Marketplace as a new shopping search engine

By Yuval Ginor, Jun 22,2023
Marketplace as a new shopping search engine

With the growth in market share of online shopping, marketplaces are taking the lead from traditional search engines, offering sellers new business opportunities with a multi-channel marketing approach and defacto shaping the marketplace as a new shopping search engine.

Online shopping has certainly changed. Its market share - ever increasing - has seen tremendous growth in recent years. In 2022, for example, there was an increase of 8.1 percent in total retail sales compared to the previous year, with ecommerce sales making up 14.6 percent of the total worldwide sales in the same year, amounting to $5.7 trillion. But the online shopping world is undergoing another revolution. 

Up until a few years ago, Google had cemented its place as the go-to search engine, both for traditional search queries, as well as for different products. But some years ago, other major websites began incorporating their own search engines, based on the marketplace-type search engine.  

It took only a few years, but by 2018 Amazon surpassed Google for product searches, registering 54% of searches, signifying that users prefer marketplace search engines over traditional search engines for online shopping. The next phase in the growth of ecommerce was Covid-19. During the epidemic, and due to lockdowns and restrictions, online shopping has enjoyed a tremendous boom, as people began buying more and more online. Coming up to today, online shopping has taken root, and its constant growth signals its importance to online businesses. 

Marketplace Search Engines - Better Shopping Experience

There are three main characteristics of marketplace search engines that make them preferable to traditional search engines for online shopping in the eyes of users:

  • Straight to the Source - using a marketplace search engine allows users to cut the middleman, and get directly to the source - the sellers. Marketplace search engines thus  eliminate the need for going through dozens of Google results.  
  • Highly Personalized - while traditional search engines thrive to provide users the most relevant results for their queries, they are no match to the level of personalization offered by marketplaces. In the latter, users can search by a number of different attributes and values, and select only the ones relevant to them for highly specific results. 
  • Higher Quality - The online marketplace model calls for the sellers to stand in the front, and not the marketplace itself or any third party vendors. This means that it is up to the sellers themselves to provide shoppers with an exceptional shopping experience, if they want to distinguish themselves from the competition. This makes the marketplace a place where a good shopping experience and responsive customer relations often translates to success.

With the growth in market share of online shopping, marketplaces are taking the lead from traditional search engines, offering sellers new business opportunities with a multi-channel marketing approach:

  • Better Value for Money - instead of spending a fortune on ad campaigns to promote their online store on Google, in the marketplace model sellers only pay fees per transaction, and the high level of personalization in the marketplace enables them to reach their target audience more efficiently, without investing too much in advertising and SEO. 
  • Growth Potential - global retail ecommerce sales are expected to continue to grow and reach 24% of total retail sales globally by 2026. This is the time for online businesses to join the marketplace model, because the numbers show that shoppers obviously prefer it. 
  • Better Conversion Rates - Whether they are searchers or browsers, online shoppers visit the marketplace with an initial intent to purchase. This makes conversion rates in marketplace search engines much higher than the rates of traditional search engines. For instance, while traditional search engine conversion rates stand on an average of about 3%, Amazon reports 13% conversion rates for non-Prime members (and a whopping 74% for Prime members.)

Traditional Search Engines’ Response

Marketplace search engines are taking a big bite off of traditional search engines organic traffic, and the latter must react. Google Shopping is one attempt at getting into the ecommerce domain. However, there are two major obstacles standing in the way of the search engine tech giant taking over the marketplace search engine business.

First, as places of commerce, marketplaces are highly regulated and are expected to meet certain consumer protection requirements. These are not the type of things tech companies usually deal with, and despite having the resources, it is doubtful any tech company would want to delve into this area. 

Second, ecommerce requires a much more personal contact with users. Contrary to traditional search engines, when something goes wrong during an online transaction, shoppers need someone to give them a solution on the spot. Customer relations is a form of art eBay and Amazon have taken years to perfect. It is quite a task for a tech company, who is used to selling online ads, to begin taking on customer relations at that level. 

The Future of Marketplace Search Engines

The marketplace model allows sellers to conveniently collect valuable data, such as conversion rates, sale volumes, amount of time shoppers spend in certain listings, and more. Sellers can then use this data to adjust and optimize their listings accordingly.

The marketplace model’s rapid growth in recent years not only shows it is already a match for traditional search engines, but also hints at its full potential. Already marketplaces demonstrate significantly higher conversion rates than individual online stores that rely on traditional search engines. 

As the marketplace model continues to develop and expand its market share, it appears as if the role of traditional search engines will be further diminished, shoppers will have a more direct access to sellers through the marketplace, shaping the marketplace as a new shopping search engine.

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