We've come a long way since 1994.
Amazon first opened as an online bookstore and has since grown to reap more than 460 billion dollars of profit in 2021.
And it's not the only player out there; from China to Latin America, online marketplace websites continue to grow.
None of this is expected to change anytime soon; customer spending is increasing, and the homebody economy continues to grow.
In 2021, B2B marketplaces logged a whopping total of 1.63 trillion dollars in online sales.
For B2C marketplaces, retail e-commerce sales reached 4.9 trillion dollars.
Shoppers opt for an online marketplace instead of an individual brand when they want competitive prices from multiple sellers and policies that make them feel safe (like cash on delivery).
Getting a share of this pie can be hard work, though.
There will be business challenges like finding, attracting, and retaining customers, choosing a sustainable monetization model, and ensuring secure online transactions with any venture.
And the surest way to succeed is to identify problems your marketplace can solve.
Let's look at how we might address customer pain points in your specific niche.
Identify the Type(s) of Problems Your Online Marketplace Might Solve
In general, there often are four major customer pain points.
The first is financial, or when customers feel they're not getting the price they want from merchants.
An online marketplace can offer a solution to this, particularly if you aggregate several shops that offer reasonable pricing.
Giants like Amazon continue to enhance their reasonable pricing by leveraging financial functionalities like their Amazon Prime Rewards Visa Signature Card or Amazon Prime Store Card.
Shoppers that will pay for their purchases with either of these two will be entitled to a 5% cashback.
Similarly, they entice users to pay with Amazon Pay by holding special events that offer 30% cashback on products paid with their online payment service.
Alternatively, your online marketplace might address the productivity issue, or in this case, when customers feel like they're spending too much time finding a product or service.
The productivity issues can be closely related to the third type, the process pain point, or when people feel like the flow from doing their initial search to closing a sale is too long.
Airbnb fixed these pain points for their target market by making it easy to choose from various options that correspond to their specific requirements in terms of location, budget, or amenities.
And the last is focused on support pain points, or when customers feel like they are not getting the customer support they need before, during, or after the sales process.
If you can't quite spot which of these categories apply to the problems that customers face in your niche, that's okay.
The next set of tips might help you hone in.
Brainstorm by Reading Customer Reviews on Leading Marketplace Websites
One of the best ways to understand what customers are struggling with is to read what they say about the leading marketplace websites.
Shoppers are very vocal; in 2019 alone, almost half of all users in the world post reviews every month.
52% of them will publicly complain about service issues, more than 31% will leave negative reviews about bad products, and over 16% will also do the same for policies that they find unreasonable.
But customers don't do all this to badmouth a business; around 73% of them post reviews to steer others away from a similar negative experience.
These weaknesses might be your opportunity.
For example, if you're launching a platform similar to Airbnb, reading customer reviews will help you identify the most common issues people have with it.
These can include difficulties such as canceling a reservation, resolving complaints during guests' stays, managing emergencies, and meeting local regulations for short-term rentals.
Or, if you're trying to build a website like Amazon, negative reviews will provide a clear look at the most common complaints about the platform.
Top of these is poor product quality, which has resulted in exploding or melting products; or, some sellers put up products that are point-blank unsafe, like children's toys containing lead.
Listen to Your Target Market With Qualitative or Quantitative Research
To supplement reading customer reviews, you may want to conduct qualitative and quantitative research.
You don't need a full-on research team to get these done.
For qualitative research, you can try social listening.
Social listening uses consumer conversations on social media to glean business insights.
And it is being done by 50% of marketers worldwide, particularly during the pandemic, so that they can better chart changing customer preferences.
One of the top strategies they use among social media marketers is to follow specific hashtags and live videos.
When customers are unhappy, 96% of them won't directly tell brands but will tell 15 of their friends about it.
It can also be helpful to create customer journeys to map out how your customers navigate the buying process and design customer personas.
Are these necessary? At a minimum, they can be pretty helpful. Design customer personas, in particular, have been shown to contribute to better value propositions for 82% of companies.
Additionally, 71% of businesses with customer personas did not only meet their revenue and lead generation objectives; they surpassed them.
For quantitative research, you can conduct online surveys.
Online surveys are particularly helpful before you finalize the features you will build into your online marketplace.
And surveys can be effective without costing you a lot of money.
Well-executed surveys, in particular, can lead to an over 85% response rate.
Keep it short, as respondents can start losing interest with each additional question.
Email surveys, traditionally, have about a 24.8% response rate. If you're servicing the B2B market, it's best to send it out on a Monday, and for B2C customers, Tuesdays, Wednesdays, and Fridays are good days.
Design Your Online Marketplace Around Customer Needs
We might design your marketplace website to address your target market's specific problems using the data you have gathered.
It can be tempting to focus on monetization when launching an online marketplace.
To truly break away from the pack and attract and keep loyal clients, it's best to focus on making your customers happy.
Customer-centric businesses are rewarded with customers who are 86% more willing to shell out more money for better experiences.
Similarly, 66% of consumers expect a business to understand their needs and expectations, while 52% demand personalized experiences.
Even more critical: 70% of purchases are based on how customers feel treated.
Adopt a Growth Mindset!
Finally, don't stop learning about your customers!
According to the Bureau of Labor Statistics, 20% of new businesses fail within the first two years.
To try and avoid this, one will need to continually grow and learn what your customers want.
The growth mindset encourages a change in perspective, where you see setbacks as opportunities.
Microsoft has seen record annual revenues after its new CEO decided to implement a massive culture shift in the organization from know-it-alls to learn-it-alls.
After your launch, you will undoubtedly encounter opportunities for improvement.
Embrace them, learn from them, and continually aim toward growth and development.
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