6 Things That Have Forever Changed the eCommerce Environment

Ten years ago, long before I co-founded Chargebacks911®, I was getting ready to launch my first eCommerce venture. In the decade that’s passed, I’ve experienced first-hand the various innovations, regulations, and consumer trends that have impacted the industry.

Some of those developments were more consequential than others. The key has been recognizing which new developments have staying power—the initiatives that will impact the way in which we transact for years to come. By identifying major advancements, we can better anticipate and respond to what the future holds.

In the spirit of the new year, I’d like to take a few moments to spotlight what I believe were the biggest and most noteworthy eCommerce and payments industry developments of the last decade or so.

1. Amazon Prime

The online mega-retailer’s membership service was a gutsy move when it was first announced. As of 2011, Amazon lost approximately $11 per Prime subscriber annually.

The reason for the profit loss is the increasing amount of perks each user has access to—free shipping, restaurant deliveries, unlimited streaming of movies and TV shows, free books, and more. Each addition makes the service less profitable.

So, why does Amazon continue offering the service? Better yet, why are more features added at greater cost?

What Amazon found was that, while they lose money on each Prime subscription, the average Prime user will spend about $1,200 annually on the site—140% more than non-Prime subscribers.

Amazon’s subscription service pioneered the loss leader concept for eCommerce.

This strategy has turned Amazon Prime into perhaps one of the greatest builders of brand equity and affinity ever. The service enables the company to build and sell Amazon as a lifestyle. Users can buy Amazon-branded electronics—like the Kindle Tablets and eReaders, Fire TV, and Echo smart speakers—basically at cost. Then, the company generates revenue from the Amazon-exclusive products that are compatible with those devices.

There are several things merchants can learn from Amazon, but the Prime concept offers the most valuable lessons.

Merchants must not only recognize and adhere to consumer preferences, but anticipate coming expectations to get one step ahead. Relentless innovation, determination, and adaptation will pay off in the end.

2. iPhones

Unlike Amazon, who continuously seeks new ways to make customers reimagine eCommerce, Apple’s goal is to make customers rethink the way in which they use the device they’ve come to depend on. They’re taking smartphones to new levels and constantly challenging how consumers understand the technology.

This philosophy seeped into the eCommerce environment when the company decided to use their technology as a payment platform—Apple Pay.

By some standards, consumers have been slow to adopt to the new technology. However, when you consider Apple Pay chose to challenge a decades-old norm—one that hadn’t been rivaled since its inception—you begin to understand the magnitude of what Apple is trying to achieve. It might take a few years to fully appreciate what Apple has done, but we’ll someday soon look back and realize how impactful this development has been.

3. Omni-Channel Retail

The digital and physical retail space were still clearly divided into separate channels at the beginning of 2007. Even merchants who operated in both spaces had very little interaction between their online and brick-and-mortar operations, essentially treating both like separate businesses. While a great deal changed over the last decade, we’re still only beginning to understand and capitalize on the significance of the omni-channel paradigm.

Seamless channel integration and reduced friction in customer interactions helped pave the way for a new standard. The sooner merchants yield to this fact, the greater their long-term stability and market positioning.

4. 3-D Secure

More than anything, this “revolutionary” anti-fraud tool is noteworthy for its absolute failure upon launch. Although the efficiency of 3-D Secure has improved in later versions, the payment industry must take to heart the lessons this technology has taught.

Additional layers of security in the eCommerce environment sounds appealing, but 3-D Secure adds a great deal of friction to the checkout process. Although it’s performed quite well in newer markets where customers have never known anything different and accepted it as standard practice, the technology faced limited adoption among consumers who were familiar with the ease in which eCommerce transactions could be executed.

The legacy of 3-D Secure will be a cautionary tale, detailing why the industry must be responsive to customer demands.

5. Compelling Evidence

I must admit—when the card networks announced that they would begin examining compelling evidence while adjudicating chargebacks, I was very taken aback. Why hadn’t they done this all along?

I was very distressed when it became clear how little emphasis the industry placed on something so seemingly basic and essential as compelling evidence. We’d always painstakingly combed through data to locate evidence that substantiated our disputes, only to find later that most of it was given very little consideration.

It’s good that compelling evidence—information so rudimentary and essential to representment—is now valued by issuers and card networks. My point, though, is that it should have been from the beginning.

6. EMV Liability in the US

EMV was clearly the biggest eCommerce story of the last few years.

While it’s tempting for industry members to focus solely on negative ramifications of the transition, I have to admit the pros of EMV technology outweigh the cons. This is a step in the right direction, even if the path we’ve traversed has been a painful one.

eCommerce Changes Rapidly

The last decade brought incredible changes to the online environment. The realities of eCommerce in 2017 are completely different from those of 2007. It will be interesting to see how we continue to grow and develop in the years to come.


What do you think are the most significant eCommerce developments?

Monica Cardone