer selling–it’s all daunting. But it’s here and any contractor who wants an advantage in the market should quickly move in this direction. It challenges all of the traditional talking points, from quality control to workmanship, to the necessity of a sales team, to the manufacturing of equipment itself. But have these talking points really worked? Have they really been so earth shattering that they cannot be rewritten or in some cases abandoned? Most likely the contracting industry is going to learn how to layer these stories within their e-commerce platforms. People want quality products, a low-hassle experience, and a price-to-value ratio that makes sense. Ma’s closing remarks at Davos provide a snapshot of this new world:
“In the future there won’t be ‘Made in the USA’ or ‘Made in China.’ There will only be ‘Made on the internet.’