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Marketplace Q&A | Joe Cicman – Senior Analyst, Forrester

What are the business opportunities available for those who launch a marketplace, and when is the right time for an enterprise to launch a marketplace?

The big long-term opportunity is outcomes as a service. The immediate tactical opportunities, however, break down into two segments (this is how the vendor landscape currently breaks down): platforms for selling bits and platforms for selling atoms.

What I mean by that is we have platforms for selling digital services, like software as a service (SaaS), or for selling physical things such as phones that you hold as inventory in warehouses. Broadly speaking, I’ve found that the current platforms only do one or the other of those very well. Some do simple digital services or simple physical inventory, but they wouldn’t stand on their own as being feature-complete in that regard.

Despite having underdeveloped crossover functionality right now, their trajectory ” and the market’s demand” is clear. The platforms market is converging around selling “anything as a service” or outcome as a service. The thing about outcomes is that they need a bill of materials (a bunch of things), human-rendered services (think the “Uberfication” of installation), and digital services (like remote monitoring, remote control, or fleet management).

It’s important to look at outcomes from the perspective of convenience and brand trust. Is there one place I can go where I can get outfitted with everything I need? A place that has all the right stuff for whatever level of sophistication my project needs? That’s hard to pull off in a traditional resell-based retail business ” one that buys wholesale and stocks all that stuff.

From the perspective of brands, that reseller often represents a blind spot between them and the consumer. That blind spot impedes the brand’s ability to learn how its stuff is being used in real life ” and to leverage that insight to make better stuff.

As for timing, right now, marketplace strategy and operations consulting are more valuable than the technology. Why? Because the technology is built on the cloud and provides innovators the flexibility to implement countless business models. This boom in strategy innovation won’t be inhibited by the technology ” thankfully. The time is now.


It’s one thing to launch a marketplace, but how do you scale a marketplace to ensure that it becomes a long-term destination for target sellers and customers?

Think first about strategy. And be precise ” formulate a strategy for your own particular customer base. Do it well ” do the primary research, build journey maps, prototype, and validate the digital interactions that benefit your customers and provide value to your firm. And retain your customer experience program for the long term so that you continue to iterate and follow your customers.

If you don’t have the capabilities in-house, use a full-service digital agency. Don’t skimp, and don’t blindly copy a strategy that worked for someone else. You wouldn’t take your neighbor’s medication just because she’s feeling better today, would you? (P.S. if you said you would do this, you should have said that you wouldn’t do this.)

While many customer experience principles from e-commerce apply to marketplaces, there are significant differences on the operations side. One big difference is the traditional first-party buyers. These folks represent a formidable power structure within, say, large B2B distributors. But in a marketplace model, you need recruiters to bring third-party sellers onto your platform. That’s a different skill set ” a different mentality” and a different set of practices.

Another operational difference is how marketplace operators serve sellers with data. There’s still an opportunity for marketplaces to do a much better job of providing data back to their sellers to help them do a better job of targeting offers. The winning strategy here is to treat both customers and third-party sellers as first-class citizens on your marketplace.


What do you anticipate a marketplace will look like two years from now?

I predict we’re going to see marketplaces competing for brands’ attention by offering increasingly robust and helpful sell-through insights and digital marketing tools.

I also predict we’re going to see more marketplace listings for outcomes. Consumers and business buyers won’t necessarily identify these branded sites as marketplaces, however. The sites will be from established brands that buyers trust. You’ll see things like cold air as a service the HVAC unit will be manufactured for maintainability (because, like SaaS, the manufacturer will have to own it and operate it), “Larry in the white van will perform the services and win jobs based on digital reputation, it’ll be accessorized with thermostats from Nest or Honeywell (whoever has the most desirable smart-home ecosystem), and it’ll have remote digital services for diagnostics and optimizing energy consumption.

Joe Cicman
Senior Analyst, Forrester

joe-blog-profile

Joe helps eBusiness professionals assess & optimize B2B & B2B2C eCommerce technologies & strategies. Part of the digital transformation team, Joe provides a proven practitioner’s lens for organizations to understand how to deploy the economics of digital commerce that unleash best-in-class outcomes.

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