Illustration of rocket tacking off and planets on colourful background

Space commerce

Joseph Gilligan and Minos Makris explain why the commercial opportunities of space should be on businesses’ radars

The sky is no longer the limit as the final frontier becomes the next battleground for commercial dominance. Over the past few years, the commercialisation of space has taken some significant steps forward.

The space race is no longer limited to governmental bodies and space agencies – billionaires like Jeff Bezos, Richard Branson and Elon Musk have become the new major players. Their collective desire to use space for commercial advantage, once an unobtainable concept, is fast becoming a reality.

What is space commerce?

For now, commercial interest in space focuses on the immediate environs around Earth’s orbit, and as far as the Moon, Mars and the asteroid belt beyond. At this very early stage, we’re also talking about space-to-earth enterprises – how space-based resources can be used to benefit commercial interests on earth.

However, there is also a value to making incremental breakthroughs in technology and infrastructure, which will allow humanity to push further and further into space. For example, both SpaceX and Blue Origin have been awarded NASA contracts to investigate how to produce fuel from materials found on the Moon and Mars that could be used to refuel rockets.

Refuelling deep in space would, of course, allow us to explore further and make the prospect of off-earth colonies more viable. These kinds of longer-term ambitions also have a commercial value in the here and now, not least because they are attracting big investment.

Why should you care?

Unless you’re a billionaire plotting your own space programme, or a digital hardware start-up looking to jump into the nanosatellite market, space commerce can feel a long, long way away. Yet, for all it might feel like pie in the sky, we can think of three good reasons why, at the very least, you should be keeping tabs on current celestial developments – otherwise you run the risk of being eclipsed:

1. Some competitors are planning ahead

If you’re a retailer, consider this: Amazon, an organisation that commands nearly a fifth of global online consumer spend, is already heavily involved in the space commerce race.

Fast-forward 10 or 20 years. Picture that, by then, the Bezos empire has formed a constellation of nanosatellites and is beaming its digital services to every corner of the globe. Imagine it also has a fleet of reusable rockets continuously ferrying people and payloads into space, and perhaps the first fully automated off-world fulfilment centres, which help to carry goods to previously hard-to-reach markets and establish sub-12-hour deliveries as the new norm.

What impact could all of this have on Amazon’s business strategy, on the services it provides, on its market reach? More importantly, what impact would it have on you?

Understanding how space commerce, and the major players who are already involved in it, will evolve is essential to understanding what commerce will look like in the future, and to formulating long-term plans for how you will compete.

2. Early investors will be the gatekeepers

The companies who have already begun to invest in the infrastructure of space will be those who control how any future commercial ecosystems work.

This poses two challenges for ordinary businesses that don’t yet have a stake in the game. One is that most organisations operate around short-term planning and investment cycles – just 15.5 months on average, according to a survey of commerce leaders we undertook in 2019.

Playing the kind of long game that Amazon/Blue Origin, SpaceX, Virgin Galactic and others are doing in space just isn’t in most companies’ DNA.

Secondly, we already live in a world where commerce businesses increasingly rely on the infrastructure of other organisations to operate. In digital commerce, if you own the interface, you own the customer. If you own the customer, you own the data. If you own the data, you own the future.

Those who control the infrastructure required to make space commerce happen will wield an enormous amount of power.

One thing businesses can invest in right now is research and due diligence into the potential consequences of space commerce for their organisation. How might you build alliances with them that are profitable for you? How can you future-proof your business so it is ready to adapt flexibly to whatever shifts in production, resourcing, logistics and service delivery might be on the horizon?

3. Consumers are ready for space commerce

We preach the importance of listening to customers whenever it comes to picking which trends to follow. This shouldn't be any different when considering whether space commerce is something worth taking seriously or not.

More than half (56%) of the people we spoke to believe space commerce is a real possibility. Almost a third (31%) say they are excited by the prospect, with the same percentage saying they believe space commerce could benefit them personally. Just 19% say they are concerned about the idea.

While we might expect a firm majority of people to baulk at the idea of travelling into, and perhaps living in, space, a surprisingly high 47% of people told us that they would be happy to apply for a job away from Earth.

It also appears that few would grumble about the commute, with a UK poll suggesting that 14 million people would welcome a trip to space, with 9 million willing to consider parting with their life savings to fund it.

