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Telecommunications, Media & Technology
Welcome to Marketplaces: The Next Evolution in E-Commerce

The world of online commerce continues to change after several progressions in recent years. First, most direct-to-consumer brands created an electronic storefront where they could sell products online. Next came the emergence of master marketplaces like Amazon, where customers could explore products and buy from a variety of brands in one place. Soon to follow was the onset of more comprehensive e-commerce where brands aren’t just selling products, they are selling a lifestyle or add-on experiences that supplement products.  

Now we are beginning the next wave of e-commerce: Marketplaces. Traditional D2C e-commerce sites today typically only sell that brand's specific products. And if that site sells other products, those products might be featured as part of an upsell opportunity. In a marketplace experience, a brand could curate what other brands appear on the marketplace, but all products are given equal footing. When this ecosystem of brands comes together, they sell not just as a package, but in the same place. 

When customers buy from a connected ecosystem of brands, they cut through the clutter of overwhelming choices and feel confident that the products they choose will work together with products from other parts of their ecosystem. Businesses gain access to the lifeblood of consumer experiences: data. 

Why now for marketplaces?

Data delivers a competitive advantage in today’s saturated e-commerce marketplace. It allows brands to personalize experiences, target offers and better understand consumer behavior. When brands join forces in a marketplace, they have exponential access to valuable data that can be used to attract new customers, cross-sell and ultimately increase sales. 

Consider the value to customers that want to find compatible products at the best price and in the shortest amount of time. 

Take for instance, a customer looking for home security solutions. In the past, a company would only push its products. This causes more friction for shoppers who must go to multiple sites to get the full suite of solutions they need. In a marketplace, the customer could access a home security system, video cameras, locks for doors and other products that work together.  

Google is among the companies taking advantages of a marketplace approach. By launching the Matter standard in collaboration with Apple, Amazon and others will allow users to connect all enabled devices to Google Home. The company will soon sync lightbulbs and smart plugs with Android and Nest devices. This gives them the opportunity to launch a Google Home marketplace with products that consumers will be confident interoperate and work together seamlessly.

Marketplace experiences have found their place within the consumer technology landscape and are emerging in other industries such as automotive and retail. And there are no signs of this trend slowing down. 

Capturing the marketplace opportunity

The marketplace opportunity has arrived. This emerging e-commerce model offers a path to new revenue streams with nominal upfront investment and reduced risk. To take part, each business must determine how it wants to participate in or build its own marketplace. 

There are multiple paths to consider:

First path

Use an existing platform

There are solutions that productize and operationalize many of the unique business requirements of a marketplace model. Using this approach allows a business to scale with purpose-built functionality and reduce time-to-value without creating unnecessary risk. There may, however, be an access fee and the platform may charge a scaled percentage commission for each transaction.

Second path

Extend commerce solutions 

Many ecosystem players have deployed e-commerce platforms, but have not maximized their potential. Platforms such as SAP Hybris, IBM WebSphere or Oracle ATG have features and related business processes that can enable a marketplace. These solutions will require more work to build than a “bolt on” marketplace platform.

Third path

Go custom

Developing a bespoke solution from the ground up is possible, but there may be implications across commerce, supply chain, finance and customer service teams. These solutions are also costly and more time-consuming to get up and running. 

The opportunity is clear. The technology is available. And customers are eager for the reliability, pricing, and convenience marketplaces can afford. So, what are you waiting for?

To learn more about which marketplace solution may be right for you, or to explore how a marketplace can benefit your business:
Raj Shah
Raj Shah
Telecommunications, Media & Technology Lead, North America

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