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2020 was a year no one could’ve predicted. E-shopping has been accelerated by years and a whole new segment of customers has been forced online.
Meanwhile, marketplaces have had to deal with new unpredictable moderation challenges as illustrated very poignantly by the spike on this google trends graph showing the past years’ search volumes for facemasks.
The entire world has had to get used to a market that was very volatile and extremely sensitive to any new development in the pandemic, good as well as bad.
Now however, at the end of 2020, there’s light at the end of the tunnel. The vaccine is finally within reach and hopefully social distancing and face masks will soon be a curious terms in a bizarre chapter of our history books.
A return to “normality” will, however, not erase the incredible jump the world has done towards a fully digitized society.
What will the new world order mean for marketplaces going forward? What can eCommerce, sharing economy and online platforms in general expect from 2021?
We’ve asked 8 industry experts to give their trend prediction for the new year.
“The Coronavirus pandemic has forced marketplaces to adapt almost instantaneously in some cases. When traffic collapsed, some companies extended listings and dropped their fees. Others launched new products to bring them closer to their customers or users.
After the initial shock in Q2, horizontals are setting records in listings and growth again in traffic. Many auto sites have rebounded quickly, and are seeing a V-shaped recovery. In real estate, there’s a move toward transactions, especially in rentals. Recruitment sites have been hit hardest and face an uphill battle.
The AIM Group is seeing a lot of new digital marketplaces launch. While many are focusing on b-to-b, verticals are evolving fast as well.
Manufacturers are offering used-car marketplaces, and digital dealers like Carvana and Cazoo are threatening traditional dealerships and marketplaces. Reducing friction and supporting transactions is a must in real estate, especially in the rental field. Recruitment is using AI and better networking tools to improve. And horizontals are fast moving into all aspects of transactions: payment, escrow, delivery, and new e-commerce tools.
Marketplaces need to evolve. Quickly. Payment, finance, insurance, delivery, and other consumer-focused services are becoming critical elements of a full-service marketplace. The pandemic is accelerating digitization to a previously unimaginable extent. And those who focus on the pain points of their customers will win.”
Katja Riefler, Principal, Managing Director, AimGroup
What challenges will the marketplace industry face in 2021 and how can they solve them?
The biggest problem for marketplaces in 2021, during the pandemic and in the likely economic downturn, will be to convert people who have a longer research/browsing period than before. People might have the intent to buy, but priorities and financial pressure might postpone those purchases.
If your product can be replaced by other options, the increased research period will increase the risk of losing customers.
There are a number of things you can do to overcome this challenge. For instance: Offer delayed payment. Offer additional value, 3 for the price of 2, increase or establish referral commissions, lower the price on your main product and compensate by selling more to same customer later, create a community between buyers etc.
What technology will be a must in 2021 and why?
People have more options and less time to look at each, so things need to be fast and they need to work. There will need to be a higher focus on AI and new ways of discovering the right products. Nail the complete user-journey, not just the product sold.
What opportunities will there be in 2021 and what mindset or approach will companies need to benefit from them?
Building companies will be easier and faster for everyone, so find ways to stay agile and test out many things as you go. The world is constantly changing so your way of doing business must always be challenged and optimized before you are forced to change by your competitors. – Digitizing something analog is not enough anymore, we need to find new ways of doing business, ways that weren’t previously possible. Creating new ways of doing business between parties will win the new age of companies.
What could be a potential game changer in 2021 for the marketplace industry?
International payments have always been hard to pull off, but I believe some players are now working very hard to capture this market. – Adding guarantees and insurance when selling products and services could also add trust to a marketplace, and I foresee some players become successful doing this.
Daniel Beck, Co-founder & CEO at Coliving
What challenges will the marketplace industry face in 2021 and how can they solve them?
Let’s hope 2021 won’t be as challenging as 2020 for businesses in general. Marketplaces haven’t had as hard a time as many though – a lot of them didn’t have a ‘bricks and mortar’ element to their structure anyway, and technology is embedded, which came in handy in a year where everything went online overnight.
However, in 2021, marketplaces will now be competing with traditional businesses who were forced to finally innovate during the pandemic. There also might be a degree of a return to normality, which they will need to brace themselves for too. But the good news is, a lot of the advancements and changes in behavior we’ve seen in the last year that benefit the marketplace industry will never be undone.
What technology will be a must in 2021 and why?
Fraudsters had a bumper year in 2020 with many people inexperienced with online transactions being forced to shop, work and enjoy their leisure time online. Anti-fraud technology has always been advisable, in 2021 it will be a must.
What opportunities will there be in 2021 and what mindset or approach will companies need to benefit from them?
It’s as though everything has been thrown up in the air and we’re waiting to see where it lands. But wherever things do land, the marketplaces that will benefit – and in many cases survive – will not be the ‘fittest’ as many people say when they misquote Darwin, but the most “able best to adapt and adjust to the changing environment”. That’s the mindset that’s important: not being tied to a company, a name, a URL – but a purpose, and because of that being able to be more agile.
What could be a potential game changer in 2021 for the marketplace industry?
The same game changer for all of us – a vaccine. And that’s suddenly, at the end of 2020 looking a lot more likely. Hopefully we will be able to look back and see 2020 as a dark cloud, but one which had a silver lining. For marketplaces, that silver lining is rapid, mass adoption of digital technology. We’ve moved years in months, so from now on, it’s only going to get more interesting.
