The History And Evolution of Retail Marketplace
The history of the marketplace appeared alongside the agricultural revolution and the primary specialization of labor professions in ancient societies (into peasants vs. artisans) and the emergence of commodity production, the emergence of an excess of handicrafts, and agricultural products.
What is Marketplace? 🛒
A marketplace (the market for short) is an area where basic supplies are sold, generally nutriment.
The markets are made up of individual stalls that offer products of various kinds, with a predominance of fresh products: meat, fruits, vegetables, marine food, among many merchandises.
Usually, they are installed in the center of neighborhoods or towns.
A Tour in The History & Evolution of Marketplaces 💬
Marketplaces’ evolution journey is not as recent as a Facebook marketplace history! Marketplaces survived as long as humans have traded goods and services. Bazaars (Persian), souks (Arabic), and marchés (French) are all examples of marketplaces, and the concept is the same across an open or public location where things are bought and sold.
Marketplaces developed from a typical analog form to a more digital state throughout the ages, opening up a plethora of chances for enterprises and entrepreneurs. As technology advances, the value-add of digital markets to enterprises becomes clearer:
- Enhance and improve the customer experiences.
- Boost income potential by shortening sales cycles.
- Increase your brand’s visibility and market reach.
Marketplace development has changed company processes and, in some cases, completely upended whole sectors. Let’s start by looking at the many marketplace models that exist now to see how this happens:
Physical Commodities and Products Marketplaces
Products and tangible things that may be purchased, sold, or traded on marketplaces can be delivered wholly offline through brick-and-mortar storefronts, online through integrated eCommerce, or in a mix of online-offline distribution.
The least developed are offline markets, which still closely mirror how commodities have been acquired for millennia. People prefer to try on clothing in person before buying them or evaluate the quality and freshness of food and fine goods personally. Offline markets address these demands and function as a primary gathering point for people to sell and buy items.
During the boom in the 1990s, online marketplaces were created to decentralize the trade of products and make the process more efficient. In 2018, Amazon, eBay, and Alibaba, three of the most well-known corporations in this market, produced combined revenue of $296 billion. Consumers are no longer limited by geography, hours of operation, or access to sellers. The globe now has access to an infinite number of product categories from any device, at any time.
💡 Relevant article: Boost Sales with These 10 Checkout Counter Ideas
On-demand Needs Marketplaces
In the year 2000, we entered a “digital economy” with the arrival of smartphones and wireless internet. Technology became more accessible and standardized than ever before, resulting in a digital revolution in every sector. Examining the time it took different technologies to achieve 100 million users is one approach to show this. It took 75 years for the telephone to be invented in 1896, two years for Instagram to be introduced in 2010, and one month for Pokémon Go to be created in 2016.
These were places for customers to instantly meet a specific demand – whether it’s transportation (Uber), lodging (Airbnb), or eating lunch (UberEats) – by connecting with each other online. We witnessed the creation of the “shared economy” during this time, which allows individuals to share unused personal resources for a price.
Regulated Services: The Next Generation of Marketplaces
According to Andreessen Horowitz, the next phase of the internet will be about redefining the service economy. A fully integrated online experience would be entirely technologically driven, with no manual or analog elements. Legal services, real estate, health care, financial services, and insurance are some of the businesses that employ this approach.
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We aren’t quite sure of the point of what many call the fourth industrial revolution, but we are on the edge of a significant change in how our clients engage with and interact with the digital world. Understanding the benefits of digital markets and what organizations and business leaders can do now to guarantee they are prepared for the future will be critical.
💡 You may like to read: What Is Workflow Automation? And How to Use It to Improve Your eCommerce Store
Retail Future: 6 Important Retail Statistics
The above short exploration through the history of the marketplace shows how changes in retail and eCommerce have affected the way people do shopping, because as people’s lifestyles and needs evolve, so do the way they shop and buy.
The following statistics can provide some forecast on the future of retail:
#1. Online Retail Sales Amount to $4.9 Trillion in 2021
According to Statista, this number is expected to climb to $5.4 trillion in 2022, and the behavior of spending in retail shows us the facts of consumer behavior in a given economy. This figure is forecast to grow by 50 percent over the next four years, reaching about 7.4 trillion dollars by 2025.
During the recession, spending goes down and goes up when people are more confident.
What’s even more important is the fact that not all retailers are seeing a boom, because if they are not keeping pace with technological advances and customer needs, they will be closing sooner than they expect.
