The Future of Marketplaces

the art of the cash register

The Apple iPod came out a month after September 11th, in 2001, in October. It was consider groundbreaking for its marketing power: “1000 songs” was WAY easier to understand than how many megabytes of storage an MP3 player had on board. But, if you ask me, the iTunes store is the big story.

Why? Because it put a one-click marketplace with a very low-friction sales channel directly into our hands, attached to a device that willingly sucks up the purchases and plays them to us at our whim. The iTunes store was one of the first brilliantly distributed marketplaces because it was a simple management app that morphed into a simple sales tool.

One last thing about Apple before I move on to talk about the future of marketplaces: have you been to the Apple Store lately? If so, you probably bought something. Notice the credit-card-readers-on-the-phone trick? Well, that’s part of the story, too. The sense of doing transactions without eating up space for registers is part of this.

So, let’s talk about my thoughts on the future of marketplaces.

Marketplaces Will Be Distributed

In the old days of podcasting and videoblogging, pretty much no one could make money directly from their podcasts, because they were using old CPM advertising models on their main website, and very few people had the urge to click over to the primary site, and then click an ad. In the old days, distribution was the devil, because if people weren’t going to the primary site, they weren’t getting the potential to have eyeballs and maybe cost-per-action (CPA) deals.

In the new world, the marketplace (different than advertising, but stick with me) is distributed. We sell where the people are. We put the opportunity to buy where they might actually want to make use of it. Want a real brick and mortar world example? Red Box puts DVD dispenser units at grocery stores and airports, where someone might have the urge to rent a DVD. BestBuy has gadget vending machines at airports, filled with things that travelers might want.

The future of marketplaces will continue that trend outward, using things like affiliate marketing to spread the potential to buy out to where people are looking to make the transaction happen.

Marketplaces Will Be Mobile

On one side, I’m thinking about payments. PayPal has a whole new mobile payment suite. Square allows one to accept payments via one’s mobile phone. ( See also) The world has shifted to make it easier for someone to accept many payment options as a merchant, and now, to accept them from mobile transactions. Look for more and more mobile wallet type opportunities to extend in the coming years. Look also for micro-funding opportunities to blend a bit more with mobile in some interesting ways.

On the other side, the opportunity to purchase things will be made a lot simpler for mobile devices. We’re only just starting to see this. What we currently have are amalgamated moments when someone will see a really well-designed mobile website, or an app, will want to purchase something from the site, and then will be flipped into the laptop-style version of the purchase funnel. I think that the whole “opportunity to purchase” part of transactions will be much better executed via mobile devices shortly.

One last note on mobile: the whole RFID, QR, Bluetooth, near field communication thing will still be up for grabs with regards to how it best serves the marketplace.

The Marketplace Will Be Integrated

In the 50s, we had advertisers that were very embedded with our shows. In recent years, product placement has grown and grown in mainstream movies and to a lesser extent on TV. In the next little while, the online space will do a lot more to integrate marketplace opportunities with our content and community opportunities. The big blogs do sponsored posts, but those are just the tip of the iceberg. Think more of that Oprah-level experience of giving everyone in the audience a Ford. There WILL be a lot more integrated marketplace opportunities in the coming years.

Projects like sponsored content communities like OPENForum from American Express, are just the beginning.

The Marketplace Will Be Weblocal

In the next few years, there will be a HUGE push to help more local people selling on the web in a much nicer fashion. We’ll also have the other opportunity bridge: to promote local business via web projects, such that people become educated and enamored with a real world marketpace. Showing people your local farmer’s market will become an opportunity for the local community, plus a great opportunity for web-to-physical bridging.

We’ll see a lot more done with location-based-applications. I tend to downplay Foursquare, but it’s because I think Foursquare is to location-based technology what AOL was to the Internet (the old “You’ve got Mail” AOL, not the Huffington Post).

The Marketplace Will Be Global for the Little Guy

We’ve read about outsourcing forever. We’ve read about the chance to buy virtual assistant help from India or wherever. That’s just the start. The marketplace for products and services and supplies and labor and much much more will be thrown open to small business types with every bit as much fervor as the big companies experienced in the last few decades. That means that a solo business might find themselves sourcing product materials or parts or foodstuffs from someone on the other side of the world far more frequently than is happening right now.

