The Three Sciences of Ecommerce

Ecommerce and Retail are exploding. In 2016, ecommerce and retail has been projected to be well over $ 1.6 trillion dollar industry. Intersection of Ecommerce and Retail and Big Data is the most happening intersection. People who are showing up at this intersection may not perhaps be fully aware but they would be considered pioneers many years from now.

Big data can make special play for many areas of the ecommerce and retail domain but there are three areas that are emerging as separate fields of full blown sciences in this space. They are Customer Science, Logistic Science and Pricing Science.

Customer science is likely to manifest itself in such huge dimensions that it is likely to touch almost every aspect of the business. One way to measure the success of this science would be to relate this science to best customer experience. The science will be all inclusive, in that, it will be super set of intriguing sciences like personalization, targeting, loyalty indices, Omni Channel experience, micro-segmentation, data driven experiences customization. All these sciences will be brought to give every customer a feeling of the store or online website created and tailored specifically for that customer. What can be better than that experience and walk away with a feeling that the specific store was opened and merchandized only for me? Nothing can top this. In essence, all these component sciences are becoming “need to have” as opposed to “nice to have” component sciences for Customer Experience. 

Since the start of the commerce in history, price has played - whether it was barter based as in the medieval times or currency based as in the modern world -  a very significant role in purchasing decisions in buying and selling trade. Therefore, it is natural that pricing science is assuming prominent and almost keystone attention. Pricing science is likely to include but not necessarily limited to price optimization, price modeling, location based pricing, “cheap NOT EQUALS good” strategy. MBA courses devote special focus on pricing. Big data analytics and predictive modeling are likely to give this special impetus.

Logistic science is again an all-encompassing term that includes Predictive Inventory provisioning, real time inventory and supply chain visibility, optimized shipping, supply chain analytics, feedback loop, cost optimization, demand prediction modeling and single view of demand. For those who live and breathe logistics in retail and ecommerce world, it is always clear that this is the space where we can get maximum cost optimization. This “taking out the cost” from operational expenses is the best optimization that a Etailer can do. It is also cheapest amongst all other ways of bringing down Operational expenses.

People can argue about Omni-Channel being the fourth science – however, I refuse to add that to these three majors. I had rather club omni-channel as part of customer science since, in the absence of customer experience, omni channel is just bunch of technologies designed to exist and operate in cohesive manner. It is customer science which provides the real value for omni-channel.

Though the price wars, over-store’ing in US as well as burgeoning foreign (read, Chinese) debt is going to make life brutal for retailers and ecommerce companies, it is also going to be the most happening space in coming years.