What online marketplace trends are we going to see in 2020? Here’s what 8 industry experts predict for the coming year.
2019 is quickly coming to an end, and what an exciting year it has been for online marketplaces!
Marketplaces have been disrupting the way we shop with the rise of the conscious consumer looking for more ways to be sustainable.
As users’ expectations grow and user experience has become highly prioritized, marketplaces have been creative in finding ways to add value and services to their platforms. Convenience has been the keyword for online marketplaces to acquire and retain their customers.
Which trends will shape the marketplace industry in 2020? What can you expect to change in the online marketplace industry in the coming year? We gathered eight predictions from marketplace experts and professionals to see what’s coming up in the industry.
Classified sites and marketplaces face ongoing disruption: transactional models, metasearch and aggregation competitors, programmatic advertising, IBuying in property, and more. It doesn’t matter if you’re an automotive, property, recruitment or general site — you face changes and challenges.
As Bill Gates said: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.”
In 2020, we’ll see more exploration of new business models, research and development, investments in tech initiatives and tech businesses, and acquisitions. Consolidation and spinoffs are likely.
Marketplace and classified sites will spend time and money trying to figure out what’s next, and how to participate.
The biggest challenge may be to spend just enough to learn what’s necessary; implement services and tools to increase revenue and position for the future, but avoid overcommitting.
Jonathan Turpin, Principal, AIM Group
In 2020, I expect to see continued global expansion of regulations that restrict or prohibit problematic user-generated content in ways that cannot be effectively implemented by the regulated services. To respond to these impossible regulations, services will turn off or curtail their user-generated content functionality. In its place, some services will migrate towards offering professionally-produced content to readers. To fund that professionally-produced content, the services will institute paywalls. Thus, 2020 will see a continued broad retrenchment of UGC, which will be partially replaced by an expansion of paywalled content databases.
Eric Goldman, Professor, Santa Clara University School of Law, Co-Director, High Tech Law Institute & Supervisor, Privacy Law Certificate
The recent overhyped technology revolutions (VR/AR, AI, chatbots, crypto) haven’t quite panned out the way many had expected and I don’t expect anything revolutionary in 2020.
On the other hand, the technologies are steadily evolving – and so is the marketplace industry. We see new and exciting marketplaces being built all over the world and I expect this trend to continue.
Here are a few things I’m looking forward to in 2020:
1. Marketplaces are getting more complex from the operational perspective. Simple Craigslist-style platforms are in the past (and have been for quite a while) and the users expect much more from marketplaces today than they did even a few years ago. More features, powerful automation, better algorithms across the board.
2. The omnichannelization of ecommerce continues. The competition and the alternative sales channels aren’t going anywhere and marketplaces will need to plan for it. This may mean setting yourself apart or embracing the alternatives and offering your vendors a convenient cross-platform selling toolset.
3. More B2B marketplaces overall. The B2C space is where all the hype’s and the space has been pretty crowded, but there are many more untapped opportunities in B2B. We’ll be seeing more B2B platforms emerge in 2020.
4. Smaller payment processors consolidating and getting into marketplace payments. The payment processing industry has been hyper-competitive for quite a while now, but the platform payment space is still relatively open, especially on a regional level where the large marketplace processors like Stripe aren’t yet available.
Martin Boss, Founder, MultiMerch systems
In 2019, more than 20,000 people have reached out to Sharetribe to create their own online marketplace. We’re seeing increasing demand for service marketplaces for highly skilled workers. A particularly interesting trend in this area are B2B service marketplaces focusing on extremely specific industries. A good recent example of a highly successful unicorn in this field is RigUp, an Austin-based marketplace for on-demand services and skilled labor in the energy industry, which recently raised a $300 million Series D round led by Andreessen Horowitz. Some of Sharetribe’s customers are working on concepts like matching information security specialists with big companies or making it easy for construction companies to make their staff available for other construction companies while they are between projects. There are tons of industries that rely heavily on contractors who are highly skilled in very specific tasks. Marketplaces can provide lots of value in these industries by aggregating and verifying these contractors and making it easy for companies to access this pool of talent.
Juho Makkonen, co-founder and CEO, Sharetribe
As users’ expectations keep on moving ahead of what marketplaces have traditionally been able to offer, users these days anticipate to be able to instantly spot what they’re looking for in one, convenient click.
