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Trust: a vital issue for marketplaces

The success of marketplaces is based on a simple principle: connecting sellers and buyers seamlessly. But behind this promise lies a persistent challenge: trust. Counterfeit products, fake customer reviews, uncertainty about provenance and late payments still too often undermine the experience.
In this context, blockchain appears to be a technology capable of enhancing transparency and restoring trust in the long term. Far from being reserved for cryptocurrencies, it offers concrete and powerful applications for e-commerce.

Blockchain, in simple terms

Often perceived as complex, blockchain can be summarised as follows: a digital ledger shared between several parties, which is tamper-proof and accessible with complete transparency. Each new piece of data entered (transaction, certification, review, etc.) is time-stamped and cannot be modified retrospectively.
Its main characteristics – security, traceability, immutability – make it a relevant lever for environments where trust is central… such as marketplaces.

Practical uses for marketplaces

1. Ensuring product traceability

In sectors such as agri-food, fashion and cosmetics, consumers demand to know where products come from and how they were manufactured. Thanks to blockchain, each stage – from production to delivery – can be recorded and consulted. This gives buyers access to a ‘digital passport’ for their product.

2. Combating counterfeiting

Marketplaces are regularly confronted with the sale of counterfeit products. By associating a unique blockchain certificate with each item, it becomes possible to instantly verify its authenticity. For brands, this is a way to protect their image; for customers, it is a guarantee of trust.

3. Making customer reviews tamper-proof

Online reviews strongly influence purchasing decisions… but their reliability is often questioned. By recording reviews on a blockchain, we can ensure that they come from real buyers and have not been manipulated.

4. Securing payments with smart contracts

Smart contracts automate certain critical steps. For example, payment can be blocked until the customer confirms receipt of the product. The result: fewer disputes and greater peace of mind for all parties.

Benefits for all parties involved

• For buyers: transparency regarding product origin, verified reviews, secure transactions.
• For sellers: promotion of quality, reduction in disputes, improved customer relations.
• For marketplace operators: a unique market positioning, an image of reliability and increased appeal to reputable sellers.

Challenges to overcome

The promise is appealing, but it is not all plain sailing. Setting up a blockchain infrastructure represents a significant investment, both financially and technically. Some public blockchains still suffer from slowness and scalability issues.

Added to this is the need for education: many customers do not yet have a clear understanding of blockchain, which means that efforts must be made to explain it in layman’s terms in order to build trust. Finally, regulatory aspects, particularly in Europe with the GDPR and the future MiCA regulation, will have to be incorporated into any initiative.

Towards next-generation marketplaces

If these challenges are met, marketplaces could transform into truly trustworthy ecosystems. Each product will have its own unique digital identity, each transaction will be secure, and each review will be verifiable.

Blockchain does not replace marketplaces: it strengthens them. It paves the way for a new generation of platforms, where transparency and reliability become major competitive advantages.

Blockchain has the potential to revolutionise the way marketplaces operate. By providing traceability, security and transparency, it directly meets consumer expectations and seller needs.

More than a technological innovation, it is a strategic tool for building trust – that rare resource that drives growth and loyalty in e-commerce.

Tomorrow, in the era of Web3, marketplaces that know how to take advantage of blockchain could well become the leaders of a new standard: that of total transparency.

The question is deliberately provocative, but we couldn’t resist!

In 2021, after a year spent in front of our screens because of the Covid pandemic, if we were to create two columns to compare the benefits of marketplaces and e-commerce sites, it would be difficult to find much to add in favor of the latter.

What was previously true for B2C is now true for B2B: the marketplace model has spread to a much wider range of sectors than fashion and travel and a number of sophisticated examples are proving the relevance of this approach. 

Total, Alstom and Suez are just some of the companies behind inspiring examples over the last few months (read more below).

In the last quarter of 2020, marketplace activity grew by 81% around the world: a meteoric increase that is double e-commerce’s (impressive) growth rate.

In response to recurring questions from our clients and potential clients, we’ve decided to share our answers here and ensure that B2B readers can benefit from our experiences.

1. A reminder of the key differences

What distinguishes a marketplace from a retail website?

On a retail website, the buyer enters into a relationship with the seller, without any intermediary. This reflects the buyer/seller relationship in physical stores: a retail website merely digitizes the sales process.

The seller manages the store front (in this case, the website) and the “engine room”: stock, payment, deliveries.

The business model is still based on retail price margins, just as it is in store.

However, the marketplace model involves a third player: the marketplace operator. This trusted third party adds value to sellers’ offerings, helps buyers find what they are looking for and is paid on commission. Sellers continue to manage stock and deliveries to meet demand.  They can access a new distribution channel without weakening their existing sales network and without having to reconsider their long-standing processes.