Elle Tucker, Sharing and Gig Economy Consultant
Thanks to technology and digitalization we have come seven years in seven months during the current pandemic. People are more comfortable working remotely and in virtual teams. The world of work has changed and the status quo ante which saw people crowding into city centers between 9am and 5pm every day is not coming back. Both employers and employees are demanding more flexibility and all the tools are there to make it possible. The genie is not going back into the bottle.
At the same time, physical meetings will take on even more importance and value as we exit the current COVID-19 crisis.
Companies who have managed to focus on what customers really need, while stripping away unnecessary bureaucracy, personnel and costs will be the winners as we enter the new year. 2021 will see the growth of the project economy: organizations will hire the specific skills that they need in order to carry out specific – often time limited – jobs. At the same time, automation will pose an increasing threat to those who do not have the knowledge, flexibility or abilities to navigate the new landscape.
Glen Hodgson, Secretary General, Plattformsföretagen and CEO, Free Trade Europa
COVID-19 has accelerated digitalization levels by years. As a result, there has been an influx of new marketplace users. The new users can particularly be found among an older demographic and in emerging markets.
Within this group, there’s overall a very low level of tech comprehension which means we have seen an increase in vulnerable internet users who are exposed to potential fraud and abuse. Keeping this user group safe is a challenge that will continue far into 2021 and beyond.
Additionally, it will take time before the COVID-19 vaccine has reached high penetration. This means that there will be a continued risk for various fraudulent offers around medical protection and treatments.
Even with a vaccine, it will take time for the hospitality industry to recover. As such Marketplaces with a high focus on travel and holiday homes could still face large challenges and will need to think creatively to push through until the world returns to “business as usual”.
In 2021 we’ll continue to see a convergence between B2C and B2B. Unfortunately, many marketplaces mistakenly think that B2B is risk-free and does not face trust and safety issues. This is not at all the case and to be successful platforms will need to put measures in place to safeguard their users in this space as well.
In the past years, we’ve seen automated text automation is becoming quite widespread.
In 2021 I predict Image automation will be used by more and more Marketplaces in various verticals. We will even see an uptick in the requirement for automated video moderation as video becomes an even bigger factor when selling on marketplaces.
2021 will continue to be challenging to many businesses, but there’s also a range of opportunities for agile companies who dare to move fast.
Young demographics are trending towards a more sustainable approach in their consumer behavior benefiting many marketplaces and sharing economy ventures. Also offering and integrating payments and delivery services is becoming a hygiene factor. Finally, including various insurances and guarantees in your service offerings is becoming more common (for used cars for instance).
Additionally, short video is trending strongly in popularity among young consumers. This could have a huge impact on parts of the industry opening up new opportunities, but also triggering many new trust and safety concerns.
How will you ensure that videos are appropriate, accurate and of the quality you need?
Petter Nylander, CEO at Besedo
In 2021, one of the biggest challenges the marketplace industry will continue facing is how to deal with the implications of COVID-19. On the other hand, this new world order also presents tremendous new opportunities for marketplaces. Can services earlier offered offline be brought online instead? Can innovations be made in delivery? What kind of previously neglected opportunities are there in domestic (or even virtual) travel? And so on.
Technology solving these dilemmas will be a must in 2021. This means integrations to solutions like video conferencing tools and new delivery options. However, the most significant opportunities likely lie in business model innovation.
Juho Makkonen, Founder of Sharetribe
What challenges will the marketplace industry face in 2021 and how can they solve them?
As the entire ecommerce industry is re-inventing itself for a post-COVID reality, we are likely to see both challenges and opportunities emerge. In our experience, the defining challenge shall be the industry’s approach to the development of authentic customer experiences. This will touch on both the principles of service (and how to manage communication at scale) and that of personalization (and how to build trust and value from vast datasets). The solution to these challenges is to blend the capabilities of technologies (such as the adoption of AI) with an agile business mentality which is willing to experiment and innovate.
What technology will be a must in 2021 and why?
Technology is a tool. In 2021 it will be a ‘must’ to have a resilient mindset, a set of nimble processes, and technology that will allow the business to reduce operating expenditure whilst improving customer experience across multiple touch points. Artificial Intelligence will allow marketplaces to personalize the shopping experience but also to offer unique services such as conversational shopping and support. Increasingly, AI will help marketplaces predict behavior and take better, data-led decisions on pricing, stock and customer targeting.
What opportunities will there be in 2021 and what mindset or approach will companies need to benefit from them?
The biggest opportunity in 2021 will be to use big data sets from the marketplace to continuously improve and evolve the marketplace itself. This will happen in two ways: (a) autonomously by having AI processes which re-build, re-price, re-target and re-organize stores based on real-time trends, and (b) manually, by providing new levels of data insights to management teams who can now take more informed decisions to improve their offering.
What could be a potential game changer in 2021 for the marketplace industry?
The marketplace of tomorrow will be AI led. It will offer customer-centric search results that are personalized on the fly. It will retarget potential customers interested in the products for sale and create a more efficient sales process. It will ensure that all conversational communication is personalized and is constant across multiple channels and devices. The latter will be led by Virtual Agents who will curate the shopping experience and serve the customer without human interaction in 60% of the time.
Dr. Gege Gatt, CEO at EBO
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