When Amazon decided to sell products from other retailers, and not just from its own network of suppliers and publishers, it took a brave giant leap into the world of marketplaces. The shared platform strategy drove prices and margins down, but created a virtuous cycle that generated superior customer experience. Amazon’s operational and tech excellence gave it an edge to design and build new products and services which were differentiated, with strong market fit and sustainable profit margins.
Other innovative tech companies have also emerged to create platforms that disrupt and reinvent established business models and supply chains. Examples include Uber, AirBnb, eBay, Etsy, Game, Otto, Mercado Libre and many others. They create new opportunities for suppliers to access markets globally.
Marketplaces face a number of challenges, particularly for delivering quality services. Finding a common model that meets the needs of all participants in the target market requires careful attention to core factors. A shared platform if executed well, should establish common standards and rules that encourages information exchange, new behaviours, build and trust and drive repeat transactions.
There are no fixed rules or guidelines that can guarantee marketplace success, but attention to key principles will give you a stronger roadmap. Our experience makes us an excellent partner to define and deliver new marketplaces. Some of the factors we consider for successful outcomes:
- Vertical sector specialisation and not horizontal generalists
- Technology strategy, tools and execution excellence
- Organisational design and operational processes
- Agile transformation and customer centric governance
- Metrics and algorithms to drive competitive advantage
- Synergies and features to make cost of leaving high
- Leverage social media, viral referrals to drive high growth
Our focus is to turn marketplace ideas and challenges into real propositions and global business opportunities. Please contact us to discuss your goals and explore areas where we can collaborate.