Everyone wins. Buyers have a single point of contact, committed to providing a certain level of service. The customer experience is significantly improved (smooth process and fewer problems). As a result, orders increase and sellers are reassured by these sales which are brought to them “on a plate”.

In particular, B2B sellers benefit from a rapid improvement in user experience.

2. The five benefits of a marketplace

Don’t lose sight of the fact that professional buyers also prefer online shopping! In a study entitled B2B Marketplaces Are Blossoming, published by the consultancy firm Roland Berger in June 2018, it was reported that 74% of B2B buyers search online for at least half of the products they buy. And once they’ve made their decision, 91% of buyers prefer to place their order online.

In reality, B2B buyers’ behavior is the same in the office as it is at home: their habits and their expectations have changed as a result of the UX revolutions brought about by Airbnb, Uber and other Internet giants.

A marketplace ticks the following boxes:

• It provides support for sellers. This support includes every stage of the process (onboarding, moderation, scoring), each of which can be displayed on dashboards.

• It aggregates and analyzes all data relating to the sales cycle, something that is valuable both for the seller and the marketplace operator: product and service data, purchase data and behavioral data.

• It enables seamless order tracking from shopping cart to delivery, including promotions.

• It generates financial indicators on sales, profitability of products and services, average carts, billing, etc.

• It facilitates buyer management: returns, refunds, messaging, ratings, etc.

Provided that the marketplace reaches a “critical mass” (the balance between sellers and buyers), the model is solid and scalable.

3. Define your business model

What are your main challenges? What problems are you trying to solve?

Start at the beginning. Do you want to:

• complement an existing physical network by combining physical and digital points of sale?

• digitize procurement (e-procurement) as Total and Alstom have done?

• focus on the circular economy as Suez has done with the Organix marketplace?

The marketplace model meets these three objectives.

As we have seen, the user experience is crucial when choosing a marketplace model. 

The almost limitless possibilities when it comes to customization are another marketplace advantage that should not be underestimated. There are as many potential B2B marketplaces as there are businesses. For one of our clients (an e-procurement marketplace), we’ve made it possible for buyers to create quotes, for example. Every industry has its own requirements and so does every sector. A marketplace allows for bespoke development.

As you can see, the marketplace model has become an essential tool for B2B players because of its reliability and modularity. You must now be wondering how you can launch your own marketplace. Does it involve the same process as for an e-commerce site? What skills are necessary? You’ll find the answers to all your questions in the articles on our blog.

THREE CASE STUDIES

SUEZ – Organix

This marketplace focuses on the recycling and recovery of organic waste: Organix connects waste producers with buyers who will process this waste.

ALSTOM – StationOne

Alstom is a world leader in transport systems, connecting rail operators with international vendors. In addition to an incredibly wide range of parts (wheels, bearings, motors, suspensions, cables, screws, cameras, tools and personal protective equipment), the marketplace offers services including installation, repair, servicing, training and technical advice.

TOTAL: E-procurement

A B2B marketplace for the professional internal purchases of goods and services.

Have you heard of generative AI? For the past few months, this branch of artificial intelligence has known growing success brought on by the advent of such tools as ChatGPT, Dall-E, and Midjourney.

These tools seem to breed innovation as much as controversy and generative AI is well on its way to disrupting long-established industries.

The e-commerce sector, in particular, will experience profound changes due to this new form of artificial intelligence. In this article, we’ll touch upon the concept of generative AI and the functionalities that could help online retailers boost their sales.

What is Generative AI ?

Generative AI – also known as GenAI – is an artificial intelligence system capable of creating content from data models. This content can take many forms, including text, images, video, or any other media.

In recent months, several startups have garnered attention, sometimes for their innovative products and other times for the stratospheric amounts they have raised or because of the controversy they have stirred up. Some of these startups include:

• OpenAI, the entity behind ChatGPT and Dall-E, which raised €175 million last May
• MidJourney, creator of the eponymous tool MidJourney
• Google – bolstered by the phenomenal success of ChatGPT – which very recently created Bard

How does Generative AI actually work ? 

So, how does generative AI operate in practice? How can you put it to work in your company or use it for a given project?

It all starts with a query – also known as a prompt – formulated by the user in the form of a question or command for the generative AI. The AI generator has undergone training and has been exposed to extensive amounts of data.

It then uses these data sets and its artificial neural networks to provide an original response.

Record-Breaking Mass Adoption

The massive adoption of AI is puzzling many experts around the world. ChatGPT, for example, reached the 100 million user mark in just 2 months. Comparatively, it took 9 months for TikTok to achieve similar numbers and 24 months for Instagram.

What’s clear is that the more consumers choose to embrace these tools, the more companies will offer generative AI-based services.

Where does e-commerce come in ?

