It’s a buyer’s world. According to a new Constellation Research report, buyers are rulers served by channels galore, a fleet of payment technologies, supply chains ready to do their bidding, and Big Data tracking their every whim. To keep up, the report said, sellers need to align themselves with this new environment, which it dubs Matrix Commerce.

In its newest Big Idea report, called "Introducing Matrix Commerce", Constellation Research lays out its vision of sellers breaking down organizational siloes, addressing the complexity of meeting expectations of perfect orders, and creating a seamless experience for buyers.

Streams of Information

The report’s use of the world “matrix” is derived from the intersection of a variety of key factors, creating a grid of possibilities. But it could also have been alluding to the now-classic science fiction movie of that name, where the hero’s world is revealed to be just an artificial world created by streams of information.

Similarly, in this new world of commerce that the report envisions, buyers and sellers do not inhabit the reality we thought existed. Each has become wrapped in streams of information that are, increasingly, more valuable than the product or service in question. It adds up, the report said, to a “frontal assault and disintermediation of the traditional commerce model.”

New payment technologies shift power to retailers that provide digital wallets and to payment technology providers. Price-matching and inventories that are integrated between online and brick-and-mortar stores mean a continuous price war based on competing information, shaving profit margins. The reports notes that “products are now excuses to sell services such as warranty, support, installation and insurance,” and services are becoming “excuses to sell information streams based on the transaction data.” In some markets, Constellation points out, more virtual goods are sold than physical ones.

In this promised land of Matrix Commerce lives the Holy Grail: the delivery of a perfect order.

The Elements of a Perfect Order

A perfect order can have any many as 20 key elements, according to the report. They include delivery through any channel at any time, a consistent brand experience, the correct quantity and configuration, acceptable levels of quality, the correct packaging and installation, and so on. In short, a perfect order delivers a frictionless order process and personalized requirements across all channels and payment options.

Perfect Order.png

From the report, "Introducing Matrix Commerce"

The perfect order, essentially, is an artifact of the Matrix world, referencing here either the grid or the movie. But “in reality,” Constellation pointed out, “achieving a perfect order is not easy.” Sellers have to get everything right, it has to scale, a profit needs to be made, and, when sellers are lucky, they make a customer happy enough to stay a customer.

But even that’s only on the surface. Underneath, there’s frequently a disconnect. The report says that buyers are buying outcomes -- resolution of a problem, improved social standing or exceptional experiences -- while sellers are still selling product, price, place and promotion. “Sellers need to address the ‘why,’” Constellation said, “before the ‘what.’”

Feeling Like Neo?

Other dissonances in providing the perfect order include sellers not fully supporting end-to-end order processes and social media not being completely integrated with e-commerce activities.

That’s not all. Buyers want specialization, but that adds complexity. Business models are constantly changing, end-to-end product processes are not helped by so many software systems, omni-channel experiences are omni-complex, demand signals gleaned from Big Data are demanding attention, and don’t forget that supply chains are, in many cases, still working with the tools and attitudes of the last century.

At this point, a retailer might be feeling like Neo, the hero in The Matrix movie who thought he lived in a bustling city but instead found out that, in reality, he was growing inside a messy organic/machine pod and just dreaming up a city. Similarly, Constellation pops retailers’ reality bubble. “The era of transactional relationships is over,” the report declares.

Strategies for Survival

So, what to do? The report recommends ten strategies for survival in this new world, including listening to customers more, picking a single person to “own the perfect order,” designing for buyer outcomes based on experiences, prioritizing mobile and social, acquiring “commoditized market innovations” through cloud and other inexpensive solutions and getting prepared to handle complexity.

Overall, the report is chock full of thought-provoking insights that seek to link the huge changes being driven by technology with buyers’ expectations and sellers’ capabilities.

But, appropriately enough for a report using Matrix in its title, even one as packed with interesting ideas as this one, the report fails to deliver one basic component that also besets many other high-level research reports on This Era Where Everything Changes -- a glimpse of reality as we know it.

Even as it pulls back the curtain on what’s really happening in e-commerce, the picture would be so much clearer if there were example scenes. What is an example scenario of a buyer expecting one thing and the buyer delivering another? Or of a buyer getting just what they expected? How would someone who owned this kind of end-to-end process actually spend their day?

In research reports about the future we live in, as in The Matrix movie, disruptions in what we thought was reality become clearer when they are rendered as scenes in everyday life.