Who benefits from space commerce?

The answer should, surely, be all of us. Yet just 15% believed that the billionaires’ forays into space are for the betterment of the human race, while 36% believed that they were pioneering into space primarily for their own benefit.

While their motivations may not be entirely altruistic, Branson and his space race rivals are playing an important role in pushing the boundaries and reducing the cost of access.

For instance, it used to cost $54,000 to fly a kilogram payload into space. SpaceX’s Falcon Heavy now does it for $14,000.

Asked which of the billionaires they believed were in pole position to win the space race, 24% of consumers said Elon Musk’s SpaceX programme was the most significant player in the market, with government agencies (22%) in second position and Jeff Bezos (17%) in third.

Who will stop the Star Wars?

Humanity’s exploration of space carries risks as well as rewards. Nearly half of the consumers we spoke to agreed that the commercialisation of space could act as a destabilising influence on peace and cooperation on Earth. Control of off-world mineral resources, transport routes and the infrastructure that will support space commerce could easily tip the balance of power on the planet. Wars have been fought for much less.

There is little, if any, regulation of how the commercialisation of space could progress, and the more organisations and entities that enter the race, the higher the competitive stakes will rise, pushing players to adopt defensive and protectionist stances to guard their assets.

Of course, we know that many of humanity’s greatest achievements have been born from a spirit of cooperation and collaboration fostered during challenging times. Many of our achievements in space exploration to date stand out as examples of that.

Who should regulate space commerce?

Who should take responsibility for implementing and administering this order in the wild, untamed frontiers of space? Just 18% of the consumers we spoke to believe that it would be a good idea to let the current crop of space commerce pioneers self-regulate, again revealing the degree of mistrust felt towards their motivations. Instead, 26% said regulation should be agreed and managed by a partnership of individuals, corporations and governments, with another 25% saying it should be governments and space agencies who take charge.

In a broader sense, collaboration is absolutely the future for space commerce. For years, space has been the domain of the space agencies. Now, we are seeing governments and space agencies cooperating with private companies and corporate entities, creating a brand-new commercial ecosystem for space exploration that sets the template for how the next phase will evolve.

Space commerce is a reality

Space commerce is no longer just a big idea that might someday come to pass. It’s already a reality, with major corporations backed by some of the world’s richest entrepreneurs laying the foundations for nascent markets with active commercial transport contracts, heavy investment in technology and infrastructure, and a focused drive to cut costs and make space more accessible to all.

Businesses that dismiss the concept of space commerce as fanciful, or something for the future, risk missing the launch. Opportunities are revealing themselves in the here and now, and competitors are preparing themselves to jump all over them.

What should businesses do now?

  1. Get up to speed with space commerce. Know what the situation is right now and how it’s developing.
  2. Understand how space commerce will develop and grow and defi ne how your long-term strategy might be affected.
  3. Are there any experiments that you could back to take place in space? Are your competitors already up there conducting experiments of their own?
  4. Consider how your products and services could be revolutionised by operating in zero-gravity.
  5. Don’t think you need to go at it alone. Seek alliances across your sector and industry, and align with credible bodies looking to influence, shape and regulate space commerce.

Further contributors include: the wider Wunderman Thompson Commerce Marketing Team

Read more from Atticus Journal Volume 27

Joseph Gilligan and Minos Makris

Wunderman Thompson Commerce

published on

06 December 2022

Category

Commerce Technology & data The Atticus Journal

Related Topics

Industry insight Tech & Digital Services Transportation

More in Commerce

Pie chart made of colourful building blocks and a small shopping cart on pink background

Creativity + data propel end to end commerce

We now have the data to understand precisely where and how people engage in commerce, says Beth Ann Kaminkow, Global CEO of WPP’s VMLY&R Commerce. But let’s not underestimate the creativity required to design a compelling customer experience (CX) that converts – regardless of channel

Blue background with retail and commerce graphics

Commerce: innovation and inspiration

Commerce has entered a new phase. Brands are harnessing creativity, putting the customer experience front and centre, tackling carbon generation and employing AI technologies.

Illustration of people in a circle with a football, games controller and musical notes

How to S.C.O.R.E

VMLY&R COMMERCE’s Jon Goynshor explains S.C.O.R.E. – a framework for maximising brand collaborations in the new world of entertainment commerce