We’re getting there! Generative AI models have disrupted many sectors and hold the promise of tremendous technological advances. E-commerce is, without a doubt, one of the sectors that will be closely affected by these innovations. Here are 5 examples of how generative AI could be relevant to e-commerce.

1. AI Generators for products recommendations 

Among the functionalities an AI generator can provide to address the challenges of e-commerce and marketplaces, product recommendation generation turns out to be the most promising.

This type of technology makes it possible to create a personalized browsing path for each customer or prospect based on their preferences previously identified by the algorithms. Generative AI can be a differentiating asset in the context of loyalty strategies as it provides a deeper understanding of consumer habits.

Customer data is at the heart of strategic stakes for most online merchants. Unfortunately, many don’t know how to take full advantage of it or don’t have the resources to do so. AI generators, on the other hand, are capable of processing a huge amount of data in very little time. This allows them to identify product trends and showcase certain items accordingly.

That said, utilizing generative AI shouldn’t make us lose sight of legal regulations concerning the use of personal data. In the European Union – and some other regions – users give their consent to have their behavior analyzed by accepting the presence of cookies on websites. In principle, no AI-based marketplace is exempt.

2. AI-Generated product descriptions

Product descriptions are a form of text-based content designed to enhance the user experience (UX) and improve the product page’s search engine optimization (SEO), ensuring its visibility in search engine results.

When managing a very large number of items, this kind of task can quickly become tedious.

The natural language processing abilities of generative AI make it possible to produce natural language content by analyzing product data. AI generators are especially well-suited to this type of task since product descriptions always tend to follow the same structure:

• General characteristics of the product. 
• Its benefits. 
• Its specificities. 

Thus, depending on the type of products the online retailer offers, the components of a textual product description can be essentially the same. For instance, a store that sells furniture and home decor will always include information about the dimensions of the products, which AI is fully capable of understanding through data analysis.

For example, Phrasee is a platform dedicated to product description generation for e-commerce players. It relies on generative AI to come up with original product descriptions.

3. AI Image Generators

One of the downsides of e-commerce is the inability to interact with the products physically. This means product images are crucial for triggering purchases. For online shop owners who need to process many items, taking pictures and editing images can be time-consuming and costly. Using pictures created by an AI image generator thus becomes a compelling alternative to help renew the presentation of products on a website.

Based on generative adversarial networks (GAN), product image generation uses a technology that employs pictures of existing products, which the algorithm analyzes repeatedly until it becomes capable of developing substantially similar content.

Among the tools that can be utilized to generate product images, DALL-E 2 – mentioned earlier – deserves the spotlight. This easy-to-use generative AI has already conquered the field of advertising and is now making progress in the e-commerce sector.

With that said, despite the performance of generative AI platforms dedicated to product images, this application isn’t yet suited to all types of retailers. For the sake of the brands’ credibility in the eyes of their customers, the authenticity of the images remains crucial.

4. Building close relationships with customers

Chatbots – or conversational agents – can provide real-time assistance for the users by answering generic questions. This does away with the last remaining barriers to purchase and is an effective way to improve the conversion rate of e-commerce websites.

5. Fine-tuning internal search engines 

Users rely on marketplace search engines extensively. This means they expect clear, swift responses and a selection of products that match their original search intent. 

Thanks to generative AI, search engines will continue to become increasingly powerful as time goes on. Retail giants such as Amazon are fully aware of the potential and seek to incorporate these improvements right into their applications. In the United States, 56% (1) of product searches begin on the American marketplace.

However, Generative AI raises many controversial issues

We can’t mention generative Artificial Intelligence without addressing a few areas of concern. As innovative as AI generators may be, it should be noted that they will not replace the cognitive abilities of human beings, at least not in the short term.

Instances of inaccurate information

Generative AIs such as ChatGPT sometimes offer erroneous information, and generative AI models are still in their learning phase. We believe generative AI can be a complementary tool to human intelligence, but it is still far from being able to replace it altogether (thankfully!). If you want high-quality content, be circumspect about the raw information these tools provide. We recommend you always double-check it thoroughly.

What about our personal data ? 

When we converse with a chatbot online, we may be in a position to give out some of our personal information. This data is collected and stored by the conversational agent. That’s when it can get difficult to get it back if we no longer want it to be used or if we are worried about it being sold to third parties.

As you may have gathered, generative Artificial Intelligence is opening up a whole world of possibilities in various sectors as consumers continue to embrace it.

E-commerce is one of the areas where its hold is already tangible and where it will keep on increasing in the years to come.

These AIs can be tremendous business drivers and offer significant time savings. However, the limitations of AI systems – still in their learning phase – and their propensity to sometimes deliver inaccurate or incomplete information should not be ignored.

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Sources

(1) “Every single” Amazon team is working on generative AI, The Verge, 2023