The future of marketplaces

It is no accident that, the world over, vendors gather in marketplaces. You could ask why would all the fishmongers come together under the same Billingsgate roof to fight for their share of the customers?

The future of marketplaces

I was recently reading an article in the Economist about the challenge TikTok short videos are giving advertisers. The way consumers interact with the platform is less physically engaged than say Facebook or Instagram, so advertisers are not getting the feedback they require to get a handle on who they are and what they might like. These feedback loops are essential to tune your product lines, but equally important to finding new consumers. But it poses the question: are media platforms the right tool for the job in the first place?

It is no accident that, the world over, vendors gather in marketplaces. You could ask why would all the fishmongers come together under the same Billingsgate roof to fight for their share of the customers? Our own offices are in Hatton Garden, London’s famous street for diamond sellers – there must be 30 plus shops all selling exactly the same sparkly trinkets.  There are, of course, logistical benefits for this clustering, but it also creates a focal point to attract customers and a reputation for being able to get what you want at the best price. 

Town markets, supermarkets and shopping centres do the same.  These physical hubs provide a source for information about the market for both buyer and seller: prices can be adjusted, quality checked, new products tried, enquiries made, critiques offered, and relationships started and maintained.

In addition, they do their best to make the experience as pleasant and enjoyable as possible. From the simple pleasures of visiting a weekend market on holiday in France with is sights, sounds and smells of the fresh food and their sellers, to the buskers, coffee bars and food vans of our shopping centres. They have been so finely tuned over millennia that shopping has becomes a leisure activity in itself.  

Then, we go over to the digital equivalent eBay’s, Amazons and Esty’s and we are faced with a very rudimentary experience, indeed no better than cheap pound shops. Just lists and lists of products plonked on a page, gathered through their algorithms. Some you’ve browsed, some you’ve bought before and a load of stuff you would never want – who ever lingers on the landing page of any of these sites? Nobody. They are marketplaces, but are put together by a bunch of data geeks, not shopkeepers. Where’s the titillation and intrigue? Where’s pleasure and joy? Where is the ‘sell’? Well, it’s all over on Instagram and TikTok and all the other media streaming platforms. 

I do more shopping on Instagram that any other digital ’market.’ Its algorithms seem far more finely tuned than the others (when will YouTube realise I don’t like baked beans). No sooner have I mentioned to my wife at dinner the need for a new pair of sunglasses and the medium is flooded with them. Individual brands are doing a terrific job of presentation and navigation, and it allows smaller brands to come to the fore. However, in my view, it has tipped the balance in its ratio of ads to posts and has become more of a shopping experience than an entertainment one – and that’s not why I’m there.  

This development is clearly an extension of the relationship advertising originally had with TV, moving into the digital realm with the addition of e-comms being bolted on later, thus turning ads into retail. But it’s not a marketplace. It’s not where we go to browse and shop. We can’t search or compare in these spaces. We can’t ‘cluster’ shop like buying an outfit or ingredients for dinner. We really need other places to go and shop, and brands need places to gather. It’s all very well me clicking on a T-shirt brand on Instagram and being presented a dozen alternative brands, but once I bought one, I don’t want to see more and more of the same clogging up my app; and, by the way, I might actually want jeans to go with my T! 

Clearly, Amazon and eBay could do a whole lot better. We have successful equivalents like Harrods and Selfridges, who purvey ‘shops within shops’ within these behemoths and the likes the clothing site Net-a-Porter without. If these are the hyperstores and department stores in the digital space, where are the equivalents of the Hatton Garden diamond district or the Borough specialty food market? These are markets built and nurtured by the smaller and midsized shop keepers themselves, and they are places where brands can sell their wares, interact with customers and gauge the market. They are attractions in themselves and a pleasure to attend. They are places to sample, try on, linger and browse. They are also the spawning ground for future big brands; where new brands can find exposure, develop their offer and build momentum.

It must be lonely starting up a business at the kitchen table without interaction with your peers, even if they are your competitors. Director to consumer, subscriptions and even closed loop sustainable systems, have provided the ability to interact more closely with your current consumers, but knowing where you fit in the market and finding new customers is equally important. You are difficult to find on your lonesome, but huddled together with you fellow shopkeepers you will draw customers like a magnet. It may feel more exposed, more challenging and competitive, but ultimately being in a marketplace will be more rewarding. 

It does feel like there is a gap in the markets. 

Nick Dormon
Nick Dormon

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