I am headed out on the road in the coming weeks. Part of the upside, and downside, of keeping up with the interactive marketing industry is the travel to conferences such as the annual eTail conference out in the desert. Some great speakers and topics are lined up this year including a great session on the merging of social networking with ecommerce. There are also a slew of “new ideas” and “groundbreaking tactics” that will be discussed which caused me, an occasional contrarian when the mood strikes, to wax nostalgic on the subject of retailing. This helps me crystalize how I see the “future” of ecommerce, now that present day ecommerce has evolved into a mainstream activity.

Remember department stores? Sears and JCPenney’s ring a nostalgic bell for some of us, even while they continue to stay in business. Higbee’s, Polsky’s, and Marshall Field’s for some of us northerners have a special meaning if we are old enough to remember them. The Higbee’s in Public Square in Cleveland was the site of the opening scenes in A Christmas Story - ahhh good times. The good times didn’t last much longer for the department stores, as they soon saw crested their hill and began the descent to their nadir.

Multiple forces have caused them to diminish in importance over the years. Suburbanization played a part, with the rise of Target and Walmart and the continued displacement of their original customer base away from their existing stores. But specialization did the most damage, with shoppers seeking to buy items both large and small from companies that focused on one type of product. Such stores as Best Buy in electronics, Gap in clothing (remember when all it did was sell Levi’s?), Home Depot in tools, and so forth, found that many consumers wanted both more choice and a unique shopping experience for each type of item they shopped for.

The mainstreaming of ecommerce over the last ten years has continued to buffet the department stores; and they have found it difficult to match even their diminished real world market share online. Meanwhile nouveau department stores such as Amazon have become an effective, if not terribly profitable, purveyors of a range of goods online. Starting out as a vertical play in books and quickly expanding ever since, they have become a modern day department store without the Muzac and crowded parking lots. The Gap has spawned further offerings at their sister companies such as Banana Republic and Old Navy both offline and online. Despite this, there has been a proliferation of niche plays in ecommerce who have done quite well by being very good at one thing. Bluefly in fashion, Zappos in shoes and countless others have driven their revenues continuously higher as they continue to sharpen their operations to realize profits. Micro niches have sprouted that would be unsustainable in an offline format: want to buy a environmentally correct yard appliance? Try People Powered Machines; but not before checking to see if the product you want is cheaper at Clean Air Gardening.

So what is a modern day ecommerce merchant to do to stay relevent to an increasingly fractured customer base that wants an unique shopping experience? How does an Amazon or a Gap not cede the lucrative shoe market to the shoe market niche players for example? The answer is easy from the view of quantative analysis: play the same game as the niche players but with better capitalization, technology, and efficiencies of scale. Flog the capitalist principles that have always worked but with a hefty dose of marketing pandering charm tossed into the mix. Amazon and Gap have both started playing the micro niche game by taking on the Shoes.com and Zappos of the world with their own seemingly stand alone ecommerce stores. Ladies and Gentlemen please start spending your money at the near infinite choice of shoes and handbags at Endless.com - brought to you by your friends at Amazon. Can’t find what you want? Try your luck at Piper Lime - no it’s not that chic boutique around the corner with off-street parking, it’s a niche-of-a-niche, conveniently brought to you by the Gap. These stores can showcase the same or expanded content from their parent companies in an online store that dedicates itself to the specific types of shoppers who seek that content and selection. This trend should expand significantly as larger ecommerce players build out specialty front ends tied into their generalist and efficient back end operations.

Staying relevent and providing an increasingly personalized and unique shopping experience is the new name of the game. It’s the same game that department stores pioneered by assigning an area in their vast expanses to goods of a particular type. But as the ecommerce experience has become more mature, we are now in the age where specialties are perhaps best served by efficient corporate operations that are tuned to provide efficient fulfillment and processing, with the purchasing power only they can provide. The drums of efficient capitalism beat on and the trend should continue to manifest itself over the short to medium term. Consumers will always seek both value and convenience in proportionate amounts even while they are attracted to uniqueness. The new ecommerce environment seeks to create that combination in an unique yet efficient way.

The new new thing is to exploit multichannel and enterprise channel size to outprice the smaller sites in search engine keyword bidding and other advertising, while still sustaining higher margins. These dollars can then be invested to add even more professional level content, imagery, and shopping tools and to expand out new micro niches as necessary. A new niche is only a cool domain name and an interactive agency RFP away once the sub-sub-market is discovered that needs to be addressed. Now if only these niche of niches’s could come up with better names than Piper Lime. For that we should blame the marketers, not the quant jocks who continue to devine the micro niches to exploit next.