Competition in online retailing is getting high. As it is getting more easy and user friendly to enter into internet retail segment, more competition – specially from small businesses – is coming up. At this point of time, it is important to understand important characteristics of a successful marketplace to improve sustainability and profitability in them.
There are four most important characteristics of a successful marketplace which makes them more stable and profitable:
Product/Service Specialization: Customers would prefer your online store over others if it gives them something beneficial which other are not. These benefits can include cost advantage, product differentiation or it can be something unique and beneficial in your overall business model. The need for focus on product/service specialization increased with the growing competition.
Specific Targeting: With increasing competition, it is getting more challenging to rule the globe and so smart marketplaces start their focus from small market niches and expand step by step conquering small individual segments. This helps them focus their maximum resources mastering a single target market with more probability of success.
User Experience: In this era of laptops, smart phones, smart watches, it is important to create a successful user experience. Although seems not so dominating, but creating amazing user experience with process flows, service, payments and post sales service creates a very strong competitive edge for market places – specially when user is equipped with so many alternatives around.
Focused Marketing: Advertising and marketing is still one great tool to zap the clutter of competition. Although it involves the cost, but returns are high. There was a time when online businesses used to have enough benefits from organic marketing. But today, a successful marketplace need to be backed by strong and focused marketing and branding activity. Without spending money on advertising and marketing, the probability of growth and staying ahead of competition is very low.
So if you are running up an online marketplace, your next strategic focus should be on product specialization, aligning your profitable target segment, creating an amazing user experience and branding as it will result in higher probability of success.