The online shopping experience that Amazon created in 1995, and which we are all too painfully familiar with today, is focused almost exclusively on placing products into electronic catalog web pages and waiting around for customers to fill out and submit their orders: a paradigm that would be perfectly familiar to the Sears & Roebuck Company at the turn of the last century. So far, the great e-commerce revolution has turned out to be merely an electronic extension of catalog shopping: generally speaking, customers are using the Internet to buy the same products from the same retailers that they already know and trust. As a consumer experience, today’s Internet retail is really part of what I consider to be the second generation of shopping, reaching back to the Sears era with tremendous acceleration as catalogs have moved online.

Catalog shopping, whether on printed or web pages, offers the key transformative power of extending the shopping experience beyond the physical store directly into the homes and workplaces of their customers at all hours of the day. While this extension offers consumers the convenience of remote shopping on their own time-shifted terms, it has also fostered the separation of the overall shopping experience into a series of disjointed phases: awareness through mass-media advertising, brand impressions, and word of mouth; selection of products through images and description, prior in-store experiences, and recommendations; the fulfillment experience of placing the order and the shipping process,  the product experience itself when the item arrives and is used or consumed, and finally the service experience of resolving any questions or issues along the way.

Catalog shopping’s separation of the shopping lifecycle has tended to create a parallel separation in the way retailers and marketers address each of the phases, even for the vast majority of retailers who offer both in-store and catalog (web based or paper) experiences. Product advertising to create awareness is developed by a marketing group, whereas a separate in-store merchandising group worries about shelf space and layout. Another group manages the paper catalog and yet another business unit creates the web catalog. These operations are rarely linked in tightly to customer service, so that when the experience is going badly, there is no direct feedback to the people elsewhere in the experience chain.

By contrast, in the pre-catalog Shopping 1.0 experience, many of these phases would occur within a single store visit, where even the first awareness of a particular product might lead directly to purchase and consumption in a single unified process. Shopping for shoes in the 1.0 era represents a perfect example of the strengths of a unified shopping lifecycle: a customer gains awareness of the shoes she wants through browsing the visually rich and tactile displays, immersing herself in the products and selecting for the right combination of style, fit, price, and availability. She converses with her sales representative or with a friend or even just observes the other shoppers in her environment gleaning explicit and implicit cues to help guide her decision. Fulfillment is immediate and even consumption can be instantaneous, if she walks out wearing her new purchase. There is always someone to guide and assist with any issues, from awareness to consumption.

So the next generation of shopping can be viewed as a sort of synthesis of the 1.0 and 2.0 experiences, combining the high-touch, unified shopping lifecycle of the physical store with the convenience of the time and place shifting of the online catalog. With the continuing breakup of mass media, the Internet is taking center stage as the dominant channel for brand awareness both through explicit advertising and marketing, but also through implicit word-of-mouth buzz driven by the web’s flourishing social communication and networking facilities. Likewise, product selection is becoming more and more driven by the net as the primary source of information, reviews, and recommendations, fueled by broadband video and audio and ever increasingly sophisticated interactive shopping experiences. Finally, while fulfillment will always have to involve some form of delayed gratification, the customer service experience is being hugely enhanced online through highly responsive online help services, “click-to-call” solutions, and Voice over IP.

 These phenomena are effectively compressing the formerly disparate elements of the 2.0 shopping experience cycle into a single online channel, but with entirely new rules. The awareness and selection cycles are being increasingly driven by the two-way interactive medium of the web where the voice of the brand marketers must compete for attention with the voices of the end-consumers themselves. Even customer service is moving from a tight, centrally controlled business process to an open forum environment, full of information but also disinformation. As Internet visionary Esther Dyson commented on the launch of my latest startup, “You can no longer tell people about your brand; you have to let them experience it.”

Online shopping will move from a solitary, utilitarian task built around convenience to a destination activity where consumers specifically seek out the sites that offer rich, entertaining, and exciting experiences that they can share with their friends and families. In other words, someday soon, we’ll actually Shop online, instead of flip through endless catalog pages. The retailers, marketers, and brand managers who embrace and drive these changes will be richly rewarded with deep and lasting brand loyalty which will benefit all of their fulfillment channels. Those who can’t make the leap from electronic catalog pages will be left further and further behind.