Will the marketplace strategy shake up the financial services industry?

As we all head to marketplaces to pick up those last minute gifts for Christmas, it seems like a good time of year to talk about the growth and shake up of the financial services industry with market place strategies. Online marketplaces are fast-becoming the favourite destination for online shoppers, with almost 70% of Australians visiting an online marketplace or auction site like eBay or Amazon every month. Marketplaces have boomed in recent years, growing by 74.8% in 2017 alone (Roy Morgan research Jun 2018). With the increased uptake of marketplace sites like Etsy, Uber and AirBNB we have to look at the reasons why these sites are so popular with consumers. What are the benefits of creating an online marketplace?

The marketplace model is based on carriers realising you cannot be the best at everything and resources are too scarce to keep up. In the marketplace model, brands give their customers access to third parties with the best products, the most pleasant customer experience and the lowest costs.

The marketplace business model cuts both ways. Customers get continuous access to the best products and services in the market and costs can be kept at a minimum through connecting (or disconnecting) parties almost in real time to key in on new customer wishes and anticipate other market developments.

Retailers such as Catch and Myer have recently opened marketplaces, recognising the benefit of increased customer traffic and expansion into other categories.

myer market place

“It’s about enabling customers to move freely between brands, channels and product solution,” says Suncorp’s chief executive for Customer Marketplace, Pip Marlow. Suncorp Australia has recently launched a $100 million digital marketplace platform. Users can now view all banking and insurance products in the one online portal from all their brands – Suncorp, AAMI, GIO, Bingle, Shannons and Vero. “We really wanted to move to a level of aggressive transparency across the brand, making sure customers knew what was available to them – and had that choice as part of it.”

suncorp marketplaceThis marketplace model is in direct contrast with the strategy of other financial brands such as Commonwealth Bank and Westpac, which is to keep customers contained to the one brand.

Monzo, Starling, N26 (challenger banks) and TSB are all launching a marketplace offering. This banking business model is on the basis of shared value where the provider creates value for the customer. Value is passed to the customer and the provider takes a referral fee from the beneficiary. Examples include foreign exchange fees, switching energy providers and switching telco providers.

N26 has partnered with TransferWise to let customers make foreign currency transfers, and with vaamo to make investments, all from within its mobile app.

n26Starling Bank recently launched its current account, the only product it will build in-house. Through its marketplace it will give customers access to P2P loans, investments, and has partnered with TransferWise. In the longer term, it plans to offer customers a choice of multiple products in each sector, and to partner with companies in the retail and lifestyle sectors.

starling bankOther companies adopting the marketplace model are Amazon, who is looking to offer bank accounts and already offers loans, along with Google, Facebook and Apple who either have banking licenses or are looking to acquire one.

The big sell for marketplace is that the customer journey and experience is both a satisfying and convenient one allowing for easier navigation and management from a central location. This new approach offers more competition through transparency, choice and better pricing.

We see marketplaces playing an even bigger role in the future.

Who will be next to implement this strategy?

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Online retailers take heed: Want consumers to recommend you? Well give them more options to purchase

As we neared the end of 2013, it was predicted that Australians would spend $30 billion over the festive season. This total was well exceeded with an estimated total of $42 billion being spent, according to the Australian Retailers Association. During the post-Christmas sales (Boxing Day to mid-January) it is predicted that a further $15 billion will be spent (up 3.8% from last year), showing that the retail sector is indeed booming.

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Telcos embrace the retail eCommerce market with mixed success

It was only a few years ago that telecommunication businesses were often spoken about as slow moving elephants. But the technological revolution and the deregulation of markets have turned a once slumbering business into one of the fastest growing in the world. Whilst we generally categorise telecommunications as its own industry, when we look at their websites we can see that they are embracing similar online business concepts as the e-retailers, making way to address the fast pace of consumer demand.

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How to make online purchasing simple and straightforward

Say that your website has successfully serviced the needs of a prospective customer and the customer has successfully matched your products to their needs. The customer is now happy to proceed to purchasing online using your website.

It is a matter of fact that if the online channel is selected the majority prefer to finish the interaction in this channel – whether that includes a little online help or a quick phone call to confirm some details.

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More than a third of consumers looking to purchase a laptop online remain open to be influenced

At a recent Global Reviews Online Retail Webinar specifically looking at the process of purchasing a laptop online, attendees were presented with some insights around the awareness to consideration phases of the customer’s journey.

The Global Reviews Shortlist Report found the following key insights:

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