This week has been a very busy week at Mirakl Towers, not just because we have launched a new services product but because we have made a big step in growing ourselves as a platform business. Let’s take some time to consider this.
Services (and the on-demand economy) have powered a significant shift in how consumers interact on the internet. We are only at the beginning of this wave of innovation but already it is growing. Research from CB Insights has shown that the investment in on-demand apps has grown from $100m in 2010 to $1.7bn in 2015! This is a staggering rise and shows that the analysts and the investment community is putting their money on the on-demand economy to continue to grow and grow.
When people think of on-demand services, they are instantly drawn to UBER and Airbnb. Whilst these are amazing success stories, they only really tell a portion of the story. The transformative thing about services is how applicable they are across so many industries. Home services, professional services, recruitment, consulting, legal and financial have all show a large number of new market entrants. This is before you even start to think about how services can be combined with products to create new categories that don’t even exist today! The future of services is really something that is currently being defined the world over, and that it makes it a very exciting space to be in.
It’s true to say that on-demand services is growing but it’s already a big chunk of the market and plays a significant role. Looking at 2015 we can see that in the US the on-demand economy is worth $57.6bn already and within that online marketplaces make up $35.5bn. Transport, which everyone thinks of first, is only worth $5.6bn so it’s clear that there is a revolution happening without people even realising and it is being driven my marketplaces. This revolution is happening because of the proliferation of services and the need to be able to offer a consistent experience to consumers, both across B2B and B2C, and this is the perfect ground for a marketplace.
When trying to look forward and predict the future (in as much as anyone can predict the future) it’s hard to see services as anything but ubiquitous and varied. I think it’s reasonable to expect there will be new business models emerging, services going on-demand that no-one previously ever imagined could (legal is a great candidate for this) and consumers winning because of the tight integration with greater data and personalisation. It’s for this reason, that we at Mirakl, have built a platform that is going to drive the services revolution. We are excited at all of the possibilities that are sure to emerge and we have made sure our platform has been designed from day one to be as flexible as possible. We want, and expect, our customers to innovate on top of our platform and provide new and amazing experiences that haven’t been seen before.
I did mention change the world, didn’t I?
You’re right, I did lead with this title. Beyond the amazing revolution of services there will continue to be pressure on retailers, brands and distributors to become a destination online. The commoditisation of products will continue, with greater price transparency, low-cost alternatives from emerging markets and the opening of global supply chains. This will see businesses having to intensify their fight in becoming an online destination. Services will allow retailers, brand manufacturers and distributors to differentiate in a crowded market, to provide unique experiences and services to their customers and to ensure that their customer base continues to return.
Once a business has a customer it will be then trying to maximise the AOV and LTV of that customer. Bundling services with products will allow companies to grow the initial transaction but also through the use of machine learning and AI, be able to offer relevant services throughout their product and actual lifecycle. This promises to be an incredible revolution and will dramatically change the way in which consumers (across B2B and B2C) will interact with businesses.
We are only at the beginning of the journey, in many ways we are still at the beginning of eCommerce. But what is exciting is that there is already another wave of innovation which promises to be one of those rare things. Good for the customer and good for businesses.
To learn more about Mirakl’s Marketplace Platform for Services please have a look at our website and be sure to subscribe to hear more about how we are looking to the future.