Evolution of Marketplace Startups: What’s Next?
Digital technologies have turned our lives upside down. The number of services coming online is booming, and it shows no signs of stopping. Marketplace startups have been going through quite a number of transformations since they first appeared. Now, to succeed, modern marketplace platforms have to keep up with trends and provide exceptional customer experience. But wait. What should we expect next? Let’s take a look.
In comparison to the first online marketplaces, managed marketplaces are a big step forward. They aren’t just connecting buyers and sellers like the old-school marketplace platforms used to. They’re far more active and progressive.
The main features of a managed marketplace include:
- Quality guarantees
- Logistics services
- Price standardization
- Financial incentives
With that said, managed marketplaces make sure both the end-user and the service provider gets a better experience. Plus, they have data on their side to do it.
The way we use online services has changed over the last few years. From searching for a business provider in a listing to quickly booking an Airbnb accommodation online. Let’s have a gander at the four main generations of marketplace startups.
The Listings Era (the 1990s)
The first attempt to create an online marketplace looked more like a digital version of the Yellow Pages. However, the user was the one to check the provider’s credibility.
Then, Craigslist is another example of an unmanaged marketplace that combines all possible services. It’s pretty hard to navigate, and almost impossible to contact providers without moving off the platform. And again, while you can find any service you want, no one guarantees that the provider is legitimate.
The Craigslist Era (the 2000s)
It’s the time when companies started using Craiglist’s structure but offering some services and features tailored to a specific industry. As a result, the marketplace startups had a more or less organized structure, and the user experience has improved a lot.
Then, in 2005, a home services site called Angie’s List appeared. It had almost all the essential features, including reviews, certified providers and quote submissions. However, you could only discover the service and still had to communicate with the provider offline.
The “Uber for X” Era (2009-)
The mobile adoption spurred the appearance of new on-demand marketplaces. That’s when it became possible to accept a job or book a service by just pressing a few buttons. Famous companies such as Lyft and Uber belong to this era.
In a matter of time, we saw Uber X, Uber Pool, Uber Black, Uber XL. These types of marketplaces invaded our daily lives as service providers. Although a lot of startups failed, the ones that stayed continued improving their services.
The Managed Marketplace Era (the Mid-2010s)
Finally, we’re in the era of managed marketplaces that work really hard on creating trust between the provider and the end-user.
Opendoor and Honor are some of the most prominent examples. They tend to focus on solving more significant problems by providing high-quality and trustworthy services.
E-commerce is, by far, the leading global retail chain. However, cutting-edge technologies still give many more opportunities to drive innovations within the e-commerce industry. So, let’s take a look at the digital marketplace trends we should pay attention to.
High-end web apps and mobile design
The chance that the number of smartphone users will drop is meager. Every online marketplace has to have a top-notch mobile design and quality app development. Thus, mobile-first design creation and progressive web apps are certainly the way to go.
Personalization is one of the most important things that will rule the e-commerce industry in 2019. People like to feel cared for. With that in mind, marketplace startups should show them they do it on all parts of the customer journey.
Sophisticated software will help companies collect relevant data and use it to better engage with customers. As a result, buyers will become loyal to the platform that engages with them the most.
Thanks to AR, the lines between the physical and digital worlds are hard to notice. Buyers want to be able to try goods outside the stores and interact with AR. Thus, the marketplace platforms that can offer such services will be the one to succeed.
According to OC&C Strategy Consultants, by 2022, voice commerce will reach 40 billion USD sales in the USA alone. With that said, a modern marketplace should be optimized for the voice search.
AI and voice technology go hand in hand. It helps improve and provide a better customer experience. Artificial intelligence can also enhance the quality of pictures and recommend products that would match the buyer’s taste.
Not only the future of marketplace startups has great potential for the industry itself, but it also will open a lot of new service jobs. Unlike the marketplace platforms from previous eras, the new ones will make it possible to bring difficult services online.
For the most part, those will be regulated services in which providers have to hold government licenses or professional certifications. It might not be the easiest thing to do, but it will certainly take the digital industry to the next level.
A long time ago, no one believed they’d be cool with getting into a car with a complete stranger. Now, we do it every day by using various online taxi services. What’s waiting for us next? One can only imagine.
Today, managed marketplaces offer businesses unlimited possibilities for making money. That’s why services marketplaces jumped much further than goods marketplaces. From using Yellow Pages to finding a local business, to introducing AI and AR technologies to the industry, marketplace platforms are always evolving.
Thanks to data collection and high-end mobile-first designs, they create trust and offer hyper-personalized customer experience. In the future, online marketplaces will also unlock regulated products and make it easier to find licensed and qualified service providers.