Talking to Gen Xers and Gen Ys lately, I realize how dramatically e-commerce is changing retail business and customer service.

Opening up a store used to require renting space, furnishing the store, and working arduous hours. The last is still true but not the first two. Businesses are thriving without a physical location. In fact, many are able to exist because they skip the fixed costs and upfront investment of a brick-and-mortar store.

Being a retailer without brick and mortar is about YouTube “how-to” videos and setting up online communities, whether for truckers, photographers or new moms.

Take those moms. A whole subculture has grown up around what would seem to be a very small niche market: women who want to use cloth diapers for their babies. Many of the vendors are moms themselves, like Bethany Grosser, who started Little Spruce Organics so she could stay at home with their own child.

While that niche may be small in any given city, it’s huge when multiplied by the number of moms who are online worldwide. Yes, these stay-at-home moms selling hand-made wool diaper covers do ship globally. They have to. They wouldn’t be able to stay in business if they relied on their own neighborhood to keep them going.

More importantly, a lot of those moms — who do most of the family shopping — go online, even when in the midst of big cities. It is a lot easier to wander through websites after the kids are in bed than it is find a sitter or push a stroller through the store.

Add to that the online communities where doubts and confusion about motherhood can be discussed with virtual friends who will also pass on recommendations and reviews. Throw in dozens of YouTube videos, comparing the use and virtues of different brands, and you have a very knowledgeable consumer who knows how to make herself heard if she is pleased or displeased.

By the way, this isn’t just a mom thing either. Techies, photographers, auto enthusiasts, and those who like really high-end products for themselves and their homes look for them, talk about them, and buy online. Even people who want to find out about retirement planning and get a recommendation for a financial planner can and do shop online.

What does that mean to customer service? For starters, customers are doing a lot of comparison shopping for both price and features. They are talking about their experiences with products and vendors. What can you offer that the competition doesn’t? A better return policy, free shipping? Maybe that’ll do it but I think you’re going to need more:

• information videos
• discussions that make the customer feel at home when buying from you
• personality
• values the customer can feel good about

We’re going back to the old days when you knew the green grocer and he knew you, where you chatted with your cousin or your neighbor while you placed your order. People are shopping where they feel at home, valued, can talk about what worries or excites them, and can meet up with friends.

Yes, very small start-ups can do all this with online marketing. And if you’re not already, you’d better get started. This is the marketplace of the future, as some very big players have already figured out. To see how the big guys do it, check out Baby Center.com, a member of the Johnson & Johnson family, although that’s mentioned only in the fine print.

How are you going to compete online?

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