Whether this vendor is a daily deal site like Groupon, an online marketplace like Amazon or eBay, a coupon aggregator that helps brands distribute offers, or a CRM platform that helps companies maintain relationships and drive future sales; if there is a need that a third party can solve, chances are that company exists today.
The problem is that each of these vendors probably exists tenfold.
LUMA Partners has become known for their product of LUMAscapes, industry mapping charts that have become synonymous with overabundance in the ad tech industry, and I personally have become very familiar with their Commerce LUMAscape, which contains all of the categories I mentioned above, along with buckets for Exchanges, Storefront/Cart, Social Commerce, Flash Sale Sites and many more.
My company, Sparkfly, currently competes in the Analytics bucket, and as I look out at the wider landscape, what I see is a need for focus and consolidation. I don’t think it’s a bold prediction to say that having so many companies doing the same thing is not sustainable, and for some, unfortunately, there just may not be enough business to go around. For every company on this chart who may be going through hard times though, I expect 2-3 to be serious acquisition targets. Even for behemoths like Amazon and Google, it’s remarkable how many things they cannot currently do, and in many cases, they are presented with the buy vs. build dilemma where they have to weigh capital against speed to market.
What this points to is that the LUMAscape will not stay the same. In some cases, we may see logos slowly come off of the charts, and in other cases, we will begin to see more companies with the red dotted line around their name, indicating an acquisition.
While ad tech companies sometimes have reputations for solving problems that don’t need to be solved, there is no denying that companies focused on commerce are trying to figure out important problems. We are in a new era when it comes to how consumers shop, and for retailers, brands and other companies trying to drive sales, this LUMAscape may look intimidating, but it should also give off the appearance of opportunity, and if you look closely enough, dollar signs.