Battle for the Fourth Most Important Channel Is On

You can forgive most brands if they are skeptical about social eCommerce, but they have heard the hype and been burned before. Mostly by Meta, and then continued analyst reports that Livestream and Social Commerce will take over US eCommerce.

Many North American mid-market and Enterprise brands have the following brand priorities in terms of revenue (in no particular order - due to differences in companies/position)

Retail, Amazon, and Direct-to-Consumer

You do see a different mix of channels among a lot of brands. For some brands, they are revising the Amazon bucket into "Amazon + Walmart Marketplace online," indicating the growing importance of Walmart.

Enterprise brands usually have the highest proportion of Retail. The two and three spots can sometimes flip between DTC and Amazon, depending on how "brand-forward" the firm is (there are a lot of categories [think: home improvement where many supplies are essentially white goods]). More brand-forward? DTC important. Less so? Amazon more important.

Up-and-coming brands usually have a higher proportion of DTC, but as they progress from emerging into the mid-market they are adding retail distribution in Walmart, Target, and then category-specific retailers at a more rapid clip than DTC

There is still a large segment of "marketplace-first" brands that grew up on Amazon that are always looking to grow their DTC businesses (you rarely see these brands end up in retail - folks like Anker being the rare exception).

The big question, then is, where are the next opportunities? The candidates are as follows:

* Tiktok: Livestreaming and Social Commerce: Will the hype finally realize?

(there are a few other livestream candidates out there as well, but none with as much potential as Tiktok for obvious reasons)

A while ago, we thought traditional US and European brands would dominate Social Commerce. The rise of Shein makes everyone wonder if Chinese influencers could run the show in North America instead. The recruiting has begun on the TikTok side.

* Shein: Any discussion of the next most important channel needs to discuss the growth of Shein. Regardless of what you think about the business model, labor practices, they are a force to be reckoned with and have captured a lot of younger consumer attention and sentiment. The launch of Shein's third-party marketplace must be mentioned.

Temu gets a mention, but more like Wish 2.0 then Amazon 2.0.

* Shop App: The channel doesn't deserve mention here. Yet. While the inventory is interesting, the shopping experience doesn't match Tiktok in consumer interest, Amazon in efficiency, or Shein/Temu in scale/reach.

That said, the biggest question to Shopify is how it will attract consumer imagination without competing with its own brand's marketing efforts.

Currently, seems destined to become Etsy 2.0.

* Metaverse: Sorry, try again in 10 years.