The first wave of e-commerce was built around the functional. Amazon, CDNow and others succeeded in putting the basic shopping experience online. It was hard enough for sites to translate our mouse clicks into packages that we’d receive, with all of the attendant systems, workflow and business processes that needed to be put into place. It was hard and expensive to get basic e-commerce order and fulfillment, and their attendant business processes, in place. At Live365, we spent more than a year and burnt more than a $1 million in 1999 building an online store to sell CDs. One could have the same front-end functionality today for $99 a month using Shopify. Ouch.

That’s not to say that the first generation e-commerce companies didn’t innovate. CafePress, eBay, Hotwire, Lastminute.com and Priceline, among others, innovated on the business model front, but their sites tended towards the utilitarian, rightly eschewing anything that might distract the user and impact conversion rate.

“Here we are now, entertain us!” — Kurt Cobain

Enter the second wave of e-commerce

Not so the new breed of e-commerce sites. They obviously optimize for conversion. But their core value proposition is based on entertainment, gaming or social. To channel Maslov, now that we’re able to easily buy the stuff we want and need online, we look to fulfill our “higher” needs via commerce: To express ourselves, to identify and connect with one another, to be entertained.

Companies are popping up and getting funded in several categories:

Flash sales: Vente Privee, Rue la la, Gilt, JetSetter and their kin were probably the first to go for high production values in the presentation of their product. This high-gloss veneer combined with the urgency and serendipity of a flash sale clearly struck a nerve. Fab.com is clearly on to something in this arena. As my friend put it, “It’s where people go for a little product porn during their lunch break.”

Crowd-sourced, user-created, demand-led: CafePress and Zazzle are the pioneers in this category. Threadless and its clone, Spreadshirt, have brilliantly built design-oriented communities with a game component. Made.com is taking a different approach by ensuring demand for their products before they get manufactured.

The new window shopping: Open Sky is a platform for celebrities and experts to curate things for us to buy. Others, notably Pinterest, Polyvore and Svpply, are taking the notion of curating to the logical next step by allowing us to roll our own lists of things we love, while FantasyShopper here in the UK, is introducing a game-like element to this.

Story-based commerce: As high-end brands have gone more and more mainstream, we increasingly desire other ways to express ourselves. Products with stories behind them are one way of doing this and Etsy, the platform for artisans, stands tall in this area.

S-commerce: Subscriptions, that is. ShoeDazzle, Birchbox and Trunk Club are high-profile examples of sites taking a subscription approach that gives their subscribers both cost savings and a “story” from the serendipity of what you get in your monthly shipment.

Big brands: Not to be outdone, the luxury brands are increasingly investing in entertaining their consumers online. Victoria Secret, with the annual runway show, is probably the pioneer in this area. But nearly all brands are investing heavily in rich media content including Ralph Lauren, Burberry and Hugo Boss.

This is by no means a comprehensive list of the models and activity in the space (unlike Elizabeth Knopf’s exhaustive analysis on Quora on why e-commerce is such a hot area in VC) but it hopefully gives a glimpse as to the “new new commerce.” It may well become the norm in the years to come as these new sites grow into their own, and as the incumbents respond in kind. We will simply expect our online shopping experience to be social, to be fun or to have beautifully presented products. As we’ve seen in music, there will be different curators in fashion, travel and other categories, from whom we will decide what to buy. Pinteresters, Polyvores and Svpplyers whose influence may well rival that of magazine editors and retailer buyers.

But in fact, the new new commerce isn’t so new: Artistotle is said to have noted that “Man is, by nature a social animal.” He was on to something. In fact, the fear of people and public places, agoraphobia, is literally “fear of the market.” Whether it’s the storytellers spinning yarns in the main market square in Marrakech or the flower sellers on Columbia Road hawking their wares in their Cockney accents or the auctioneer at the county fair, we have socialized and been entertained while shopping for centuries. And as long as we remain a social animal, it’s only natural that we will look for the same fix online.

