The Glu to virtual reality concept

E-commerce has learnt the hard way that in business-to-consumer marketing, the senses trump convenience. At a practical level, it makes sense for people to shop from the convenience of their homes.

Despite that, we still walk by to the neighbourhood convenience store and browse, stopping at the fruits section and then the freezer. Our minds subtly and instantly transport us to France or New Zealand or wherever else the produce originates.

Big brand car manufacturers have to deal with one unique sensory challenge of sound damping. For enthusiasts, the rather "musical" note of the engine also gets drowned along with the sound of the tyres-on-tarmac and the surrounding traffic. BMW has solved this by amplifying the sound of the engine through the audio system in their M cars.

In the book Customer Sense: How the 5 Senses Influence Buying Behavior, Aradhna Krishna, business academic at the University of Michigan, describes among other things, Singapore Airlines' use of a signature smell in lounges and the aircraft, the tactile feel of an i-Pod Touch, the popping of a bag of potato crisps and the unwrapping of a Hershey's Kiss.

Even serving staff in restaurants know that the secret to bigger tips is a very brief touch or subtle eye-to-eye contact.

E-commerce is a very flat sensory experience. Probably better suited for areas like business-to-business selling or narrow focus on specific verticals like books or electronic goods. Although the e-commerce business volume is pegged to reach $4.5 trillion by 2021, analysts estimate that one-third of goods bought via e-commerce are returned (up to 50 per cent for luxury goods). A 10 per cent rejection rate in e-commerce in 2021 will result in $450 billion of lost volume. Many e-commerce experts miss one hypothesis - that the primary driver for rejection is the gap between perception and reality.

Putting more drones to work, creating payment wallets and cheaper prices are only superficial solutions. In most markets, e-commerce doesn't exceed 10 per cent of retail volume. E-commerce really began more than 40 years ago with a jump 20 years back because of the growth of the internet. But the overall share has not been spectacular, especially when you compare it with industries like mobile telephony that emerged around the same time.

Ishmael Bahadur, CEO and founder of Glu (www.glu.ae), a UAE-based interactive technology agency, is all too familiar with this. Raised in the UK, he grew up in the '80s, working his way through school and college then dropping out from university to set his sights on a thriving fashion brand, which he developed as a success in just three years. He's understood from the ground up the need to anticipate and produce what the end-user wants. It's not just a cut-and-tailored piece of cloth but an entire sensory experience that the end-user buys into. Technology is not an end in itself but merely an enabler to help achieve that target.

The writer is a partner at BridgeDFS, a bespoke financial advisory firm (www.bridgeto.us). Views expressed are his own and do not reflect the newspaper's policy. He can be contacted at ves@vyashara.com