10 things we have learned about marketplaces since we launched
Published by detected on
It’s our first anniversary at detected and we couldn’t be prouder with what we have achieved so far. Happy birthday to us!
Building our solution to solve a key problem for marketplaces and consumers alike – seller verification and trust – means we have learned a thing or two since we were founded. So has working closely with companies like BigCommerce, Spryker and Machine Compare.
Here are ten things the detected team has learned about marketplaces.
1. There’s a marketplace for everything, and niche marketplaces are increasing
The number of niche and vertical-focused marketplaces has increased in recent years. These are marketplaces that offer more a more specialised selection of products, focus on one industry or offer hard-to-find or unusual items.
Today there’s a marketplace for everything. In the consumer industry, these are especially common in fashion, lifestyle, health and wellbeing. For example, there are marketplaces for things like wholesale beauty items, CBD products and sportswear.
People can also shop for second-hand fashion on marketplaces such as Depop, personalised gifts on Not On The High Street, and handmade one-of-a-kind items on Etsy.
For business purchases, we’ve seen massive growth in specialist marketplaces – from timber products and machinery spare parts to chemicals and industrial equipment.
2. The industry has thrived through the pandemic
Venture capitalist funding has flooded in, eCommerce has boomed, and marketplaces have proven their worth through all the disruption caused by the pandemic. In fact:
- Ten years’ worth of online deliveries were made in just eight weeks in the US after the pandemic started, according to a study by McKinsey in 2020.
- 37% expect to spend more on online marketplaces since the pandemic started, according to Statista.
- Marketplaces grew over 80% in Q4 of 2020, according to Tamebay.
The pandemic has rewritten the rules of retail, possibly forever, as people are ditching in-store shopping for the convenience and choice offered by eCommerce and online marketplaces.
3. Mobile eCommerce continues to grow
People are now using their smartphones to do just about anything online, and the trend in ‘micro moments’ means consumers are impulsively using their phones to quickly find answers to burning questions.
With this, they are becoming more impatient, easily distracted and hellbent on finding what they want. This means they don’t have the patience for slow loading times, bad user interfaces, unhelpful product descriptions and pushy sales tactics.
Mobile eCommerce will account for more than 70% of total shopping in 2021. It’s important for marketplaces to deliver mobile-friendly shopping and focus on providing a great user experience with things like:
- Responsive design
- Quick mobile purchase options such as one-click buying
- Easy seller verification
4. People want richer information before they make a purchase
Consumers have high expectations of marketplaces, and want a more enriched
profile of information before they buy a product.
For example, improved size guides, instant chat options, and augmented reality to visualise potential purchases are all becoming more common.
This doesn’t stop at product information though. People are also interested in sellers. In fact, our survey
found that 84% of people said they always or often conduct research to check the credibility of a business they’re buying from before making a purchase.
Tamebay also found similar results in its study of consumers checking out the background information of sellers. The publication found that in the UK:
- 42% research sellers before buying on Amazon
- 46% do this on Groupon
- 48% research sellers on Etsy
- 51% research sellers on Alibaba
- 52% research sellers on Gumtree
- 53% research sellers on Wish
- 54% research sellers on eBay
5. Dishonest sellers, fake listings and marketplace scams are on the rise
Dishonest sellers, fake listings and marketplace scams are a growing problem. Buyers often have issues with being mis-sold goods, failed deliveries (or products that were never intended to be shipped), counterfeit and poor-quality items.
Increasingly, sellers are scamming buyers through online ‘contact us’ forms despite having no physical address, email or phone number, using newly registered domains and disappearing sites. This has only increased since the pandemic started.
Here are the stats:
- Citizens advice in the UK has found a 160% rise in online marketplace scams over the last year.
- One in five marketplace listings show signs of fraud, according to an analysis by Besedo.
- A quarter of UK consumers have accidentally bought a counterfeit product while shopping online in the last 12 months, INCOPRO found.
6. Consumer trust in sellers is declining
Unsurprisingly then, consumer trust in sellers is declining. This is reflected in findings highlighted in
detected’s survey of UK consumers. Almost 40% cited that their trust in brands had declined over the past three years. This is compared to less than 10% who said it had improved, with the remaining 54% who said it hasn’t changed since 2018.
It’s important to use things like SSL certificates (the padlock in the address bar on a site) and trust seal logos (from places such as Verisign, TRUSTe, McAfee and PayPal) at the checkout on eCommerce sites to increase consumer trust.
In fact, one of the biggest reasons for cart abandonment is a lack of trust. A study by Actual Insights
on trust logos found that 61% of participants said they have previously abandoned their cart because there were no trust logos present.
7. Reviews aren’t enough, and fake reviews are common
Fake reviews are a common issue in eCommerce today, which is adding to distrust and scepticism among consumers. But this may be about to ease as fake reviews are soon to be made illegal under
new proposals published in July 2021. The Competition and Markets Authority will be given powers to fine companies that try to boost sales by using ‘influencers’ to post fake reviews.
Still, while reviews and social proof (faked or not) are definitely key deciding factors for consumers thinking of purchasing, they are now looking for more tangible proof points of seller credibility that are less subjective.
8. Social media marketplaces are growing
In recent years, there has been a rise in social-media-turned-marketplaces such as Facebook Marketplace, as well as shoppable posts and “shop now” buttons on Instagram and Pinterest. Shopify also partnered with TikTok in 2020.
Shoppable posts allow businesses to embed links which mean customers can view product details, and purchase items on the spot. Often, without the need to leave the post or platform. This satisfies the consumer desire to buy immediately and conveniently. And, looking at the stats:
- In 2020, social commerce sales in the United States were estimated at nearly $27 billion. This is projected to reach $79.6 billion in 2025.
- Social commerce is expected to account for 5.2% of U.S. retail e-commerce sales by 2025.
- The percentage of users shopping on Pinterest grew more than 50% in the first half of 2020.
- More than 25% of time on Pinterest is spent shopping—higher than on any social media platform.
- 58% of consumers are more comfortable purchasing an item directly from a social media platform than a company’s website, according to Poshmark’s 2020 social commerce report.
9. Seller verification is often under prioritised
The need to grow quickly and satisfy consumers with things like pricing, delivery options, returns and refunds often pushes due diligence and proactive seller verification to one side.
With Amazon and eBay reducing buyer friction around products returns and refunds, including free and ‘returnless’ refunds, other marketplaces are under pressure to offer similar options.
Marketplaces are beginning to realise that strong seller verification can be a real asset and differentiator.
10. There is a need for complete, high-quality seller verification data
Finally, standardised electronic identification and Know Your Business (KYB) practices to verify a business’ credentials, location, potential criminal activity and to identify fake or shell businesses are crucial.
But often, marketplaces take a lot of the data they’re provided with from merchants at face value, and there’s no central reliable global database for KYB verification.
The detected platform solves this problem. We provide a single connection to the world’s leading data sources, standardise this information, transform the data into something actionable and brings everything together in one intuitive dashboard.
To find out more about putting trust back into eCommerce, download our whitepaper.