With its emphasis on design, Fab.com has become a go-to site for "product porn."

via gigaom.com

By Graham Charlton 

Online shopping around the world (via Pod1)

What are people really buying online? (via Buysight)

How big is e-commerce? (invesp via GetElastic)

Online shopping in the UK (via giveasyoulive)

How does colour affect purchases? (via KissMetrics blog)

Small businesses and e-commerce (via Formstack)

The state of social commerce (via Socialcommerce)

Shipping and e-commerce (via xemiom)

US e-commerce trends (via bitwizards)

Seven reasons people fear e-commerce (via refresh)

via econsultancy.com

By Chris Brogan

First off, if you’re immediately thinking, “The LAST thing I need is to figure out yet another social network,” you’re totally right. This is the last thing you need. However, if you were fortunate enough to be a CMO back in 2007, and you said that about the transition from MySpace to Facebook, then you know what happened to people who didn’t surf the new wave instead of riding the one that petered out.

I’ve logged over 250 hours (and counting) inside Google+ so that you don’t have to, but I will say this: If people are asking for what the next big thing is for online marketing, mobile marketing, digital communications and social media, this is certainly my pick for 2011. We have to look at it. And to that end, I have 10 things for you to think about:

1. A social network made by Google impacts search. Google isn’t saying it like that, because they wouldn’t want to cause a panicking stampede, but think about this: Google has all the data from Google+. They can’t get any data from Facebook. Google controls search. Where would you cast your vote for search-improvement activities?

2. Google+ evolves from Gmail. No matter what the kiddies say, email is still the digital communications backbone of the modern world. SMS might feel like second place, but it’s a distant second. Google+ is very tied to Gmail, with hundreds of millions of users. It feels very natural as an extension in a way that Twitter and Facebook do not.

3. Business pages are coming. Early reports from users are, “It won’t matter. There’s no support for business pages.” That’s not true. Business pages are being developed now. Imagine the power of Google Places, Google Local, and several other Google products that formerly seemed lame and disjoined now acting inside one unified communications environment. Yeah.

4. 10 million users in the first two weeks. There’s limited access to Google+ at the time of this writing (Google did this with Gmail back in the day), but Larry Page reported on their earnings call that they’ve already let 10 Million users into the system. Some aren’t active, and you’ll see reports of that, but most are learning a whole new way to connect.

5. This blends personal and business. Google+ allows users to categorize their contacts into “Circles,” and then allows you to message those circles individually. Thus, your “prospects” circles could get your business information, and your “drinking buddies” circle can hear about that great new Belgian wheat you tried. Both will add value.

6. Google+ is already indexed and searched by Google, making marketing searches much easier than other platforms. Just drop “site:plus.google.com” before any search in Google, and you’ll see what people are saying about you inside the platform.

7. Lots of companies block Facebook.com. Yes, you can block plus.google.com without limiting access to Google, but many companies won’t be doing this for a while, so there’s a window of opportunity where marketing behind the firewall (you don’t do that?) will be a potential leverage point.

8. Don’t think “social network.” Think “communications backbone.” This tool allows for private collaboration (privacy is much easier to understand here, but it does require some learning), and permits a “one stop” kind of area for talking internally and externally without causing problems. And it works with email, not in lieu of email.

9. Google is committed to this platform. Unlike other attempts in the past, the mandate at the beginning of 2011 was to blow up social networking and mobile, and most of the leadership of Google and their subordinates was given ultimatum-sounding language to that effect. Why should you care? Because that means they’re committed to making this platform amazing for you.

10. First movers win. Okay, this depends on you, the CMO, and your marketing strategy. Are you a “second to market” kind of marketer? This might not be as useful. But if your leadership is calling for you to be FIRST at something, Google+ is one way to get out there ahead of the competition: At the time of this writing, Ford has a huge presence on Google+. GM and Chrysler (not to mention the other companies)? Not so much.