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The restrictions put in place to combat the global Covid-19 pandemic have had a devastating effect on many businesses. Social distancing, restrictions on physical services, and a downturn in spending have also hurt most marketplaces and sharing economy sites despite their digital nature.
After months of closed-down societies and harsh restrictions, nations are slowly and carefully opening up again, but the world is forever changed. Businesses that understand and adapt quickly to the new reality will be successful. To do so, they’ll need to understand the challenges and opportunities arising in the post-corona business landscape.
We’ve asked 8 online marketplace experts to share their thoughts and predictions to help you prepare and adapt to the new reality.
Peter Zollman, Founding Principal, AimGroup
What challenges do you see for the marketplace industry once the Corona-related restrictions are lifted?
The marketplace industry is changed forever. It will probably take several years for listings and revenues to recover, and many marketplaces will go out of business, merge or acquire others. A “new normal” will evolve, with more delivery and contactless options for sales.
High-tech tools like chatbots, 3D and virtual home tours, artificial intelligence, applicant tracking, and matching systems, and transaction capabilities will become essential. All marketplaces will broaden their revenue streams through the addition of ancillary services like education (recruitment marketplaces), transaction technology (real estate and automotive), and delivery/escrow services (general goods).
The next few months and years will be painful for every marketplace, but the smartest will rebound effectively and come through successfully.
What opportunities do you think the Corona crisis has created for marketplace professionals?
Marketplace professionals are in a difficult situation for the short term, but people will always need to buy or sell a car, locate a place to live, find employees or new work (even in tough times), and buy or sell products and used goods.
So marketplaces will survive and ultimately thrive. Outstanding technology workers, sales representatives, and excellent management will always be in demand, even if those needs “pause” momentarily while the pandemic is addressed.
Have you taken any steps, or do you have any recommendations on how to decrease the impact should we find ourselves in a similar situation in the future?
As with any business, marketplaces must manage their cash and expenses wisely and make sure they put their customers — and their customers’ customers — first. Especially during downturns. Solving problems, matching buyers and sellers, improving processes, and delivering quality employees is an important needs that will never go out of fashion. Treat your employees with dignity and respect, and you won’t go wrong there, either.
Elle Tucker, Ganghut, and Marketplace Risk
What challenges do you see for the online marketplace industry once the Corona-related restrictions are lifted?
Online marketplaces are so diverse I think the challenges will be very sector specific. For example, marketplaces relating to travel might be hard hit because a new normal post-crisis is likely to mean less international travel… while, for example, gig-economy marketplaces that focus on online teaching or mentoring could find that increased uptake during social distancing has allowed their platform to flourish after restrictions lift.
What opportunities do you think the Corona crisis has created for online marketplaces?
I think the main opportunity will come from a significant behavioral change that has been forced to take place. Marketplaces founders could never have envisaged a sudden mass adoption of, for example, delivery apps. People who have never previously considered a marketplace transaction have done it suddenly, out of necessity.
Those previously resistant to or ignorant of platforms have realized that technology can connect us when we can’t interact in person – that’s huge. And there’s no undoing it, either.
Have you taken any steps, or do you have any recommendations on how to decrease the impact should we find ourselves in a similar situation in the future?
The marketplaces we have seen struggling in this crisis are the ones that haven’t thought on their feet. Being agile has helped many startups in this space adapt, expand or pivot their model to one that works in the crisis, and will continue to work beyond it.
I would say always be ready to act quickly and be creative. You can’t spend too long thinking about something at times like this, and you can’t be too precious about your original concept – it just might not work anymore in these changing times.
Juho Makkonen, CEO, Sharetribe
What challenges do you see for the online marketplace industry once the Corona related restrictions are lifted?
The economy will be in a downturn for a while, which naturally impacts marketplace businesses long after restrictions are lifted. That being said, the post-COVID world also offers lots of new opportunities for marketplace businesses.
We’ve already seen many customers of ours starting to offer virtual or remote services of various kinds. The demand for these will certainly keep increasing. We recently published an article for tips that help marketplace founders survive a period like this.
Alok Alström, CEO, AppJobs
What challenges do you see for the marketplace industry once the Corona related restrictions are lifted?
Based on numbers from the AppJobs Institute, we know that there are shifts in demand on certain services which leaves many gig workers without any income. Within the gig economy the coronavirus has caused an increase in demand for delivery services since more people want food and other commodities delivered to their homes. On the other hand, people travel less and are spending time home, decreasing the demand for example drivers and dog walkers/pet sitters.
