Why the Future of Commerce Puts Audience First

Franco Varriano
February 16, 2021
 min read

As any industry takes shape and matures, two broad phases typically happen.

The first phase is all about experimenting and discovering new ideas. It’s about determining what puzzle pieces might fit together to produce something of interest. The second phase is to establish workflows and patterns that streamline activities from the first phase (because we know they work). This leads to best case practices and the professionalization of the industry.

These phases can be cyclical, too. Phase one restarts when there is a need to update best practices or change course because of new developments (emerging technologies, societal shifts, etc.)

In many ways, the digital industry is currently living through a repetition of phase one. We have reached a "mini-maturity" point over the last decade (which we've mentioned here).

At the same time, our industry is being disrupted by emerging technologies and new societal realities in response to events like COVID-19.

Because of this, as well emerging technologies and the social movement around Creators that we've seen continue to pick up steam over the past few months, it's safe to say that we've re-entered the first phase. What comes out of this re-exploration of the familiar will have deep and lasting impacts on the future of commerce and entrepreneurship.

New themes

There are several important indicators telling us we're back in a phase of discovery and innovation within the world of commerce and entrepreneurship.

This relates to the rapid rise in three key themes:

  • The Experience Economy (blended physical-digital worlds)
  • Social commerce and live streaming "Shopatainment"
  • Creators serving very specific, niche interests

Community and audience are central in each of these themes. Why these two groups? Why is this shift happening?

There’s a number of reasons:

  • The digital industry has evolved over the years, pushing creators to the forefront.
  • We are coming to the end of the era that allowed for marketers and brands to acquire customers and rapidly develop new products at low cost. More competition is driving up the cost of those same channels:
source: https://twitter.com/WilsonGHung/status/1080236415219322880
  • Customers are savvier than before. They not only care about how a product is made, but also who's behind it, the values of the company, the community of people it attracts and builds, and the status that comes from unexpected places.

So how do mainstream brands and entrepreneurs respond? They need to think like the disruptive entrepreneurs and creators who are rising beneath them.

The rise of Linear Commerce

Linear Commerce was a term coined by Web Smith, the founder of 2PM, a community dedicated to studying the intersection of media and commerce.

Smith describes Linear Commerce as:

A new approach to product and company building that starts with media efforts to drive the creation of an audience.

The audience-driven businesses that dominate Linear Commerce have figured out how to monetize their visitors: by creating content and products that continue to provide value and capture their attention and interest (AKA they’re tailored only to them as an audience).

One of the most successful examples of this Linear Commerce approach is Glossier, a beauty brand founded by Emily Weiss. What started as a blog turned into a $1.2 billion business.

Here's a quote from Emily about how she thinks about her company:

"We are building an entirely new kind of beauty company: one that owns the distribution channel and makes customers our stakeholders. By connecting directly with consumers, Glossier has access to endless inspiration for new products."

In our new digital economy, the actors (whether they are brands, entrepreneurs, influencers, or creators) that exist at the intersection of digital media and traditional eCommerce will see massive success, both now and in the coming years.

And unlike in the past, product, price, or cutting-edge technology isn't their key differentiator.

Rather, it's the fact that they continue to invest in and refine their audience.

source: https://twitter.com/balajis/status/1299733295219920897

Linear Commerce entrepreneurs and brands define success through organic and loyal audience growth—not search engine optimization or pay-per-click metrics. In doing so, they create their own niche, to the point where only they are able to satisfy the needs they've identified and created within their audience.

This is the essence of something called Category Design. The concept here being that your strategy isn't to compete in an existing market, but to create your own.

Category designers create their strategy in real-time and continuously refine it through authentic exchanges with real people—their audience and prospective market.

More on this in a moment, as we'll see why the next wave of creators are uniquely suited towards category design.

The future of commerce and entrepreneurship

Let’s be honest: many established businesses aren't designed to operate in this conversational and iterative way. It's not in their culture.

Linear Commerce and Creator Culture favors individual or small, lightweight teams of founders.

That’s not to say established brands can’t do it. Some will find ways of leveraging elements of this new model, though doing so will take entirely different skillsets and strategies than the ones that are native to creators with the aptitude to build and monetize their audience.

As David Perell writes, we’re now in a place where there are two kinds of companies:

source: https://twitter.com/david_perell/status/1279622498577858561

While both kinds of companies will continue to work, audiences expect greater interactions with the brand or creator, with each other, as well as with products themselves. Enter: the Age of Experience.

Creators are naturally more suited towards the Audience-First approach. Over time, they create their own niche (or design their own unique category), they don't "find" one.

What's powering this next wave of commerce?

As the next wave of creators and entrepreneurs learn more about the needs of their huge audience, they will be looking for new ways of delivering products designed exclusively for them (or risk losing their attention).

There are already many tools out there for entrepreneurs and creators, but this industry will continue to boom as a wider variety of use cases and needs emerge.

Over time, the most engaged portion of those audiences (the superfans) will also want to co-create—not only with the creator or founder of a brand, but with each other.

This product creation and co-creation space is one where we see a huge opportunity for a new class of tools. One where the software can both harness individual skills and also make the creation and personalization of products and experiences feel seamless and immersive.

This is what we're building towards at Creative Layer.

Sign-up now for early access to be among the first to use our solutions, or follow us on Twitter or LinkedIn to learn more.

We're also hiring people who share this vision and who want to help us shape the future of Linear Commerce. Don't hesitate to reach out if this sounds like you!