October 10, 2018
The State (and Future) of Digital Marketplaces
As marketplaces across the globe continue to gain traction, many industry leaders are experiencing growing pains—things like payment processing, expanding to global markets, and battling against innovations of the competition. Let’s explore these topics in this month’s marketplace article roundup:
#Marketplace operators need to ensure that they are paying their sellers in a timely manner, via the methods that work best for them.Click to tweet
Today, almost a third of the global workforce participates in the gig economy in some capacity. In fact, 53% of gig workers don’t hold full-time jobs, and as many as 58% don’t want them. Although these workers turn to the gig economy as their primary source of income, 85% of gig workers also say that they would perform more gig tasks if they were paid faster.
Marketplace operators need to recognize that as they’re facilitating transactions between buyers and sellers, they can use technology to rapidly pay sellers, while collecting money from buyers separately.
Ultimately when it comes to payment processing, marketplace operators need to ensure that they provide sellers with multiple payment options so they can choose the option that works best with them, as opposed to being locked into a single method.
Although @Amazon has a significant grasp on the US markets, global expansion is going to be a significant challenge, given the fact that it’s not the only #marketplace in international markets.Click to tweet
E-commerce is predicted to grow to 13% of global retail sales by 2020. In 2017, 40% of all digital commerce sales went through a business embracing the marketplace model, compared to 23% in 2013. Those figures in mind, it makes sense that Amazon is now looking to capture a piece of the market by expanding into new regions.
Despite its status as a global leader, Amazon reported a $3 billion loss in its international business last year. Turning those numbers around isn’t going to be easy, especially considering how Walmart, MercadoLibre, and eBay, and numerous other businesses in the industry have established holds on commerce in the regions Amazon is targeting.
Although direct deposit is convenient for many, eliminating @PayPal as a payment method on @eBay will prevent many across the globe from getting paid.Click to tweet
In its efforts to optimize for sellers, eBay recently announced that it will start managing payments within its platform. Rather than sending payments through PayPal, buyers will instead complete their purchases without leaving eBay. In fact, PayPal will no longer be used for distributing payments either. Instead, eBay will make deposits to seller bank accounts.
Is this a mistake or a strategic move that will improve performance down the road? We would go as far as saying that it’s the former because eBay is in essence taking away flexibility from sellers. Although direct deposit is a convenience for many, bank accounts aren’t accessible to all sellers across the globe, making PayPal an essential part of transacting online.
In order to effectively compete against @Amazon, #marketplace operators such as @Etsy need to leverage #personalization and intelligent #messaging.Click to tweet
In an effort to expand its third-party offerings, and compete against marketplaces such as Etsy, Amazon recently announced its Storefronts functionality that enables shoppers to view more than 1 million items that are provided by 20,000 small-to-medium sized businesses across the U.S.
Considering how 38% of consumers first shop on Amazon when they consider purchasing goods, this arrangement only makes sense because they’ll leverage entirely new audiences. In order to effectively compete against Amazon, marketplace operators need to focus on being more than a place to purchase goods.
They need to become go-to destinations for buyers and sellers. This can be done in a variety of ways, one of which is leveraging intelligent messaging, which means enabling individualized/personalized experiences with the brand/seller on the marketplace. The benefit of these solutions is that it helps them stand apart from the competition.
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A Bi-Weekly Newsletter Focused Exclusively on Online Marketplaces