One change will be improved marketing of these opportunities. For everyone who discovers something like the Oriental Trading Company for retail of toys and party favors, there will be plenty more chances to source products, materials, foods, and the like from other places, and in a way that makes for interesting new business opportunities nearby.

The Marketplace Will be Subscription and Ecosystem Minded

I talked about this the other day in the Future of Media post, saying that things like books will be sold with subscriptions in mind. I feel that way about a lot of goods. If you sell me wine of the month, what else could you add to my monthly purchase ecosystems? There will be more and more partnerships and distribution projects and other ways to “bundle” services or products, such that marketplaces look at me as a total sales opportunity, and not just a solo product transaction.

Your Thoughts on the Marketplace?

I’m very interested in your thoughts on the marketplace. That’s the whole buying and selling of things and how it might change. YOUR take will be very interesting. I’m grateful for your time, too. Thanks!

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  • Kenny Rose

    They have been talking about global business for nearly two decades. The political and technological frameworks were not in place to make this a reality. But you could see the future and how it looked. At this point we have every thing at our finger tips the difficulty for most entrepreneurs is putting the package together in way that adds value and makes sense for the consumer. The people who manage to see through the fog and access and develop eco systems that solve some of the problems are the ones who are going to be successful. But tied to this is social responsibility. Consumers for the most part don’t want to buy from companies with no social conscience. There has to be a philosophy of trust, authenticity and acknowledgment that while you build a business for the present there is a responsibility to make sure future generations are not sacrificed on the basis of profit motivations that are intrinsically selfish and not in their interests. For me the important thing is to keep reminding yourself what your children will say about the world you have built for their future. I am a Capitalist with a heart. We have to bring the heart pack to business instead of focusing on ruthless competition and closing out markets. Open innovation and partnership is the only way to build a business. Businesses who don’t get this and get ahead of the curve will wilt and die.

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  • http://www.socialmediamercenary.com Leslie A. Joy

    It might not be as futuristic as some of your other ideas, but I’m predicting that we’ll see more of “If you like this, you might also like this.” Not just online, like Amazon does, but also spreading to stores. When I worked retail and ran a department, I was forever trying to get away with cross-merchandising and suggested items because it works so well. Unfortunately, the corporation I worked for didn’t have the same forward-thinking, this works for Amazon for a reason attitude that I did.

    I’m thinking that more sites will do it, both with their own products (like Amazon) or through partnerships (like the Google Apps Marketplace if Google made a cut from the apps based on people signing up through the marketplace.) I’m also thinking it will spread and become much, more common place in in-store displays (example: displays that have baking mix and baking pans on them).

    You’re absolutely right about the app stores-they work for a reason. One-click ordering makes it so easy to impulse shop and when combined with the “if you like, you may also like” thing, you’re looking at easy extra money. (I don’t even want to think about how much I’ve blown on books on Amazon that way-and I’m one who usually evaluates purchases and prices in-store.)

    I can easily see books being sold with subscriptions in mind-especially since many authors of self-published ebooks are doing this already. At the rate information is updated and changes, and the ease of digital distribution, this could be really viable.

    What strikes me as most interesting, is when you combined aspects of different segments from each post across the series. For example, looking at the change of work (more web based, such as more businesses using things like Google Apps, or even sticking with Microsoft Office, but making more use of Windows Live), combined with the rise of app stores (Google Apps marketplace for example), combined with moving towards more mobile media (training could include more video/podcasts/etc. that can be listened to individually). When you tie it together, you have businesses using Google Apps to do more project-based work so they can have more of a global presence, while having virtual teams connected through mobile devices and sent training updates using apps like SlideShare through the Google Apps Marketplace for more interactive training that they can view through they’re mobile phones.

  • http://www.socialmediamercenary.com Leslie A. Joy

    Didn’t mean to turn my comment into a mini-essay. Waaaay longer than I planned.

  • http://www.experiate.net Paul Flanigan

    This all boils down to the individual and the experience. Technology has made it easy to sell something (I can buy a couch on Amazon while sitting on a bus). But the personalization of the buyer/seller transaction – the experience – is where the real value is. It’s not enough to just sell something, you have to create a moment that people share, like, “I bought a couch on Amazon while I was taking the bus this morning!”