Marketplaces will need to ensure a smooth and seamless user experience across their platforms to satisfy users. That implies providing value-added services, improve user safety and deliver a highly user-friendly experience.
I expect to keep on witnessing niche verticals and regional players popping up to compete with the more established platforms answering more specific needs to personalize their platforms.
Finally, the rise of a more conscious consumerism as an aftermath of the ecological crisis is a vast opportunity for marketplaces to take on to continuously expand.
Patrik Frisk, CEO Besedo
2019 was the year which saw the rise of truly global change in a way how we think and behave, mainly because of ecological crisis topic getting a significant traction. There is a new & growing generation of people who prefer “share” and “re-use” instead of “buy new”. At the same time, this same generation is completely online, from their birth. Online is their natural habitat.
These are the main reasons contributing to continuous growth of digital marketplaces, which we will see in 2020. Growth in terms of visitors, goods offered and transactions performed.
However, those “born to be online” visitors will not accept any failure in user experience. On the contrary, they expect the web (or an app) to match their nature and provide multimode (text, voice, image) seamless and (most importantly) personalized search and product discovery experience.
Be ready, work on these topics if you do not want to see these new visitors to bounce elsewhere.
Co-founder & CPO at Luigi’s Box
With the marketplace battlefield quickly shifting from desktop to mobile, fluid and mobile-optimized UX is already a dominant trend and will only strengthen in the following year. Millennials and Gen-Z generations are now used to the paradigm of “Now or Never”. They expect to get a taxi, watch a film, or buy stuff online almost instantaneously. This puts a heavy emphasis on an optimal mobile interface.
Classifieds and marketplaces have, ever since the dawn of the Internet, been relying on the text and filter search as the primary search mechanisms. Cluttered mobile screens and small keyboards frustrate users. This is bound to change as the AI-based technologies are quickly gaining track.
AI-powered Visual Search & Browsing, Visual Recommending, and Automatic Image Tagging simplify and speed up the ad search for users, as well as enrich the content and make standard search tools more effective. The bottlenecked mobile search is looking at a complete transformation where instead of text, the image or even video becomes the dominant way of the website navigation.
Marketplaces that manage to implement AI solutions in the right way are seeing large improvements in user engagement, matchmaking between sellers and buyers, while at the same time increase the time-on-site and number of ads viewed. Implementing AI technologies is not an easy task, but if done right, the pay-off is immediate.
Co-founder & CEO at Velebit AI
Last year I said that 2019, in terms of the online real estate market would be as action packed as the finale of Game of Thrones. Little did I know how right I would be in that analogy. 2019 turned out to be simply… more of the same. Most of the trends started in 2018 simply grew to the next level in 2019 when most players accepted that those are the things to focus on.
- The loud trends for “big data” settled down and presentations about the endless possibilities of big data mining grew into discussions about how hard it is to consistently collect and keep data relevant, before one could turn it into usable insights or revenue.
- Verticalisation continued, as big players continued to either purchase or launch their own verticals. Predominantly in the car space but real estate is coming more and more on the radar. A lot of attention was devoted to the new home segment too.
- The discussion about the potential movement into transactions moved from “discussion” to “action phase”. Most players seem to realize that there is no “if”. The discussions of whether transactional marketplaces in real estate are the future. That question seems to have earned its answer. The outstanding questions remained:
- How? Is the fixed fee broker or ibuyer the answer? Or any other models?
- Who? Can anyone emerge who will be able to deliver a transactional model repeatedly on multiple markets? So far Purplebricks launched ahead and seemed to hit an international wall which forced it to step back. Who will be able to repeat transactions on multiple markets is yet to be seen.
- I mentioned a trend in which classifieds seem to realize that they need to be distributors of traffic to verticals, rather than destinations in themselves. That trend seems to continue with a number of players seemingly realizing – it’s easier said than done. Redistributing the traffic requires in-depth knowledge about the user which represents that traffic – and that – is not always the case in businesses which never before needed to know who’s behind that click. This realization seems to drive another wave of “data collection” projects among the big players with a lot of traffic.
Nevertheless – I believe 2019 was a very interesting year with a lot of developments. Maybe they weren’t too loud, mostly under the surface not yet visible to end-users. But they are going on – and the battle for the dominance of the transactional online real estate space is only beginning. Stay tuned…