COVID-19 isn’t solely to blame for the decline of the mall or brick-and-mortar industry. Rather, COVID-19 simply accelerated an already-existing trend. In 2017, a report from Credit-Suisse had already estimated that 20 to 25% of malls would close down by 2022, due to the closure of stores within the malls and the general decrease in foot traffic.
This declining trend is also due to changing behaviors of consumers, who have preferred online shopping more than ever due to the abundance of options and the ability to compare stipulations such as price, shipping time, and otherwise. COVID-19 has only solidified this behavior, by rewriting the script as to how consumers make purchases and orders, and showing them how easy the click of a “buy now” button can be. “The indoor mall is an anachronism that is going to continue to fail because it is disconnected to how people want to live their lives,” Rick Caruso, the real estate developer of The Grove in Los Angeles told Forbes last year.
Now that most malls have been shut down due to the virus with little hope for mass reopening within the coming year, the focus on e-commerce marketplaces has heightened – but these marketplaces must grow in the right way to ensure fairness on both sides.
Appeal Of Switching From Mall To Marketplace
Beyond the experiential aspect of a day spent at the mall, perhaps the most alluring draw of a mall’s set-up was the number of options available to a shopper. This is what makes e-commerce so enticing. When a consumer takes to Amazon, Etsy, or eBay to make a purchase, a simple search for any item, such as a visor for example, will yield thousands of results.
In addition to an abundance of options comes an abundance of information. Not only are there more search results on e-commerce marketplaces – there are more real customer reviews, photos, and product descriptions. Sure, you could ask a store representative how other customers like the massage chair you’re considering and read the back of the box, but there’s a new level of purchase security when hundreds of reviews are at your fingertips. A local consumer review survey reported on BrightLocal shared that 84% of shoppers actually value online reviews as much as they would a personal recommendation. Since we know shoppers make purchase decisions emotionally, this is a compelling statistic.
Then there are smaller conveniences: rather than commuting to a retail store, pressing the order button and waiting for the product to show up on a front doorstep is compelling for consumers, especially with the e-commerce giants boasting faster ship times, like Amazon’s ‘Next Day Shipping.’ And while some may think that consumers would prefer to see the product in-person before making a purchasing decision, the studies say otherwise – 78% of online shoppers don’t look at a product in-store before ordering it online, according to Invesp.
Marketplace Versus Store Websites
Consumers also have a slight tendency towards online marketplaces to begin with. Sure, if they have their favorite store, it’s easy enough to order online. But, if they’re not quite sure on the specifics of what they’re looking for or they have a tendency to be brand-agnostic, statistics show that consumers opt for marketplace searches. According to a 2018 consumer survey from eMarketer, nearly half (46.7%) of all shoppers begin their online search on a marketplace like Amazon.
Statistics like these stress the importance of multichannel presence and multichannel marketing for businesses. But, there’s a potentially nefarious side to major e-commerce marketplaces monopolizing shoppers as one central hotspot for everything they could need: the possibility of choosing profit over fair marketplace transactions.
Picture this: an online marketplace specializes in baseball gear. So, they feature every version, color, and variety of a baseball bat from every conceivable brand. They now have access to data and information that they could easily use to create and launch their own product on the site – and, since they own the site and the consumer experience, they could promote their own products depending on consumer behavior.
“We’ve learnt in a post COVID era that underpinning growth with core values; in our case trust, transparency and being ethical, is paramount,” says Can Paton, Founder of OnBuy, a new online marketplace.
“While technology drives every customer experience, we believe that humans matter – whether it’s our hard working global teams, or our millions of customers,” he adds.
Paton’s emphasis on humans reminds us that, while how and where we shop may be readily changing and more virtual than ever, we are still humans buying from humans. The best way to construct a free and fair marketplace is to provide total price transparency and ensure businesses are supported in selling their products while consumers are supported in finding the best product match for what they’re looking for.
As e-commerce at scale continues to unfold at unprecedented rates, this emphasis on human interaction and transparent transactions is what will ensure the trend towards virtual holds strong.