The gig economy will probably grow even more as people are getting unemployed which creates a need for jobs that are easy to join, and I believe AppJobs will have an important part to play in that transformation.
What opportunities do you think the Corona crisis has created for marketplace professionals?
As more people get used to working remotely, companies will be able to scale up their businesses faster and increase their productivity.
Have you taken any steps to or do you have any recommendations on how to decrease the impact should we find ourselves in a similar situation in the future?
One of the most important things that we try to build at AppJobs, and which I think
will become crucial for all companies to develop, is the ability to adapt. Adapting requires speed, agility and confidence that everyone can contribute with new ideas and methods no matter your current position in the company.
Right now, AppJobs is adapting to the new challenges our members and partners meet by developing new services on our platform. We will introduce AppJobs Top-up program and AppJobs Covid-19 that adds financial rewards to members who help other members through our platform, and ease the transfer for people becoming freelancers and focus on work they can do remotely no matter their current location.
Manfredi Sassoli, Growth Expert, manfredisassoli.com
What challenges do you see for the online marketplace industry once the Corona related restrictions are lifted?
First of all I don’t think we are going back to normality and that is for two reasons: health concerns and related restrictions on public gatherings and travel and because of the economic climate. This means that where delivery is necessary it will remain a challenge, and the same where people require to meet in person e.g. some services. Travel of course will be badly hit as will certain categories that specialize in aspirational products.
International projects will be made logistically more challenging.
Apart from that I think that the key challenge will be around people management and mental health. People’s lives and routines are being disrupted for months on end, plus there is a threat of a second wave coming in the fall and economic downturn.
Gyms, bars, and clubs may remain shut for a while, giving people few options for release. Living in London I know many people like to travel abroad in the summer, that may not be possible. Overall it’s not a merry time – any employer, not just marketplaces, will risk having a spent workforce. Creativity may suffer.
What opportunities do you think the Corona crisis has created for online marketplaces?
The ones who are really suffering from all this unfortunately are all the gig economy workers: with no gigs they have no income. This pandemic has also shown the fallacies in some of the current models. This is also an opportunity for a new breed of company, one that cares about the workers: such firms will attract workforce like no other.
Here comes the good news, there are actually plenty of opportunities ahead.
A few weeks back I decided to re-read “The world in 2020 by the Economist” and “The Wired world in 2020”, curious to see how wrong they were. While some things simply could not happen, I was surprised to see how many trends were still accurate and had in fact accelerated: (e.g. emote working, collaboration in medical research, the penetration of online gaming, changes in habits around food).
Personally I’d like to think that the opportunities for marketplaces and platforms are almost boundaryless at the moment.
First of all, thanks to their digital nature, most marketplaces are well positioned to gain market share from the physical constraints that this pandemic has caused. Think eBay and Amazon, but also Deliveroo and Netflix.
A negative economic climate may make people more money conscious, this makes people more adventurous in their decision making – they will be more willing to try new products in the name of cost savings. It is no coincidence AirBnB was founded just before the 2008 recession. That made people more incline to try something different to a hotel, (but cheaper).
Trying a new product is always a risk. Marketplaces often deliver value to people who are happy with the trade-off of higher risk (of a negative experience) vs cost savings.
There will also be other significant shifts in consumer behavior. For example: how will people meet? Beyond the current lockdown there will be a time of limited social interactions, followed by a time with more home-working. Meeting people will become harder. How will dating be affected? If there are no conferences and events, how will networking be affected? (An online webinar does not solve that).
From a workforce prospective opportunities are huge. If business is good Tech companies should be able to access more talent than ever and as remote working becomes the norm, firms won’t be restricted by location. The opportunity is to hire the best talent from all over the world and create a remote and decentralized workforce.
Have you taken any steps to or do you have any recommendations on how to decrease the impact should we find ourselves in a similar situation in the future?
Currently I am working with a Finnish company, launching an edTech platform in South Africa. This arrangement was made before this crisis, but the impact of Corona on my work has been none. A remote and distributed workforce will give more flexibility and resilience. Creating a company culture for a remote workforce poses its own set of challenges, but there are big wins to be had for those who get it right.
As no two crisis are ever alike, we must also prepare for the next one. This virus has shown us how connected we are – nowhere are we more connected than in the digital world – so imagine the havoc a widespread digital virus could have. I would say cybersecurity is another area we need to be very mindful of.
Tom Clementson, Head of Marketplaces and Fintech, Vacuumlabs
What challenges and opportunities do you see for the online marketplace industry once the Corona related restrictions are lifted?
