Operating Systems for ecommerce
Today, we'll talk about operating systems, but NOT the ones you usually use; instead, we'll discuss those being created to solve the main issues in ecommerce.
Today, we'll talk about operating systems in ecommerce.
But first, let me start by talking about the tool that has most changed my way of working in recent years: Notion. It’s my "knowledge operating system":
If a piece of information passes me by and is relevant, it goes into Notion and stays stored there for future use.
The internal search is fantastic. Many times I turn to my Notion repository first instead of Google. I only search through my validated content.
Creating new content is a delight. Without leaving the tool, I can search, connect, enrich, and transform all that captured information to my liking.
And now, with the huge layer of AI it has, I can ask it questions about my content, ask it to write things for me, improve texts, provide ideas,etc.
The EcommLetters come out of Notion, the stories I tell you come out of Notion, the tools I create come out of Notion. Even my novels come out of Notion.
It’s a fantastic example of what I want to illustrate next.
Operating Systems for Ecommerce
Along the lines of this “knowledge operating system” concept, a reflection arises, thinking about ecommerce:
How could we benefit from a higher level of abstraction that would make us more efficient and productive? Where could we apply this "operating system" idea to simplify management and online sales processes?
If we think about the tech area, we see a clear advance in that direction with ecommerce SaaS platforms like Shopify or BigCommerce. One of the main advantages they offer is the ease of interconnection, through modules or apps, of all the tech components needed for an ecommerce site to function. By visiting the official marketplace of each platform, we can install any program we need to equip our ecommerce "operating system" with new functions.
This isn’t something new; all ecommerce platforms now have these ecosystems of extensions, created by third parties, that facilitate the “extension” of functionalities. You’re all familiar with apps, modules, extensions or templates.
What’s interesting about SaaS solutions is that they are like a “cloud operating system”: we install extensions with one click and don’t have to worry about anything else; the software integrates automatically, our store acquires these new features, and everything works for us without worries, without seeing the code, without having to care for anything breaking.
It resembles what we all do daily with our phones and app stores, which revolutionized software access.
This level of abstraction is wonderful and allows many ecommerce teams to be autonomous and not worry about technology. They have a good operating system and focus on what’s important: operating their ecommerce.
What other areas of ecommerce could follow this path?
Thanks to this democratization of ecommerce technology, in recent years, countless digital brands have sprung up to sell online and conquer markets worldwide. It’s the wave of DTC (direct to consumer), which established brands also join to avoid full dependency on retail. They want to know their customer better. Everyone wants to sell directly to the customer, at least part of their revenue.
And then comes the chaos of ecommerce operations, where we have to:
Ship orders, one by one, to all the markets we operate in.
Handle taxes, customs, fees, and other bureaucratic matters.
Track those shipments, for us and the recipients.
Endure the hell of returns, one of the most significant headaches.
If you sell online in a cross-border mode, you know what I’m talking about. A nightmare.
Perhaps you haven’t seen it yet, but that additional level of abstraction we saw in web technology might be coming to ecommerce operations, through companies like SWAP.
What is SWAP?
Founded in 2022 in the US, SWAP brings a fresh vision on how to help online stores sell in other international markets.
SWAP's ecommerce operating system manages all operations for DTC brands, including shipping, tracking, parcel protection, returns, and cross-border commerce. They’ve recently raised $9 million to enhance their service: the new SWAP Global will allow the company to help DTC brands unlock new markets with duties-paid shipping, automated tax remittance, and express customs clearance. Sounds wonderful.
If we focus only on global product returns, we see that in 2022, consumers returned products worth more than two hundred billion euros, representing just over 16.5% of total ecommerce retail sales.
For every billion in sales, the average retailer incurs $165 million in returns. And growing.
Another fact: for every 100 euros in accepted returned merchandise, sellers lose about 10 euros due to return fraud.
This is rarely discussed. SWAP is tackling this problem by offering consumers a platform that facilitates returns, product exchanges, or receiving store credit. The benefit for the online store is that SWAP’s team handles all direct relationships with carriers, insurers, and recycling companies, managing everything under a single platform for the brand. Additionally, SWAP handles all global tax declarations and duty refunds through localized tax and VAT submissions by country for all international shipments.
Customers will save a lot of money (and headaches) by accessing and using SWAP's tax IDs for global auto-filing of duty refunds on returns. SWAP already works with hundreds of DTC brands in the US, such as PANGAIA, Retrofete, Hill House Home, Drake’s, Percival, and Nadine Merabi. This sounds quite promising.
What other initiatives do you know of in this field of easing ecommerce operations?
Perhaps you know the folks at Reveni, good friends, who improve the returns and exchange experience in ecommerce.
Or the people at Returngo, who add the sustainable touch to the ecommerce equation. Anything sustainable interests me.
Or maybe you know Loop, which focuses on reducing the number of returns and, above all, maintaining the online store's revenue.
I see a promising line of work here. If digital brand ecommerce wants to continue competing against global marketplaces, this could be the path: offering both sellers and buyers a set of solutions that make life easier and solve one of the significant problems of online sales: selling far and making returns easy.