Apr. 23, 2021
The Silk Route was a historic trade route, which stretched from Asia to the Mediterranean, the moniker derived from silk trading – a fabric that originated in China. Apart from silk, different fabrics, grains, spices, fruits, vegetables, and various valuable items were also traded via the same route.
Along this route several groups of trading posts and markets facilitated the transport, storage, and exchange of goods. And that's how the first-ever Global Marketplace took shape.
What is a marketplace?
There are many forms of marketplace like the malls, shop-in-shop, or neighborhood markets. The main street too can be considered as a marketplace where the shop owners set up, merchandise, market, and enable a seamless shopping experience for their customers.
Online marketplace, like Walmart.com provides a platform for sellers to set up their store and merchandise their products. These platforms provide the infrastructure (website, hosting, transactional APIs, etc.), attract customers, deliver seamless shopping experience (browse, search, cart, wishlist, discounts and promotions, etc.) to customers and enable seamless customer transactions and manage fraud, provide IP protection.
Finally, these platforms provide value-added services like advertising and shipping services, along with providing valuable insights to sellers to grow their business on the platform.
In the future, we anticipate the marketplace platforms to provide a seamless experience between the digital and physical world, blurring the lines between shopping channels, and further improving customer shopping experience.
What makes marketplaces the go-to solution in an otherwise saturated eCommerce market?
Win-win scenario – Marketplace attract sellers (easy discovery of products), customers (competitive prices, personalized experience), and platform providers (large scale opportunity) alike
Pre-existing customer base – Since online marketplaces are trusted by millions of customers worldwide, selling on the platforms translates to a readymade base of shoppers
Trusted platform – Platforms take additional care to ensure only trusted sellers are onboarded to help other sellers and customers, take care of customers fraud uses cases, and leverage billions/trillions of transactions
Easy setup – Verified third-party sellers can easily create their product listings and start selling a wide range of goods
Selling on a global scale – Sellers can have their target customer base anywhere in the world to start selling
Greater transparency – Sellers on a marketplace have better clarity concerning the pricing, availability, stock levels, and so on
Conveniences galore – It is easier for sellers to save with the operational issues being taken care of by the marketplace operators. They don't have to take ownership of steps such as warehousing or shipping
Quality assurance – Several marketplaces provide background and license checks, making the information available to the buyers. This helps build trust by offering quality assurance
Superlative experience – Since there is the provision to include newer categories on a marketplace, sellers can attract and convert more customers by offering them a better experience. Think of categories such as – most viewed, frequently brought, recently viewed, and so on
Multiple offers – Customers using an online marketplace enjoy special incentives and offers, including annual memberships
Uniqueness – Every online marketplace has a unique ecosystem complete with different listing fees and product categories
Innovations in Digital Marketplace Solutions
IBM’s 2020 U.S. Retail Index states that the COVID-19 pandemic has accelerated the shift to digital shopping by roughly five years. According to a PWC report, 88% of consumers are willing to pay for same-day or faster delivery.
These statistics highlight the need for constant innovation in online marketplace solutions. Here’s a glimpse of some significant existing/up and coming marketplace innovations:
Digital voice assistants are slated to rise to 8 billion active units by 2023. Today, it's a common practice for customers to use voice assistants to search and make online purchases. Marketplaces with voice search integration can help personalize the shopping experiences based on individual preferences by providing apt recommendations. It also helps reduce the screen interactions and time to check out with easy navigation. In addition, giving feedback also becomes easy for the users using voice technology instead of typing lengthy feedback or filling feedback forms.
Social media channels go beyond networking and have evolved into platforms for buying and selling. The best example is that of Facebook's marketplace and Instagram marketplace (launched in 2019). The latter allows companies and brands to sell products directly without even leaving the platform. What this innovative trend does is shorten the customer journey. Recently, Instagram announced that it is going to create a marketplace for influencer brand deals.
A noteworthy example is that of shoppable video ads, which we saw Ted Baker putting into practice. It makes buying almost instantaneous for the shoppers and leads to direct and immediate sales for the sellers.