Photo from Unsplash
Originally Posted On: https://www.entrepreneur.com/en-au/news-and-trends/how-the-future-of-buying-things-may-already-be-here/452052
Throughout history, retail has consistently evolved alongside advances in technology, adapting to new methods of production, distribution, and communication. Beginning with the Industrial Revolution, mass manufacturing emerged and transformed the retail landscape, a shift that continues today with e-commerce breaking down geographical barriers and broadening consumer choice.
From the Industrial Revolution’s innovations, such as the steam engine and power loom, to the rise of department stores, mail-order catalogs, supermarkets, and shopping malls, retail has expanded to offer customers an increasingly diverse range of products and experiences. The internet and digital technologies have ushered in a new era of retail, with e-commerce platforms like Amazon, Walmart, Etsy, Shopify, and the recent addition of Temu, revolutionizing the way people shop.
Since its inception in 1994, Amazon has disrupted the retail industry with innovations in e-commerce, customer experience, and logistics, forcing traditional retailers to adapt or risk obsolescence. Key developments, such as Amazon Prime, AI-driven personalization, and the marketplace model, have spurred competition and set new industry standards. Furthermore, Amazon’s investments in logistics, technological advancements, private labels, and cloud services have profoundly impacted the retail landscape, driving transformation and pushing retailers to embrace new technologies and business models to stay competitive.
Walmart, the world’s largest brick-and-mortar retailer, entered the e-commerce space in 2000 with its website and pioneered its unique omnichannel strategy, expanding product offerings and focusing on online grocery services and international expansion. By integrating physical stores with online services, Walmart has created a seamless shopping experience for customers, further bolstered by investments in technology and innovations.
Etsy has carved out its own niche in the e-commerce landscape by creating a marketplace for handmade, vintage, and craft items, empowering small businesses and artisans. Launched in 2005, Etsy has enabled these creators to reach a global audience and foster entrepreneurship. The platform’s emphasis on customization, sustainable practices, and community-building has resonated with its customers, who go there to find unique items unavailable elsewhere. Etsy’s success has influenced other e-commerce platforms to adopt similar approaches, prioritizing customer engagement and offering specialized products.
Shopify has democratized e-commerce by offering an accessible and customizable solution for businesses to create their own online stores without relying on marketplaces like Amazon or eBay. Founded in 2006, Shopify has transformed e-commerce by enabling businesses of all sizes to thrive in the digital marketplace. The platform’s emphasis on multi-channel selling, mobile optimization, and extensive support resources has contributed to its success, attracting entrepreneurs and small businesses seeking greater control over their operations.
We may be witnessing the next phase of e-commerce with the emergence of Boston-based online platform Temu, which made its debut in the US last September. In a May 4 article titled “Is Temu the Future of Buying Things?”, New York magazine noted that “Temu seemed to come out of nowhere, and now it’s everywhere” with customers ordering $5.79 yoga pants, $27.98 doorbell cameras, and $10.29 garment steamers from the Boston-based online platform.
Whereas Amazon, Walmart, Etsy and Shopify are all essentially enablers for the distribution of goods that have already been manufactured. Temu is seeking to make the leap to enable manufacturing that is initiated by consumers according to their needs. Whereas before tailored-made production invariably meant tiny quantities, long lead times, and high costs, Temu is making use of advances in digital technology to enable bespoke manufacturing at scale, so that consumers can get products that are made to their specifications but at lower costs due to economies of scale and less waste.
This approach, which Temu calls “Next-Gen Manufacturing,” allows consumers to direct the production of goods rather than be passive recipients to be marketed to. Temu’s model reduces costs by at least 50% compared with traditional manufacturing processes, in effect offering wholesale-like prices for retail buyers without the need for bulk purchases.
By helping manufacturers gain a deeper understanding of consumer preferences and reducing the number of intermediaries, Temu is streamlining the supply chain by improving the matching of supply to demand, ensuring the right products are made in the right amounts at the right time. This efficiency reduces the costs associated with unsold stock and wasted resources.
In addition, with improved visibility of demand and supply, suppliers can arrange for the purchase of raw materials and transportation and storage of finished goods in a much more efficient manner, further cutting costs. More savings are reaped from the reduced need to spend heavily on marketing to persuade consumers to buy, as the products are already tailored to their needs.
“So they’re kind of cutting out the fluff in the middle and not having to spend more on marketing dollars to tell consumers what they want to buy. They are basing their sales off what people want,” said Andrea Woroch, a retail expert. “It’s definitely a legitimate app and a legitimate site place to buy stuff.”
To be sure, new-generation e-commerce players like Temu that feature rock-bottom prices due to improvements in product fit and reduced waste would have to overcome skepticism from consumers who are used to paying “normal price” that includes inefficiencies and layers of markups. But as the practice of “Next-Gen Manufacturing” becomes more commonplace, consumers may soon realize that they can enjoy quality merchandise at affordable prices.
As the retail landscape continues to evolve, consumers are enjoying an unprecedented level of choice and customization. From the early days of limited selection at local stores to the current era of infinite selection at their fingertips, shoppers are now able to influence directly what products are made, ensuring a better market fit and lower prices.
The emergence of platforms like Temu, which focus on more accurate, consumer-directed reverse manufacturing, signals the next big thing in e-commerce and retail. As technology, manufacturing, and logistics continue to advance, the future of retail will likely see even more innovative approaches that cater to the ever-evolving needs and preferences of consumers. In this rapidly changing landscape, retailers must remain agile and embrace new technologies and strategies to stay competitive and meet the demands of an increasingly discerning customer base.
