What makes online market places so successful?


Four critical success factors that distinguish market places from traditional retailers

Global market places are on the rise and this trend will likely continue over the next few years. This is evidenced by the market places’ impressive revenue growth and Gross Merchandise Volume. Market places cannot be ignored anymore within the retail industry. However, why are they this successful and what sets them apart from more traditional retailers and brands?

“Through our ‘Rise of the Global Market Places’ study we are striving to help companies define their strategy for successful competing, and growing, in a world where online market places are a dominant force,” says Prof. Jory Abraham, Managing Director of the Ecommerce Foundation. Prof. Abraham conducted the Rise of the Global Market Places study in cooperation with Prof. Kitty Koelemeijer of Nyenrode Business University, and with Ecommerce Europe.

Rise of Global Market Places

Why market places rise

An important element of the research study was working through more than 450 books, articles and case studies about market places, in order to gain more insight into the market places’ keys to success. Based on the findings, four critical success factors emerged from this desk research: assortment, price, convenience and inventiveness.

Market places work with a lot of suppliers and as a result, they can offer a very broad and deep assortment, giving the customer a wide range of solutions to their quest for products and/or services. In addition, market places can offer their items at a lower price than retailers because of the scalability of their platform. Also, convenience is a key aspect for online platforms. They strive to make the customer experience as smooth as possible, which is evidenced by developments such as one-click buy and same-day delivery. As a result, they excel in customer satisfaction.

“Market places combine these three success factors with a form of inventiveness that is remarkable for companies of that size,” says Prof. Abraham. “For example, Amazon now has more than 150,000 employees and it still is able to remain quite innovative, by developing new products and services that benefit both the platform and consumers. They are able to combine continuous innovation with operational excellence, which gives them a clear edge over the more traditional retailers and brands.”

For more information about the Rise of the Global Market Places study, please click here to download the online version.