    All of your points move toward this. And that is a very cool place to be.

  • http://www.experiate.net Paul Flanigan

    This all boils down to the individual and the experience. Technology has made it easy to sell something (I can buy a couch on Amazon while sitting on a bus). But the personalization of the buyer/seller transaction – the experience – is where the real value is. It’s not enough to just sell something, you have to create a moment that people share, like, “I bought a couch on Amazon while I was taking the bus this morning!”

    All of your points move toward this. And that is a very cool place to be.

  • http://www.seocompanylimited.com Alex

    Chris, I totally agree with you an in future market will be fully “Mobi Market” from searching a service providers or to sell your products. People will love to use specialized marketplaces to ease of convenience & quality output at the end.

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  • http://twitter.com/alanweinkrantz Alan Weinkrantz

    1. More barter. Less taxes. Less government control and waste.

    2. “Work’ should be a marketplace that includes the ability travel and work in process and you are stimulated by new scenery and cultural vibe.

    3. Marketplaces should be places to just help because you want to.

    4. Sharing and being discovered on the social web should be part of anyone seeking to create a marketplace.

    5. Shut down your business today and re-open it tomorrow as a media company that happens to…. be a baker, a candlemaker, shopkeeper, butcher, rock star, doctor, accountant, architect, consultant, PR dude… or whatever.

  • Alex Luken

    I find that while I’m inclined to make certain purchases online because of the ease and variety of selection, it requires me to be more patient in ordered, as there is most often not the immediate gratification of local retail purchasing.

    I recently had no choice but to purchase a futon online because I couldn’t locate a store in my community that sold a decent selection of futons. The search experience to locate local merchants borders on disaster, and I have pretty good search capabilities. It took a lot of time to locate an online merchant, compare prices, etc. My experience with Futon Creations was great. There was something about the experience that was reminiscent of the “Wells Fargo Wagon” scene in the Music Man.

  • Alex Luken

    I find that while I’m inclined to make certain purchases online because of the ease and variety of selection, it requires me to be more patient in ordered, as there is most often not the immediate gratification of local retail purchasing.

    I recently had no choice but to purchase a futon online because I couldn’t locate a store in my community that sold a decent selection of futons. The search experience to locate local merchants borders on disaster, and I have pretty good search capabilities. It took a lot of time to locate an online merchant, compare prices, etc. My experience with Futon Creations was great. There was something about the experience that was reminiscent of the “Wells Fargo Wagon” scene in the Music Man.

  • http://raulcolon.net Raul Colon

    I have to agree each and every day I buy from what seems to be more convenient. Itunes and the App Store are some great examples. I am not a big fan of buying games but since I bought my Ipad I started buying many apps including games. Just the fact of choosing the game at any moment any location with a few clicks made me to buy in a larger volume.

    I really want to see many companies adopting these models to make sure people can actually focus more on the customer experience and not on other parts of the business. There is nothing better than an Apple employee giving you the option to buy something and charging you there on the spot no waiting in line just a simple process that makes it extremely hassle free.

    I wonder if we could set up a similar process for restaurants where the waiter can charge you right there on the table you got your meal, service from the waiter, he charges you right on the table and you are on your way. Less time for the waiter to be away from the patrons with the opportunity to get as much feedback as possible.

    I think if these new systems are used correctly they will bring a huge advantage to improving customer experience from many aspects.

  • http://socialdeviants.blogspot.com/ janet

    I’m loving this series of blogs on educated predictions.

  • http://pulse.yahoo.com/_UFANH2QQ335S377AVEKIG7VT7Y Jason Martin

    I believe the online marketplace could (and should) make the brick-and-mortar retail experience less of a hassle for those who prefer to touch and experience a product before purchasing it. One example of this is on websites, like Best Buy, where you can purchase the product and then pick it up at the store. But even that model is a bit flawed and incomplete. Online stores with physical locations should 1) allow customers to go to their website to check real-time product availability at the stores, and 2) allow them to HOLD the item for 24 hours (give or take) to visit the store and decide if they indeed want to purchase the item. I realize #2 would make for a lot of false-alarms in the way of people holding items and never visiting the store to check it out, but then again I wonder if this option would encourage more in-store sales for those who fear the item would not be available (especially in-demand ones) if they didn’t have the hold option. This would also satisfy those who don’t want to transact online but still want to make the purchase. I’m sure this idea would need some tweaking, but am I on to something??

