We can’t deny that 2020 hasn’t gone according to plan. It’s smashed through any notion of normality and has pushed companies all over the world to the very limit – in many different ways.
Yes, the events of 2020 have been a massive catalyst for change – particularly for online marketplaces, classified sites, and all kinds of digitally-native businesses. However, it’s not just companies that are changing. We’re also seeing a significant behavioral shift from customers.
It appears that a greater reliance on digital services is bringing about a need for more transparency and trust; as well as a desire for more personalized products and services. More accurate data is also helping to instill more empathy between customers and online vendors; and it appears as though quality is now more important than ever to shoppers.
Is this lasting change? How is it manifesting? How are online marketplaces and classified sites turning these challenges into opportunities? Let’s take a closer look at why empathy, personalization, and quality are just as highly prized by consumers as availability, cost, and convenience.
First let’s consider how things look from a technology standpoint. It’s clear that there has been a massive shift here too. The adoption of digital services rose by nearly a decade’s worth of growth in just a few short weeks – across retail, grocery shopping, deliveries, payments, and much more besides.
Now, we’d be remiss if we were to ignore the reasons behind this dramatic increase. It took place during peak lock down season. While the usual suspects (remember Amazon’s $11,000 per second earnings?) undoubtedly profited, so too did peer-to-peer orientated online marketplaces that were able to mobilize themselves in the right way.
But how were they able to do so? Competing with the likes of Amazon when it comes to cost, choice, and availability is seemingly impossible.
It seems that the challenges we collectively faced brought about a renewed focus in not only what we wanted as shoppers, but the way in which we perceived value.
Empathy is one thing that’s been in short supply for too long, but in recent years, it has started to permeate company and buyer behaviors in line with wider awareness of CSR (corporate social responsibility).
To the cynical shopper, corporate altruism is easy to pick holes in. But looking more closely at shopping trends, it’s clear that the initiatives being put in place by many online marketplaces and classified sites are largely customer-driven. In short, they make good business sense as well.
An Accenture report conducted in April 2020 shows that consumers are now taking health and environmental consideration into their shopping choices – with 45% of consumers saying they’re making more sustainable choices when shopping and will likely continue to do so.
Earlier this year we interviewed senior representatives from both eBay K (a dedicated Germany-focused classifieds version of the online platform) and Norwegian marketplace, Finn.no – both of which managed to grow during the pandemic by focusing on helping their communities.
Other digital companies with the capacity to be of broader service are adapting their business models too – at a time when overall demand for their original service has suffered setbacks.
Take ride-sharing app BlaBlaCar, which created a volunteer service during the pandemic – BlaBlaHelp – where drivers could sign up to help deliver groceries and medicine to those in need. Competitor mobility services could have elected to do the same, at a time when the entire transportation sector faced the same challenges, but didn’t.
The upshot is that the business was able to double down on the community aspect of its service – something that will no doubt continue to positively impact BlaBlaCar’s brand moving forward.
Ultimately empathy impacts loyalty: but it also has a positive impact on a company’s bottom line. A study conducted in 2016 on the link between empathy and profitability showed the top 10 empathy-driven companies increased in value more than twice as much as the bottom 10, and generated 50% more earnings.
Personalization Make A Play
Deeply understanding your customer’s journey – across all touch points – is also critical to ongoing success for online marketplaces. This understanding can be translated into personalization which in turn drives loyalty and conversions.
With all of the digital technology at our fingertips, personalization is nothing new to digitally-native businesses. In fact, it’s arguably one of the cornerstones of online commerce. After all, the more user data is available, the easier it becomes to provide and suggest products and services to customers based on their buyer behavior.
But why has this become of particular importance in 2020? Well, the more online retail options there are, the harder it becomes for shoppers to differentiate between similar products and services.
Competition for attention is fiercer than ever. But rather than simply bombard shoppers with yet more ads, companies are focusing on personalizing their overall customer experience – opting for attraction over interruption as their calling card.
For example, take Spotify’s Discover Weekly option – an algorithm-curated playlist based on user preferences – or app-based Atom Bank’s customization and naming options; even Starbucks’ much hackneyed practice of baristas scrawling customer names across their morning cup of coffee. When businesses – both digital and analogue – take the time to show that customers are more than just a dollar sign, they open the doors to more meaningful interactions.
The stats concur. According to a personalization development study, conducted by customer optimization experts, Monetate, 93% of companies with an “advanced personalization strategy” saw revenue growth. Similarly, companies that spent at least 20% of their marketing budget on personaliszation saw double the amount of ROI (return on investment).
The study shows that personalization has a positive impact on loyalty too – which will become more essential as companies that have experienced growth look to maintain their new customers.
In a similar way to how digital businesses are personalizing their customer experiences, more and more online marketplaces are focusing on improving the quality of their overall digital offering.
With potentially more customers coming to different sites, the need for a welcoming, user-friendly experience is crucial. If a site or marketplace is difficult to navigate, doesn’t offer different languages or even accessibility options, companies could be losing out on much needed revenue.
After all, if customers can’t find what they’re looking for, they have plenty of other options out there. However, this need for better quality extends to the actual products on offer too.
The ‘finding discounts strategy’ many shoppers have favored in the past has been replaced by a search for the ‘best possible option’. This is true across many different categories – from electrical goods to cars and furniture purchases, according to a survey carried out by First Insights.
The study shows that up to 98% of shoppers (at least where furniture is concerned) stated that price had no bearing on their purchase decisions.
But what does this all tell us? Well, if price has less impact than quality, then it’s clear that online marketplace and classified sites that specialize in particular niche should look more closely at their customer group’s needs and provide a product range and customer experience that matches higher expectations.
Building Long-Term Trust Is Crucial
All things considered, although many businesses face an uncertain future, as more shopping and interaction takes place remotely, there’s never been a better time to be an online marketplace or classifieds site.
To truly thrive however, companies need to continually focus on customers needs and to work on building communities rather than empires. Trust is more important than ever before. Which is why, among other things, online content moderation should be a priority for sites that rely on user-generated content.
Knowing that a site or marketplace is a safe, well-maintained place to transact will become even more important. This not only reassures customers your site is safe, it’s a broader indication that you genuinely care about your community and that you’re committed to providing the best possible user experience and that you understand why these things are important to your customers.
The pandemic will hopefully prove to be a short-term concern. But there are a lot of long-term lessons we can learn from how businesses and consumers are behaving. The challenge now is to commit to implementing the positive ones here and now. For everyone’s sake.
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