E-commerce giants like eBay, Amazon, and Craigslist have dominated the waters of the online marketplace for years on a stretch, but this situation is fast changing thanks to the emergence of a new kind of fish in the pond – services marketplace or vertical marketplace. Having been on the top of the sales chart and the minds of consumers, the big fish like Amazon are struggling to keep pace with what vertical marketplaces like Uber, Odesk, Airbnb, and the likes are bringing to the fore. It has been an uphill battle, but the future is seemingly quite bright for these marketplaces. The hotshots are still pretty much in favor, but there has been an upward rise seen in the preference of vertical marketplaces by consumers.
As experts see it, the defining reason for this switch is the core difference between how horizontal marketplaces and vertical marketplaces function. The likes of Amazon serve several industries and carry a plethora of products, which may or may not relate to a particular industry. On the other hand, vertical market places, such as Uber cater to the needs of a particular industry and provide services that are related to each other in one or the other way. Dealing with a huge list of retailers, managing shipment, and ensuring product delivery in stipulated time are tasks that are too big even for million dollar marketplaces like eBay to manage. And this has led customers searching for an alternative; for marketplaces, those serve one vertical, but have quality written all over their products/services.
Although technology has been an important cog in the wheel of vertical online marketplaces, their rise has been more due to their unerring focus on helping people find a quality solution. If we take Uber for example, the sole reason for its growth can be accounted to its commitment towards providing travelers a simple and cost-effective way of finding a taxi or cab anywhere, anytime. For this, they have created a user-friendly app that connects consumers with Uber drivers.
An online marketplace needs to be consistent in what it delivers to consumers, if it intends to last the race. The rise of vertical marketplaces has been more due to their mantra of delighting consumers and thus making them spread the word-of-mouth about their quality of services; marketing endeavors don’t account much for their popularity. To achieve this, user experience must be kept at the forefront and every aspect of service delivery, including app experience, price, and customer service has to be well-managed and targeted at creating a user experience like no other.
It is still early days and competing with horizontal marketplaces like Amazon would require a massive shift in domination of the online marketplace, the story of Uber and Airbnb has certainly made many entrepreneurs think out-of-the-box and come out with strategies that can help them use the vast expanse of the online marketplace to their advantage. The opportunities are certainly there for the taking, entrepreneurs just have to be brave enough to take the plunge into the online marketplace pool and build their own success story for others to follow.
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