Internet searches can be broken into two categories – informational (news, Wikipedia, trivia questions) and commercial ones (products and services). While the internet is a key destination for commercial queries, the way people search is changing. On traditional search engines, a user has to perform some actions to get what they want: find a right option, call or email the provider, check the price and availability.
At the same time, on-demand economy has set a new bar for the quality, speed and convenience of search. Users are no longer willing to wait, they simply look for a quickest way to solve their problem, rather than to merely browse search results. As a result, customers turn their eyes to the online marketplaces that bring together almost everything – from airline tickets and restaurants to brands and services – see a 300 percent growth per year, according to Stripe.
Marketplaces have a potential to replace search engines as platforms of choice for commercial searches – and here is why.
Shift in behavior
Let’s face it – it’s already happening. More US internet users start product searches on Amazon (46.7 percent) compared to Google (34.6 percent). When it comes to buying, customers preferred to search and purchase the goods on Amazon (41 percent), or to search on Google and then to buy on Amazon (28 percent).
One reason for it is the data accumulated by the marketplaces. Extensive reviews, Q&As, pictures both from retailers and buyers, comparison options lure both online and offline shoppers to research product information. Multiple parameters also enable a greater search personalization.
That leads to another shift. Research shows that it takes a user longer to complete a purchase after a search on Amazon. An online marketplace becomes a preferred product research engine, while Google is used after a customer already knows what to buy. At the same time, according to Salesforce, online marketplaces tend to win a battle for the second purchase and customer loyalty.
Another change hits the restaurant market where the delivery-only “ghost” restaurants are working solely on aggregate marketplaces like Deliveroo and Uber Eats. Those virtual restaurants don’t have seating or storefront, however, they have more opportunity to experiment with menus based on what users search. According to Morgan Stanley, the food delivery market could grow to $220 billion by 2020 from $30 billion in 2017, and the opportunity to exist solely on a marketplace gives entrepreneurs a chance to develop business and cut costs of traditional restaurants.
Key takeaway: businesses can no longer ignore placing their products on marketplaces – otherwise they risk not being noticed at the earlier stage of user journey. Commercial searches are the most obvious area where marketplaces can seamlessly overtake search engines, as they already do.
Why is this shift in behavior happening? Unlike the traditional search engines, marketplaces seem to do a better job going beyond the list of relevant results and provide an actual solution to users’ search intent. That is true not only for product searches, but also for services – Andrew Chen from Andreessen Horowitz actually predicts a new era of service marketplaces to emerge, including the ones providing access to contractor jobs.
The gig economy is a growing trend worldwide – just in the U.S., it counts over 60 million workers, and by 2027 the majority of American people will work independently. Freelancer marketplaces like Upwork and YouDo not only help users to seamlessly find the best talent on the market, but also to use some functions to enhance the post-search experience.
For example, Upwork provides businesses access to collaboration and project management tools, invoicing and international payment processing, while freelancers can benefit from access to Microsoft Office tools. Facebook Marketplace has expanded into home services last year, powered by other three marketplaces – Handy, HomeAdvisor, and Porch. Users can search by reviews, location and other data points powered by the marketplaces, as well as to get a quote directly on Facebook and communicate to a chosen professional through Facebook Messenger.
YouDo serves as a one stop shop for the day-to-day jobs like Ikea furniture assembling or roof maintenance, or some quirky tasks like helping with a marriage proposal. Interestingly enough, YouDo features a search bar powered by AI to recognize the request made in natural language and find the right professional to do the job.
Key takeaway: marketplaces are a backbone of gig economy. Large databases ensure a quicker search for the talent, enhanced functionality enables greater personalization as well as a better post-search experience. As a result, on-demand marketplaces provide not just a better search option, but also allow businesses and consumers to save time.
From voice search to voice purchase
Voice search is a trend for both search engines and marketplaces. By 2020, 50 percent of all searches will be done by voice, and 40 percent of millennials already use voice search before making a purchase online. Google and Amazon lead the adoption through voice-powered personal assistants (Google Assistant and Amazon Alexa), smart speakers (Google Home and Amazon Echo), and generic voice search functions onsite.
While the clear winner is yet to be determined, marketplaces are not giving up to search engines and continue to invest in better experiences. For example, Amazon has already patented a new technology to allow Alexa detect user’s emotions and feelings – if the assistant recognizes a cough, it might prompt the user to buy some medicine.
Key takeaway: voice search battle has just began, but marketplaces are effectively competing with search engines. Leveraging AI algorithms, improving voice recognition and adding extra functionality to help users find and buy what they want allow marketplaces to stay in line with customers’ needs.
Romi Kumar, Writer at HackerNoon