Platforms are the business model of the future. Instead of creating value by selling to an end customer, platforms create value by matchmaking buyers, sellers, and service providers.
It’s a transformative business model that requires platform operators to shift from focusing on the buyer to thinking about the experience of everyone in the ecosystem.
Platforms aren’t restricted to a single industry or use case. In fact, Platform Pioneers abound in manufacturing, B2C retail, distribution, and procurement. They’re using the platform model to give buyers an online marketplace and distributors a new sales channel, like Toyota Material Handling; they’re launching new brands, like H&M Group's Afound; and they’re creating procurement networks with drastically scaled assortment, like Coperama.
But while every platform is unique, there are some things that all successful platforms have in common. From the earliest roadmap to launch day to the future state of your platform business, here are three of the things that every successful platform has in its platform toolkit. (Find the rest, plus the crucial questions to ask yourself when you launch a platform business, in Mirakl’s top-to-bottom guide, Platform Your Business to Win.)
1. Simple workflows for sellers, with an eye towards reliability
Network effects in action
Unlike the traditional “pipeline” business model, where a business sells to an end customer, successful platforms are all about making connections between different groups. It’s key to achieving network effects: the virtuous cycle of more buyers and more sellers that contribute to ever-increasing growth.
In addition to focusing on the buyers on your platform, you need to pay attention to the seller experience. Without a robust group of third-party sellers, you won’t be able to attract more buyers… and you won’t be able to build a sufficient network of third-party sellers if they can’t easily list and manage their products and services on your platform. To scale, your system needs to make it easy for sellers to join, with simple workflows that accept all of the data formats and files that your sellers use.
Once you bring those sellers onboard, you need to keep them happy – and monitor seller performance. That means you need to design your platform with functionality in mind for both you and your sellers, so that you understand what’s working well, and they can seamlessly manage their products, pricing, and promotions.
2. An exceptional customer experience from the start
You can’t tiptoe into platforming your business. Incremental improvements won’t be enough to make the impact that you need to lead in the platform revolution. For your platform to be successful, you need to invest in providing an exceptional experience for customers from day 1.
It starts with a seamless integration with your current online presence, so that your platform feels like a core part of your business. You’ll also need to work exclusively with quality sellers who you can trust to meet customer expectations and deliver on your brand promise.
In addition, an exceptional customer experience means providing multi-channel support for your buyers, whether they’re purchasing from your owned assortment or from a third-party seller. Last but certainly not least, you need to pay close attention to the digital experience you’re delivering to your customers, and ensure that the features and reliability that modern shoppers expect are available.
3. An appreciation for the value of data – and the tools you need to analyze it
Platforms are weapons of mass data collection. They allow everyone in the value chain, including operators, third-party sellers, and service providers, to tap into customer insights. In the short term, this insight can drive personalization for customers. Long term, it gives every player in the value chain the ability to predict future needs and behaviors and optimize their business to better serve customers.
We’ll put it this way: Imagine the demand data you have today based on sales for your existing inventory. Now, imagine how much more data you’ll have when you have double, triple, or even 10X the number of online products and services for sale.
When you platform your business, your opportunity to learn what your customers want has increased tremendously. To make the most of it, when you scope the design and development of your platform, ensure that you include the tools you need to analyze all of that data. It will help you deliver even more of what your customers want – and grow your business with an eye towards long-term success.
Get ready to kickstart your platform journey
No two platforms are alike – as Forrester Research puts it in How to Build a Platform Business, “There are as many platform business models as there are actual business models.” But the value of platforms is a constant that spans industries, segments and verticals. Learn about all of the ways that you can use the platform model to grow your business, and get strategic guidance on how to execute, with Mirakl’s top-to-bottom guide, Platform Your Business to Win.
Written by Sara Matasci
Content Marketing Manager at Mirakl