Shopping Marketplaces Are Eating the E-Commerce World

Olivier Levy
Jan 10, 2019 · 4 min read

By Olivier Levy, CEO of Shopping Feed

In the software industry, you hear it often: “SaaS is eating the world”.
And, today, we are seeing the same pattern in the E-commerce industry.

Online marketplaces such as eBay, Google Actions and Amazon are eating up the world of E-commerce.

Today, for very similar reasons that businesses switched to SaaS, online buyers are abandoning standalone e-commerce stores in favor of the more convenient buying experiences offered by online marketplaces.

To understand this pattern, I will show five correlations between the famous “SaaS is eating the World” and “Online Marketplaces are eating the E-commerce world”.

I will conclude with some takeaway ideas about the future of CMS softwares (our partners) and e-commerce in general. I hope this will open our industry to better understand our next era.

1. “Years ago, businesses moved to SaaS to manage their efforts so they wouldn’t have to worry about hardware issues anymore.”

→ The equivalent in the E-commerce industry would be:

For the hardware, with its installation and upgrades, the costs of running them was the friction. For online-buyers, filling forms with their name, address and credit cards information are frictions. Online Marketplaces remove them.

2. “Years ago, businesses moved to SaaS so they wouldn’t have to worry about upgrades, up-time, and security.”

→ The equivalent in the E-commerce industry would be:

Marketplaces are automatically selecting the highest rated merchants and presenting them to you on a plate. As for businesses with SAAS, they fix the security issue for online buyers.

3. “Years ago, businesses moved to SaaS to get the freedom to access more features.”

→ The equivalent in the E-commerce industry would be:

Curated selection is a feature for online-buyers because they can’t find it on standalone e-commerce stores.

Only Marketplaces have these technical capabilities and data.

Recommendations could be seen as an ever-improving feature for online buyers, as it adapts with their behaviors over-time.

4. “Years ago, businesses moved to SaaS which solved a single problem with laser-focus, allowing their business to just run.“

→ The equivalent in the E-commerce industry would be:

As the YouTube search-bar surfaces videos, the only function of a Marketplace’s search-bar is to surface products.

Specialization of the search-bar = specialized page-results.

And remember, Amazon’s search-bar is the 3rd most-used search-bar in the world, Google.com and YouTube being the first two.

5. “Years ago, businesses moved to SaaS because these tools were available at any location, from any device.”

→ The equivalent in the E-commerce industry would be:

Online-Buyers don’t need to worry about the devices they decided to buy from: desktop, mobile, Google Home, Siri or Alexa, and, tomorrow, fridge screens.

Online buyers instinctively understood that using Marketplaces for their purchasing automatically turns them into cross-device buyers.

Marketplaces simplified buying-package experiences.

If online-buyers keep perceiving that Marketplaces remove some of the friction they experience when buying from individual online merchants, they will buy less and less directly from online-stores.

It’s logical behavior.

The shift is occurring: we are seeing it at Shopping Feed: our multi-channel software for international e-commerce reveals that more and more online buyers jump on the Marketplace bandwagon.

In my next article I’ll explore the question of what will become of E-commerce CSMs like Shopify, Big Commerce and Magento, and whether those models are endangered.

In the e-commerce CMS market, we’ve already seen two wars: the“User-friendly UX” war, and then the “App Store” war. Both of those wars definitely won by the Shopify team.

A 3rd war is coming, and as always, some CMS won’t survive this one.

Hopefully, one or two of these platforms will strongly address the online buying fragmentation for their merchants (read my Medium article about this fragmentation here), and win this 3rd war.

Because without a doubt, as e-merchants were looking 10 years ago for the CMS with the best UX, then for the biggest Appstore, they will be looking now for the CMS with the best multi-channel experience.

Yes, this 3rd CMS war is coming, and as any new conflict, it can annihilate any previous victories.

I will list in my next article, and with as much transparency as I can, all the lessons the E-commerce CMSs need to learn for the chance to stay on course (and some errors some of them are already guilty of).

Olivier Levy

Written by

CEO of Shopping Feed |NYC — USA | Twitter:@olivierlevy | LinkedIn : olivierlevy

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