How Technology is Revolutionizing Online Marketplaces

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How Technology is Revolutionizing Online Marketplaces

When you hear the word ‘marketplace,’ what comes to mind? Does it evoke the image of a busy section in a village, town, or city where vendors sell various kinds of wares? How about when you come across the term ‘online marketplace’? Do you still imagine the same thing but in a digital setting?

If you do, then you are right. Amazon and eBay are famous examples of a marketplace website or an app that allows consumers to find anything they need or want under the sun. However, the owner of the website or app themselves do not have an inventory. Instead, they serve as an online marketplace platform where vendors can offer their goods directly to purchasers.

But online marketplaces are not limited to physical or digital goods only. In fact, there are those that specialize in enabling solo professionals to offer their services to entrepreneurs and organizations of all sizes. These freelance websites, such as UdYamJob, operate in a similar manner as horizontal, vertical, and global marketplaces for goods and merchandise. They provide a venue for freelancers and even teams to find clients online.

The growth of online marketplaces for freelancers

In 2018, general freelance websites and specialized freelance websites were among the go-to places for people to find work online at 23% and 16%, respectively, according to a survey by Statista. The most popular sources of freelance work, though, are friends and family (46%) and social media (40%).

Beyond those sources, and many others, the freelance industry has come far. Before, there were only about 10.3 million freelance workers in the United States in 2005, an article by The Balance Careers states. In 2020, this figure is projected to increase to over 60 million, which means 40% of the American workforce would be freelancers or contingent workers.

What makes freelancers popular to businesses and organizations are their value for money. Their services cost less because they can work on a contractual or on a per-project basis. Plus, companies and institutions do not need to provide them with health benefits, insurance, and the like.

How technology is spurring the growth of online marketplaces in 3 ways

While there are many factors why people like to shop for goods and services online (convenience being one of them), technology may also have a hand.

Mobile shopping has been gaining traction recently and, as shown in a Statista article about e-commerce globally, smartphones accounted for 3.28% of conversion worldwide in the fourth quarter of 2018. This is most likely to the proliferation of online marketplace apps on mobile, which streamlines the browsing and shopping experience for consumers on smartphones and tablets.

Specifically, technology is changing online marketplaces in the following ways.

  1. AI and machine learning aid discoverability

AI and machine learning are common features of Software as a Service as well as of mobile and desktop apps. But they are also an important facet of any online shopping marketplace because they help shoppers find what they want or need immediately. Plus, the same technologies point them to items or services that could complement the things that they are on the market for.

These innovations are extremely beneficial because they allow buyers to sift through thousands, even millions of items. They make shopping for goods and services more convenient because they provide accurate results that match the requirements of buyers.

  1. Online payment gateways for secure transactions

E-payments did not use to be as seamless as they are today. When the World Wide Web rolled out, it also allowed different innovations to be born, such as online banking, online payment processing, and online payment gateways. Though there were several options to pay for goods and services online in the 1990s, it was not until the early 2000s that revolutionary technologies changed the way people do transactions over the web.

Now, people have the option to use Authorize.Net, PayPal, and more for paying for goods and services online. Even banks enable integration with different platforms, such as freelance websites, to ease the transfer of currency. Among those places which banks connect with are online marketplaces for physical and digital products as well as for services offered by freelancers and teams.

When using different online payment gateways or online payment processing platforms, all the parties involved can rest assured that their financial details are secure because of the stringent measures involved.

  1. Software as a Service

Software as a Service, or SaaS, is a method of accessing applications over the Internet. Since they are web-based, there is no need for users to download or install anything in their systems. Solutions offered in this manner can either be free with limited or basic features, or for a fee with multiple pricing tiers and variable tools and inclusions.

SaaS revolutionizes marketplaces because vendors have the option to integrate different applications to their selected e-commerce platform. This means that if they have cloud-based accounting, inventory management, shipping management, time tracking, invoicing, and similar software, they can connect this with the online marketplace if integration support is offered. Even digital marketing platforms can interface with digital marketplaces to augment the marketing strategies of vendors.

These solutions transform the way they interact with customers, especially when it comes to customer support. They also streamline back-office workflows, which allow vendors to complete orders quickly. As a result, they can maintain the trust of their clients and inspire repeat business.

Technology continues to evolve

New technologies are not going to stop popping up soon. Already, emerging tech are changing the way online marketplaces and their vendors operate to provide better shopping experiences for their customers and to attract more patrons. There are many options available in the market and it can be confusing to decide which one can benefit a business most. However, there are demos and free trials that vendors and freelancers can take advantage of. What’s more, there are even vendors that offer free versions of their apps, or offer completely free solutions. Entrepreneurs can try these out before they commit to a monthly or a yearly plan for a more sophisticated product.

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July 19, 2019