Sangeet Choudary author of “Platform Power” gave an excellent and pragmatic presentation at the ICMA conference in Berlin. He’s not the first to identify the key shifts for classifieds being Mobile, Social and Big Data but he clearly defined the role each of these will play in the future of classified marketplaces.
No business is safe from disruption from the combination of an always smartly connected population, an identified population through any number of social platforms and the insights offered by the recording of our behavior. Whether your Craigslist or any existing vertical you are under threat.
The impact of mobile
Classified marketplaces have to some extent been undervalued as their only role was to enable the coming together of buyer and seller. 20 years into the internet and most marketplaces still fulfill only this purpose.
Mobile has the ability to change this allowing the tracking of interaction between buyer and seller from the beginning to the end of the transaction. Key functionalities of the phone as identifier, a messaging system and ultimately a payment mechanism enable a more efficient and safer marketplace.
However the relatively cheap cost of mobile technology also creates a problem for this new breed of marketplaces. There is no significant cost for a seller / merchant or buyer to be present and active on multiple platforms at the same time.
Social, identity and trust
The development of the single sign on makes it far easier for us to use any marketplace and the use of identity adds an immediate element of trust. But using a social sign on offers any marketplace little defensibility as there is no barrier to users switching platforms when any start-up can use the same mechanism.
Social also allows more triggers to usage, although I’m not sure classified marketplaces can replicate the passive usage that Facebook receives. Could email done well also trigger the same forms of usage?
What the integration of social platforms also does is enable the rapid viral acquisition of users. The spread of content and the initiation of discovery is no longer limited to the marketplace itself.
Big Data – not just numbers
The ability to record any and every user interaction on a platform has the power to drive the marketplace offering if used innovatively. As an example Choudary used the LendingClub’s use of user interaction data to determine which users were less likely to default on loans – if you played around with the slider for the loan amount you were more likely to default.
Of course data also allows marketplaces new interaction opportunities the most obvious is alternative recommendations to the user. But there is no reason why this should be limited to just the transaction – in future it could be applied to both pre and post purchase. There is also a significant opportunity to use data to help move from being a marketplace to becoming an infrastructure for users perhaps using data to provide services that can enhance the users business.
What does this mean for existing classified marketplaces?
If existing classified marketplaces are to avoid disruption and create businesses with more value they need to consider these five questions:
How do we shift from intent to context?
Whilst there is enormous value in intent (witness Google) there is more value if you can add context. As an example Monster knows the intent of the job seeker and recruiter. But LinkedIn offers us the context of career and ambition which they can leverage in multiple ways including enabling recruitment.
How can we capture more data?
As it is increasingly demonstrating Facebook’s value isn’t in enabling social interaction its from collecting an ever growing pool of data about us. The best of the new disruptors are capturing data continuously through small interactions. What data can we capture in any classified marketplace that can better enable the transaction and help the experience for buyers and sellers?
How do we activate and engage users?
The majority of incumbent classified marketplaces are passive, waiting for the users to come to them. Apart from relatively crude use of email there are no mechanisms to keep users engaged. We need to look carefully at our initial interaction with users – LinkedIn knows that getting the user to return within the first seven days is critical. How can we offer feedback to our users to drive the user back – can we help them optimize their listing, rate, review or help other users?
How do provide cumulative value to the user?
As mentioned more than once above existing marketplaces are almost all passive, we help with the discovery and connection. But when this occurs we wave goodbye to the user. Disruptive marketplaces will provide increasing value for the user – whether that’s establishing a reputation, rewarding activity with increased exposure or perhaps lower fees. This value doesn’t have to be limited to the seller side, why not reward people who buy frequently through the platform – at the very least shouldn’t they get a discount on their purchases?
For a long time I’ve presented that classified marketplaces are in the business of bringing buyer and seller together. But as Sangeet Choudary says to survive and thrive in the future classified marketplaces must be in the business of enabling efficient end to end transactions.
Written by: Rob Paterson, CEO, Pantera Digital