  • http://www.monemaking.com Lee Fecteau

    Thanks for making us aware of Paypal’s Square. I was not aware of this new technology offering from them.

  • http://www.margieclayman.com Marjorie Clayman

    This is a really great series, Chris. Mad props to you, sir.

    I wonder if bartering will come back – not necessarily product for product but rather service for service. I think it’s already kind of developing out there but maybe in an informal way. You make a website for me, I’ll help you promote your business over here.

    Do you think that will become a major player in the marketplace of the future?

  • Kradr2

    Chris,

    If what you’re saying is true – which is clear – then isn’t this necessitating a huge demand to simplify and secure our online identity?

    In other words, in place of having a kazillian number bank accounts, passwords, record numbers ad finitum, we could have one fool proof encrypted number for everything that would simplify all our transactions…. I believe this will illuminate a huge about of digital slug , repetition and stress.

  • http://twitter.com/susangiurleo susangiurleo

    Loving this series..I have to read, think, then comment : )

    So, my sense is that in the future the marketplace will sift down to this: mobile/integrated/international or hyper local, highly personalized buying experiences.

    Raise your hand if you hate going to the mall. We went earlier this week to shake off cabin fever over school vacation and the whole time I resented the process of driving there, parking, waiting in lines. The stuff we bought (at the Gap and B&N) totally could have been purchased online. But I did it for the experience (as unpleasant as it was).

    As more people plug in and more goods can be easily purchased with a click, people will still want marketplace experiences…so those who go hyper local, highly customized (either to local or to product, think Apple) and give amazing personalized services will thrive, too. The more of a unique, positive experience people can have (online or off) the better the bottom line…

    But the generic marketplace will wither because it takes just as much money to be generic as it does to be unique (the dividing line is creativity and execution) and those who go the extra few steps will eventually set the bar high enough that the competing industry members either keep up or give up.

  • http://www.purplestripe.com Lynette Young

    This is timely for me & my company for a lot of reasons… thanks for the ammo ;)

  • http://twitter.com/larrylanier Larry

    Hey Chris,

    My take:
    1. To do the Apple trick is to be “Simple and Deeply Fulfilling” at the same time.
    2. The Market Place will be “Very Personal and All Over the Place” at the same time.
    3. The Locals opportunity to have “Global Reach and Preach on Main Street” at the same time.

    Thanks Chris, I got it.

  • http://twitter.com/larrylanier Larry

    Chris has a must read and interesting take on our future markets

  • http://twitter.com/larrylanier Larry

    Chris has a must read and interesting take on our future markets

  • http://www.realestateactive.com/ Michael Real

    The marketplaces will be mobile. That is certainly true! With the iPhone being credit cards is the beginning of everything. just a few years later and we will visiting the stores with our iPhone.

  • http://thoughtsaboutnothing.com @kylereed

    Wow, I love these type of post. It makes me excited for the future and the blank canvas that is the marketplace.

    I agree with you on the ability of things like Square will be valuable tool in moving forward in the marketplace. I still jump on the bandwagon of foursquare. I do agree that there is so much more that can be done and capitalized on and that others will come along and fill that gap. But the opportunity to have others “bid” for your service all from your phone seems to me what “could be” the next marketplace.

    I also have really been enjoying your stuff about pay subscriptions etc…that has challenged my thinking on blogging and email subscription writing.
    This week has been one of my favorite weeks on your blog. Looking forward to tomorrow.

  • Jack Lynady

    Chris, loving this series. I hope u do one on the Future of Education. There seems to be a disconnect there. Would love your thoughts on it. Keep bring it. J

  • http://twitter.com/VickiFrost VickiFrost

    Great post! I agree with your local premise and I think it is just a matter of expectations. I expect to find everyone’s information on the web, even if you’re down the street. The PTO doesn’t talk, we tweet. There will be no yellow pages, it will be on line. So in addition to promotion, local businesses need to become more savvy in using the web for communication even if there customer is down the street. Again, reduce friction. Be where people are.

