Before I begin. It's worth saying that there is no LLM here, in fact I slightly rejoice in never going very much back over anything I write… so expect accidents and evidence of no proofreading 🙏.
The future of Commerce sept 2027
This is a love letter to digital, a world in which I have worked for nearly 20 years.
Whilst the digital world has evolved significantly over 20 years, most of the focus has been on creating websites that were able to transact safely, securely and on brand - and then subsequently finding audiences beyond the initial enthused early adopters of the internet.
In 2026 this channel is under stress as never before, and something needs to give in my humble…
As I see it, growth online is becoming almost unaffordable using the methods most deploy. New customer acquisition online is becoming almost completely unprofitable, as paid costs are driven up, inboxes are fragmented and “organic” across the board somehow unpopular and out of fashion. Of course, our Californian overlords are currently creating a new jigsaw for digital with ever smaller pieces, some with nothing on them, and some that are just missing - on purpose.
It’s worth noting my credentials here. As well as moderating a group of 300 brand-side customers, I speak to a good number of leaders across operations, owners, digital and tech in designing conference Agendas - without an agenda of my own I might add. These people know that this is happening. They stopped believing as an organisation that digital was the “engine of growth” for their business a while ago, and whilst it’s not said in public yet… they’re looking elsewhere.
Somehow, online has become wrapped up in its own ecosystem so that (for example) paid media managers measure themselves based on the size of their budget, the new shiny tech toy is more appealing than extracting value from the current stack, and (of course) that data cleansing project is still on the back burner because…. It’s hard and unsexy.
Coincidentally, stores have been stuck in the equivalent of this same rut for decades - change was resisted, hierarchies persisted and a slow decline was envisioned.
In my view we find ourselves at a crossroads of sorts, where it seems as if online is genuinely under threat, store retail is recovering, and big tech appears determined to decimate digital by rendering it impossibly unprofitable.
There are outliers of course - I could point to Flaconi and Pott’d and many more who are spending way less than 10% of revenue on paid to support their digital channels, and who are growing really quickly and profitably… but they are few and far between.
For years I have warned software vendors against telling retailers how to run their business and so I will shy away from giving out hordes of advice but there are some bullets that I would offer as good counsel that people really should start thinking about before the worst that can happen happens:
1 - Take a really good hard look at the way in which you spend your Media money. I know several very successful fast-growing businesses around Europe who do not pay the Google or meta tax in huge order, but instead focus on brand, service, retention and community - and they do not avoid the hard things.
2 - Examine the team motivation that you have that potentially causes you to have reliance on (or addiction to) that paid media spend. Are you spending it because everybody just thinks you should have to - we all know that there is a collective momentum that forces this spend: The agency; Google / Meta themselves; Shonky Analytics - all of these things are telling you to spend more money on paid because it's supposed to be very efficient but really and truly is it are you just a victim of this reinforced belief?
3 - Ensure that you give every possible channel the right amount of examination before you settle on an online only advertising program. There are significant opportunities in physical retail and as we all know there are significant opportunities in wholesale. It's no secret that Represent the clothing business has created a great deal of its growth over the last two or three years from stores and wholesale as a set of new channels. I could cite all sorts of examples of retailers who have managed to create a multi-channel strategy that has really paid off, growing from D2C.
4 - Whichever way you end up investing you will need to start using online as much more of a customer retention and growth channel than a customer winning channel just because of the cost issue. which means that organize enriching your customer data, creating the right kind of cohorts and communications that support stickiness and repeat purchase is is where a lot of your online Investments should be going. People at ny conferences have been saying it for years but in general most brands have not prioritized it because the lure of cheap social has been so shiny that it's been very hard to say no to that.
5 - Take a really good hard look at that thing that you call a Loyalty Program. does it incentivise the second, third and fourth purchase from a customer, and if it does not and if the incentives are not what they should be think really carefully and make the Adjustment now. Loyalty is a luxury that online cannot afford in the current climate - a good strong inventive program is.
OK - enough doom and gloom, but this was as much for my own sanity as your benefit - thanks for your indulgence.
We’ll be back in a few weeks
Jamie
Thank you Jamie, great article. The point about brand, service and community really resonates with me. I've always looked at a store as a channel, the main channel with all other channels as satellites. I do believe in measuring effectiveness but not in the traditional sense. Hence the importance of consumer insights and analytics.
Excellent piece thank you Jamie. Thought provoking as ever. And with just the right amount of typos to prove that you are a human intelligence not an articial one, but not too many to annoy...