Covid-19 has brought being in touch via technology to everyone, everywhere – and if there’s one thing marketplaces can capitalise on, its community.
Things would have been very different in this crisis ten-years ago. Today, most marketplaces don’t carry stock, or own any inventory, instead they enable the discovery and connection of buyers and sellers.
This means the ‘supply chain’ is in part made of millions of small businesses across services, food, retail and every sector you can think of, making the impact on individuals (your suppliers and buyers) very easy to see.
I think all business, and society, will need to look again at what really matters, and that’s got to focus on community, health, education and the environment.
Of course, there are business opportunities selling masks and delivering craft beer, but businesses who solve problems in health and education right now will be able to contribute to something good for us all, and make some money along the way.
Have you taken any steps to or do you have any recommendations on how to decrease the impact should we find ourselves in a similar situation in the future?
Here at Vacuumlabs we are a globally headquartered business with a team spread across the world, we also provide hundreds of developers, engineers and designers to businesses working remotely.
This means we were a little more prepared than most and we had a lot of tools and processes in place.
I think businesses need to make sure they have a rainy-day fund, the majority of business and individuals, of all sizes, only have a few months runway at best. We’ve seen how fragile ‘just-in-time’ supply chains can be, and this will happen again.
Tom Squire, Group Commercial Officer, Shieldpay
What challenges do you see for the online marketplace industry once the Corona related restrictions are lifted?
There isn’t necessarily a huge challenge for businesses that are already fully operational online. If anything, it’s the brick and mortar stores that will struggle to return to what was considered normality. The convenience of buying or selling online, combined with new health considerations, presents a huge opportunity for them.
What opportunities do you think the Corona crisis has created for online marketplaces?
With online being one of the only viable options during this time, opportunity has presented itself for online marketplaces to ramp up operations. Coronavirus has also accelerated digitalisation across the board for both businesses and their customers. Those who haven’t prioritised online have the opportunity to focus on this and provide solutions that break down traditional barriers to trading and unlock new revenue streams, such as geography and alternative payment methods.
Have you taken any steps to or do you have any recommendations on how to decrease the impact should we find ourselves in a similar situation in the future?
When crisis hits, businesses very quickly need to find new ways to operate to mitigate the impact. Being in tech, having an out of the box product solution for customers that can be adopted overnight and allow them to adapt to new environments is crucial.
Petter Nylander, CEO, Besedo
What challenges do you see for the online marketplace industry once the Corona related restrictions are lifted?
The world has changed dramatically as an effect of the pandemic. Millions are risking their jobs, the global economy is hurting badly and optimism has turned to negativism and risk.
Experts points to a recession being unavoidable and that will also impact marketplaces. Each individual marketplace will be affected differently though depending on target audience, segment and what steps they have taken during and immediately after the crisis to mitigate the damage.
Marketplaces who help their sellers through the crisis and enable buyers to continue purchasing while adhering to social distancing will have an easier time recovering than those who have not taken such steps.
What opportunities do you think the Corona crisis has created for online marketplaces?
The pandemic has created a unique situations where tech adaptation has been accelerated to a degree that would’ve been unthinkable just half a year ago.
People who’ve never touched a computer have been forced online to connect with friends and family and to buy essentials. The result is access to a huge new audience and an expansion of the market that would otherwise have taken years if not decades. It’s important to keep in mind though, that many of those forced online are more or less digitally illiterate and many are likely skeptical of the “new” way of transacting. To convert them, it is paramount that we ensure a smooth and positive first encounter with the online world. They will require a lot of support and additional safekeeping, but if we succeed, there’s a whole new segment of users to fuel the marketplace industry.
A lot of new services that will help the marketplace industry flourish will also arise from the pandemic. Peer to peer delivery services will evolve as people utilize them more and AR/VR showrooms for cars, real estate and other similar products will become more commonplace as people adapt it right now out of necessity.
I predict that innovation within the marketplace industry will shoot through the roof over the next couple of years because of Covid-19, the restrictions it has caused and the realization that it could happen again.
Have you taken any steps to or do you have any recommendations on how to decrease the impact should we find ourselves in a similar situation in the future?
Support your users (both buyers and sellers) as much as you can throughout the crisis. If you can waive fees for your sellers to keep them live on your site, you’ll not only gain goodwill, but also ensure that your site continues to look healthy and active.
Make sure your company can easily scale up and down to make it more resilient against unexpected revenue drops. Have a solid structure and policy in place that supports work from home and allow you to switch quickly.
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