  • http://twitter.com/NancyD68 Nancy Davis

    The marketplace is becoming much more global. Outsourcing is now the norm in many businesses. In our small company, one of our partners (and some of the IT staff) are based in Columbia. Not only do we have access to people we would not have if we insisted on everyone being local, we also have other opportunities to do business elsewhere, because of this.

    • http://twitter.com/luchito Luis Jimenez

      Is that Colombia, Nancy?

    • http://twitter.com/luchito Luis Jimenez

      Is that Colombia, Nancy?

    • http://twitter.com/luchito Luis Jimenez

      Is that Colombia, Nancy?

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  • Janet Morgenstern Passani

    As a marketer, I see and often use trial as part of the marketplace experience whether it’s online or in-store. Online examples include free downloads or 30 day trials, and off-line it’s in-store sampling or complimentary services.

  • http://mediamobz.com/ Pablo Sanchez

    “The marketplace will be subscription and ecosystem minded” – High value/low cost front end products leads well into subscription based systems. Love the Future series Chris. -Pablo

  • http://mediamobz.com/ Pablo Sanchez

    “The marketplace will be subscription and ecosystem minded” – High value/low cost front end products leads well into subscription based systems. Love the Future series Chris. -Pablo

  • Wordorama

    Disturbingly, from what I’ve seen so far of outsourcing labor, as with other aspects of global trading, is that it’s great for facilitating exploitation. Those who are the most desperate/have nothing to lose are willing to perform services for peanuts, because there are no international legal (or moral) standards for what constitutes fair pay. Checking out some of the jobs and rates offered, I feel like I’m watching a bunch of noblemen throwing bread out of a cart, laughing and applauding their own generosity and fairness, with a total lack of concern that these beggars are trampling over one another in their rush to grab the crumbs. How do you see the global marketplace dealing with this issue?

  • Wordorama

    Disturbingly, from what I’ve seen so far of outsourcing labor, as with other aspects of global trading, is that it’s great for facilitating exploitation. Those who are the most desperate/have nothing to lose are willing to perform services for peanuts, because there are no international legal (or moral) standards for what constitutes fair pay. Checking out some of the jobs and rates offered, I feel like I’m watching a bunch of noblemen throwing bread out of a cart, laughing and applauding their own generosity and fairness, with a total lack of concern that these beggars are trampling over one another in their rush to grab the crumbs. How do you see the global marketplace dealing with this issue?

  • DaraBell

    TheAfterthought
    My gut tells me Outsourcing will be hard to stomach in an time of mass unemployment, I feel engagement platforms that allow co-creatrion will be the future.
    #Justsayin

  • http://twitter.com/bradm262run bradm

    Superb post! The changes in the marketplace will create an evolution in the decision making process of the shopper; major shifts in time and place, when and where. Far more opportunities/risks of impulse buying as convenience increases. It will be even more important for merchants and marketers to understand the intent of their customers, to inform them, share information and build trust. It will be extremely important to include them in the buying process as partners and not simply use them for a quick transaction.

  • http://netpunch.co.uk/ JJ

    Great post and I agree 2011 will be the year we go MOBILE!!! I cant wait it represents a huge opportunity for us to make life easier…

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  • Anonymous

    I agree. My vision of the office hybrid reinvents where people work but is tied into the places that are available to them. My company strategy is “Everything you need to work, everywhere you need it to be” around the corner or around the world. Through our platform we are bridging the gap between the virtual and physical office. You pay for office use on-demand and pay-per-use. We will be the “little caesars” of workspace. Hot and ready when you are and just $5

  • http://www.todayhaspower.com Rob

    I know I’m late on this. But, the marketplace for Borders changed (and they stayed put).
    What will be the outcome?
    Will there be a surge in small book stores with comfy couches and pricey coffees to meet a need?
    Or, will bricks and mortars succumb entirely to Kindle and the like?
    Or, will home book clubs be the ‘new thing’? Stop by my place this Wednesday and peruse my stuff and I’ll be over next Wednesday. Maybe libraries will become popular again. Maybe we’ll meet at Starbucks with our Kindles:)

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  • http://www.traders77.com Blueandys

    Mostly I’m agree with ur articles Chris, but could u give me (maybe us) some example of action that we should take to face the market? I know market change everyminutes (perhaps in second) and we should face it. But how?