The future tends to resemble the past. Railroads, bridges, and highways democratized the American economy; eCommerce infrastructure will do the same.
When considering the impact of eCommerce, look beyond the brands, marketplaces, blanding, and pixels. Instead, see railroad planks and westward tent towns as far as the eye can see. Commerce is what happens when infrastructure meets opportunity.
Between 1871 and 1900, over 170,000 miles of railroad tracks were laid, fortifying the five transcontinental railroads, the first of which was completed in 1860. By 1900, the other four had been developed, connecting the Pacific coast to the eastern states. Along the way, centers of commerce developed around railroad hubs.
Chicago built its first rail connection in 1848 to connect the Windy City with the lead mines of Galena, Illinois. Later lines connected the city with Detroit, Cleveland, Cincinnati, New Orleans, St. Louis, Kansas City, Omaha, and St. Paul. The sudden rise of rail-based commercial transportation corresponded with Chicago’s post-Great Fire building boom. [2]
For the majority of North America, the online retail industry of today is analogous to the infrastructure of old: It has the potential to change one’s surroundings. The development of eCommerce capabilities will influence much of the rest of our lives, including how we live, how we buy, what we eat, where we work, how get there, and where we shop.
Chicago became the center of commerce in the West as constructed railroads, bridges, and automobile travel formed new patterns of agglomeration and consumerism. The infrastructure of its day captured new opportunity where there was none. Today, eCommerce is the infrastructure that will quietly influence industries from real estate to telemedicine.
We must begin viewing investments into our eCommerce infrastructure no differently than our predecessors viewed their investments into roads, bridges, and tunnels. The rest of the digital and physical economies will depend on that infrastructure: databases, financial technology, warehousing, logistics, privacy systems, and trust. Each are hallmarks of the eCommerce industry, but rarely do we consider how they can impact industries that have long been without these norms.
Democratization: The true benefit of eCommerce
In one day, I experienced three interactions that will be influenced by eCommerce infrastructure in much the same way that quiet towns grew to booming cities after the arrival of railroads.
The disappearing sleazy salesperson. By 9 a.m., I was at a car dealership for an oil change. The conversation of a new car purchase arose. And when the dealership felt that I was a serious buyer, a contract appeared on a table. The trade-in price was determined by a person who was incentivized to minimize the value of my vehicle. Knowing this, I made a call to another dealership who then offered 7% more for the same exact vehicle. The existing dealership agreed to the true value of the trade-in, but only after it was revealed that they undercutted my price to boost their own profits.
Tesla and Carvana are among those fixing a retail institution that’s built on an extraordinary lack of trust. Traditional dealers are not far behind. A recent report on a major English automobile dealership franchise proves as much.
Recent research conducted by automotive industry IT services and consultancy NTT Data found that one in six people are looking to only use online platforms for future car purchases. Its findings represent a 500% increase on those that have previously bought a car entirely online. [5]
The disappearing housing bias. End-to-end eCommerce may promote the democratization of where and how we live. Moments after opting out of the purchase, I drove to a plot of land in a suburb of Columbus where my family is building a home. The concept of “sanitized urbanization” was inspired by this area and covered in an August 2020 edition of 2PM:
Polycentric development is a pattern of transport connectivity, urban planning, mixed-use development, and progressive design concepts. The result of these accelerations, interruptions, and inventions is a new classification of suburban development that will become more commonplace as younger earners continue to flee cities. In kinder terms, sanitized urbanization takes the best parts of urban renewal and imports them to upper-middle class and wealthy exurbs. Dublin, Ohio’s Bridge Park is a great example of a polycentric development, featuring a member club, modern hotels, and top restaurants. [2PM, 2]
I sat in my car as I read a report from our local business press on the housing market in the area:
Several residents submitted comments that said they worried about increased traffic a “change in demographic” that renters would bring in a neighborhood that is largely owner-occupied. [3]
I am that change in demographic. The homebuilding process and its politics have not been easy over the past year. In The Opendoor Policy, I explained: “The path to middle-class home ownership is rife with unspoken obstacles and time-hardened customs. For immigrants and minorities, the obstacles can be even higher.” [2PM, 4] I wonder what innovations the democratization of eCommerce can bring to the often-twisted forces of human subjectivity.
The disappearing obstacles to preventative care. Later that afternoon, I experienced a small medical emergency that I was able to identify early thanks to a combination of wearables and available bloodwork. As I rushed to a medical facility with a resting heart rate of 168 beats per minute, I prepared myself for the succession of questions from a nursing staff and the attending physician. Neither had access to data from companies like Levels, Whoop, or Base, a health tracking system that measures vital systems through in-home lab assessments. Without context, they searched for the problem rather than finding a solution to what had already been identified.
Integrated healthcare and preventative medicine may become the technological issue of this decade. The technologies, no longer just for overzealous weekend warriors, have moved into the mainstream for anyone who wants to better understand their own health in a cost-effective way. In response to thoughts on the need for these integrated technology and care, a medical doctor replied:
Access was greater when your contact point was in the same place as your doctor. “Press one to make an appointment. Press two for billing…”
In each case, eCommerce can systematically democratize key functions of our lives by removing the gatekeepers. Much like railroads provided access and commerce, new technologies can simplify the purchase of a car, remove bias from the purchase of a home, or provide peace of mind without dialing a number to make an appointment with your physician.
While brands, marketplaces, and concepts like Stitch Fix, Allbirds, Amazon, DTC, HENRY, and Shopify define eCommerce today, they won’t forever. The merits of eCommerce will be at its fullest potential when digital transactions become enjoyable, objective, and universally available. When you think of eCommerce, consider roads, railways, and bridges. And then remember how those tools connected an expansive, underdeveloped nation to opportunity and greater freedoms.
By Web Smith｜Editor: Hilary Milnes｜About 2PM