#2. Digital/mobile Wallets Are Used by 44.5% of Shoppers 📱
Nearly 45% of buyers are using digital and mobile wallets as a payment method, the share is expected to increase by +50% in 2024, (according to Statista).
Usually, people turn to the physical store after they have navigated it online.
Now, people also flood suburban malls very quickly, which holds technology as the main reason to fuel change in the world of retail.
Moreover, people are using their phones not only to buy but to research and compare the items’ prices.
This could be informing retailers to focus on mobile advertising and enhancing the whole mobile shopping experience for enthusiastic consumers.
#3. Retailers’ Expenditure on Ads
According to eMarketer, US retailers’ expenditure on digital ads is expected to be $28.3 billion in 2021, this is a normal result of the above statistics, as retail marketers are now focusing on where customers are searching and looking up the information they need.
Naturally, digital ads constituted 21% of the retailers’ ad expenditure in 2020 and will grow to 25% in 2021.
💡 You may like to read: Virtual Shopping: What Is It? And How to Use VR Shopping in Retail Stores?
#4. Brick and Mortar vs. Online Sales 4:1
According to U.S. Department of Commerce Statistics, eCommerce sales made up 14% of total retail in Q4 2020.
People still prefer shopping at brick-and-mortar stores. That’s why physical shops still have the bigger share of sales so far. Although eCommerce growth is continuously ongoing, it didn’t replace brick and mortar, which got 80% of sales in 2021.
The secret to a winning combination is having both an eCommerce and physical store that complement each other seamlessly.
#5. eCommerce Market Share
People are not letting go of the in-person shipping experience any time soon, but we cannot deny that the eCommerce retail market share in 2020 reached 18% of total retail sales, and will grow to almost 22% in 2024.
Such knowledge can enable retail owners to better integrate online and offline channels for a better overall shopping experience.
#6. Why Are More People Expected to Buy Online? 📱
54% of consumers now expect to shop 24/7, thanks to online shopping. This says something important about the relation between changing customer behavior, and their expectations.
Previously, retail stores provided shoppers with the experience of directly interacting with the products they need. Consequently, they admired malls and had the expectation of the presence of whatever store they needed in a single location.
Finally, came the rise of the big box stores that provided customers with everything they needed at quite attractive discounts.
Today, with online shopping, a new pattern is emerging; where people now expect to shop at any hour of the day from the convenience of their chair, desk, or even bed.
Impact of eCommerce on the Retail World 🛍️
Switching to online shopping, even before the 2020 epidemic, was the most irrefutable shift in shopping behavior.
Businesses who are doing great take note of the oncoming trends, while understanding the impact of eCommerce on retail to be better equipped to compete boldly, and fulfill the needs of their customers:
#1. Customers Are Shopping for Almost Everything Online 👨💻
Multiple commodity lines have been drastically challenged by eCommerce, for the last 20 years ( e.g. ebooks, and electronics), while others, such as the clothing industry, took longer in their migration to online stores.
The ease and convenience of shopping online are becoming more and more attractive to the American customer, that’s why interesting statistics are on the rise:
22% of clothing sales, 30% of electronics carried out online. Unsurprisingly, according to Forbes, grocery sales made a 210% increase in March 2021.
The above statistics are going to introduce new trends, where major companies such as Kroger, and Walmart are making products to be available online, something Amazon has very well mastered for a while now.
#2. Online Shopping Statistics 🛍️
In 2020, over 2.0 billion people worldwide are buying products and services online, compared to 1.66 billion online shoppers in 2016. The number will rise to 2.14 billion in 2021.
That’s why it’s crucial to take your store online, as adopting a brick-and-mortar store along with an online one is an effective formula for effective competition.
#3. eCommerce Pushed Businesses Online, but Not Completely
Because people still opt to walk into a store to see and feel the products they are buying, and that’s a reason physical stores will be around for more time. For example, people still prefer to buy most of their products at the store and buy only specific products online.
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In Conclusion to History of Marketplace
People have advanced from the simple barter system to more sophisticated yet easier retail experiences, their expectations more every day from the brands in terms of convenience, efficiency, and shorter delivery times coupled with appealing discounts.
However, they are willing to pay more for brands they love and satisfy their needs.
Obviously, the 2020 epidemic is accelerating the predictable digital interruption of traditional retail.
To avoid bankruptcy and getting out of business, many brick-and-mortar stores were obliged to radically alter their activities.
Sadly, nearly 1 in 5 had to liquidate their physical stores permanently.
