A shifting paradigm
One of the most important puzzles of ecommerce today (and commerce historically) is how to match the right brands (supply) with the right shoppers (demand).
Marketplaces writ large have been one of the most common ways this happens, for good reason: they simplify the browsing process for shoppers, and they aggregate potential buyers for merchants.
But marketplaces today are changing: we’re now seeing more niche, relationship- and interest-based marketplaces that aggregate demand based on the strength of their content: their expertise, thoughtfulness, and curation in a certain space. To deliver on the promise of these emerging experiences, marketplaces have new infrastructure needs to support the changing expectations of today's consumer.
This article looks at the changing landscape of marketplaces and Violet’s role in enabling their future.
From convenience to experience
Broadly, we define marketplaces as third parties that aggregate supply and demand: shoppers on the one side and merchants on the other. Marketplaces generally distinguish themselves based on three main factors: variety, selection size, and price. With the advent of online marketplaces, search functionality and navigation have become the primary utility of successful marketplaces. Search and ease of navigation are so important because online retail’s core value is in convenience and efficiency.
No online marketplace has been more successful at this convenience model than Amazon. With their two-day shipping, one-click buy button, buy-online-return-in-store (BORIS), and a selection that includes everything from movies to clothing to a three-ton power lathe, Amazon has made online and in-person shopping convenient in ways many had never imagined.
But with the leaps and bounds in mobile apps, social media, online games, and forthcoming AR / VR experiences, shoppers’ priorities are changing. People don’t want to spend all their time online looking at a filtering menu on the left rail of a page any more than they want to gaze at a towering shelf of shampoos. Rather, people want to spend their time online in ways that are stimulating, fun, and driven by their passions and interests.
The COVID-19 pandemic accelerated the development of emerging online experiences, as many IRL events, stores, and activities were forced to shift online. Stuck inside with only their smart devices to connect them to the world, people started to spend more and more of their time engaging with what we call contextually rich experiences. And the more time they’ve spent in them, the more they now want to be able to shop within them too.
Contextually rich impulse-creation
So what defines contextually rich experiences? And why do they matter for marketplaces?
Generally, an online experience is contextually rich if it is shown to the shopper at the right time, in the right place, spoken about with the right authority and authenticity, and presents compelling, value added information. Historically, this has been done using tracking cookies and personal data, but shoppers are increasingly finding this context from specific people, and niche platforms that they seek out. Specifically, channels are offering contextually rich experiences by making them:
- Relevant: This may sound like an obvious one, but people want to see things that are relevant to them: to what they need, want and care about.
- Targeted: A toothbrush is relevant for anyone with teeth. People not only want relevant search results, but they want products that fit with their lifestyle, be that aesthetically, ethically, geographically, etc.
- Niche: People want to spend their time pursuing their passions, not perusing aisles. Niche experiences built around interests like music, crafting, robotics, and gaming are far richer experiences in which to discover products that people will actually want.
- Community / relationship-based: People also want to buy in a community of like-minded shoppers and/or experts. It’s the participation in shared interests that drives the experience, not the acquisition of goods or services.
But contextually rich experiences are not only valuable because online shoppers are starting to prefer them: they also offer the ability to innovate and expand on what it can mean and feel like to shop.
In a recent interview with Paul Strachman, Violet investor from Red Sea Ventures, he defined the two core aspects of commerce as search and impulse, in which search is the process of looking for a product the shopper already has in mind, and impulse is the urge to purchase something that comes from organic discovery. Contextually rich experiences offer far more diverse opportunities for impulse-creation, not just search filters and results. It’s this ability to create new and exciting approaches to impulse-creation that really make all the emerging online channels today such a huge opportunity for marketplaces.
Meet the CX-powered marketplace
In many ways, this wave of impulse-creation online is already happening: you’re watching a favorite TV show or a Tiny Desk Concert of your favorite band: you weren’t looking for a new pair of sunglasses or synthesizer, but the experience of seeing these products within a context that is meaningful to you gives you the impulse to purchase them: the purchase is also more meaningful because it comes out of online experience that are significant to your interests and passions.
The problem is that today, these impulse-creation moments can’t lead directly to a purchase. We’ve all experienced this as shoppers: we see a product advertised in a DIY tutorial video or a list of favorite athletic gear from our favorite WNBA player, only to have to click out to a different site and navigate through an often clunky checkout experience. This is usually even worse when we’re on mobile. These backend mishaps make shoppers less likely to revisit a channel, to purchase from that channel, or both. At Violet, we call this situation the frontend trap. Too often marketplaces and other online channels invest heavily in creating amazing frontend experiences, but fail to develop the backend infrastructure required to support it. This creates experiences that are amazing…until they aren’t.
But a rich experience and convenience aren't mutually exclusive.
With Violet’s Unified Commerce API, any online experience can function as a marketplace that offers integrated checkout. The API makes it possible for any online channel to connect with sellers and add their products in a way that ensures a rich shopper experience, and allows more innovation in the way products are merchandised and presented to shoppers. Because we handle the backend infrastructure, channels can become contextually rich shopping experiences, and contextually rich experiences that don’t yet offer products can become new, engaging, niche marketplaces.
The end state is a more compelling way to aggregate products and an array of much more targeted, customer-experience-forward ways to shop, in which supply and demand find each other in marketplaces that go beyond providing convenience and provide community, stimulate the imagination, and keep shoppers coming back for more.