Imagine generating a single years revenue of $37 billion and $683 million. Conventional wisdom suggests that you’d need massive amounts of inventory on hand to sell that much. But when Uber and GrubHub reported those numbers in 2017, they did so without owning a single restaurant or car. These are just two examples of companies who have upended the traditional marketplace by pioneering the gig economy business model.
An online marketplace is any digital space in which the two sides of a transaction are connected via technology and the owner or seller does not own any inventory, instead, they simply facilitate the transaction. As companies like Uber and GrubHub clearly display, this business is booming. The 75 largest online marketplaces grew by 30 percent in 2017, accounting for nearly half of all global online shopping.
While others make predictions about what online marketplaces will look like for the remainder of 2019, we think it’s time to look even further to 2020.
- It’s all online
Online marketplaces will function as the starting point for nearly every interaction businesses and consumers have with goods and services. Consumers have proven they will buy and purchase just about anything online, and marketplaces are rushing to bring them even more choices and flexibility. Traditional businesses will adapt and leverage online marketplaces to bring their goods and services to market. More and more will come to see marketplaces as a quicker avenue to new revenue streams or as an expansion of their existing distribution model.
- Or maybe it’s all in an app
Is there an app for that? This is a question we won’t hear much of anymore. It will be a basic assumption. Marketplaces that succeed will have speed and mobility at their root. The majority of marketplaces will become app-first, or even app-only. You’ll start seeing early marketplace businesses relinquishing their websites as they head towards the app-only future. There are so many already that already have the majority of their presence through apps only (think: Uber, grocery delivery services).
- Litigation will continue to increase
Between 2002 and 2018, clickthrough litigation has skyrocketed. The rise in litigation reflects the increase that B2B and B2C internet companies having to defend the enforceability in the Terms of Service and other online agreement terms. This will only continue to increase as we head towards 2020.
- Niche is key
Online marketplaces will be even more verticalized and hyper-focused than they are today. While it’s a safe bet to say marketplaces will continue to grow, sustaining that growth will require them to focus on providing an amazing customer experience and deliver value on each and every transaction.
- Clickthrough will replace traditional esignatures for standardized agreements Online marketplaces will continue to adopt clickthrough agreements because there is no better way to mitigate legal risk without impacting conversion. Marketplaces are onboarding new customers and providers at an accelerated rate, and clickthrough offers a scalable, standardized, and frictionless experience that reduces their risk and liability exposure.
2020 might seem ages away, but it’s closer than we think. Each day these predictions are getting close to becoming reality. More and more companies are joining the online marketplace space, apps are becoming standard, and more business leaders and understanding the importance of clickthrough agreements. We can only imagine what 2025 will hold.