The risks and rewards of building trust into your platform have never been greater. The global projected market size of online marketplaces in 2020 was $3.5tn, and is set to rise to $8.8tn by 2025. In the latest in our series of articles about the role of marketplaces, Martin Le Bars, Solutions Director for Trust & Safety at Concentrix + Webhelp, looks at how you can build trust (and make sure you don’t lose it) and manage the tension between removing friction from the customer journey while maintaining the integrity of your platform.
Marketplaces play an essential role in safeguarding not only the personal information of their customers but also their property. Each transaction has to be underpinned by trust in the system and that cuts both ways. Both buyers and sellers need to know that their identities and belongings can be entrusted to a platform, just as much as those platforms need to know if they can trust those customers’ behaviors and reputations.
The consequences of losing that trust can be existential for the platform involved. In a 2021 PwC survey, 44% of consumers said they had stopped buying from a company due to a lack of trust. Marketplaces may not wish to add ‘friction’ to their checkout or ID processes, but plenty of evidence points to customers being happy to wait a few seconds more for an extra layer of security and the resulting peace of mind (and increased volume of sales) that result.
Let’s begin by segmenting marketplaces into not two, but three: B2B, B2C and C2C spaces (a classified ad platform is simply a marketplace where you are connecting consumers to consumers).
It can be difficult for buyers, sellers and the marketplace hosts themselves, to fully understand who is responsible for what. There is an inevitable tension between a marketplace that claims its job is simply to connect buyer with seller, versus a buyer who believes (understandably) that the marketplace’s job is to protect them and their transactions.
In the next blog in our marketplaces series, we’ll be looking at how the EU’s new Digital Services Act will be clarifying (and enlarging) these responsibilities for both parties, and what those new responsibilities will mean for each of the players.
What Are the Different Threats Marketplaces Need to Be Aware Of?
For now though, let’s identify the type of threats marketplaces need to be aware of. We can rank these threats starting with the most serious first:
- As you might expect, illegal content is your biggest risk. What do we mean by ‘illegal’ content on a markeplace? We’re talking about highly illegal products and services like guns, weapons, drugs, prostitution. There are obviously hugely damaging implications for your brand if you are found to be hosting these kind of things, but more fundamentally your platform (and you) could be charged with breaking the law. Not quite as existential a threat, but a threat that continues to proliferate exponentially, is counterfeiting. According to US government figures, the total amount of counterfeit goods sold each year comes in at around $1.7 trillion to $4.5 trillion. This means, if it were a country, that counterfeiting would be one of the largest economies in the world. Again, you can be charged, and a platform where people cannot trust the quality or veracity of the products being bought or sold, is not one with a long-term future.
- Whether it’s seller accounts being hacked or fake reviews being planted, preventing scams is absolutely fundamental to prevent loss of consumer trust. The potential for scams is huge. For example, in 2023 there are 228 countries and territories around the world using Facebook Marketplace. Meta estimates that 20bn messages are sent each month between buyers and sellers. A UK survey revealed that 1 in 6 Marketplace users have been scammed, in a territory with around 51.5m Facebook users. The next three categories aren’t illegal, but they will impact and damage customer experience and deter users.
- The third category is inappropriate content. This could range from nudity to profanity. In and of itself, it might not be deemed necessarily seriously offensive content. It’s more a moral issue than a legal issue. But users need to be able to trust that they (or their friends or families) are not going to be randomly exposed to this kind of content.
- The fourth category is what we call the misuse of the platform. That might be product links that are broken, or the wrong keywords, or an unrealistic offer. This is a customer experience issue and it goes hand-in-hand with the fifth category.
- This is poor product information, which can be corrosive to trust in a platform. This could be poor-quality imagery or mislabelled products, or multiple duplicate products.
How Can You Counter the Threats, Meet Your Responsibilities and Grow Your Marketplace?
To succeed, there are three main areas that a marketplace must be able to offer. Think of them as the three pillars of a successful marketplace strategy, each of which is linked to the others.
- Safety Experience (SX) – this is about trust: arguably the most important single factor given the level of competition in this increasingly crowded field. Ensuring user trust translates as zero tolerance for scams, counterfeit products and anything else that could have a corrosive effect on user trust for buyers and sellers.
- User experience (UX) – this is the second pillar needed to ensure the success of a marketplace. It’s important to remember that users are buyers and sellers. So a good user experience for a seller might include the time taken to get new products loaded up and available online for example (rather than waiting a week for them to be approved, for example).
- Quality Experience (QX) – this is the final part of the puzzle and it means making sure that you have the right product information, and no spam or counterfeit products, for example.
This focus on users as buyers and sellers is important, because growing your marketplace means recruiting both types of users. You are going to need them both in order to grow, and in order to do that you need to have KPIs in place to measure your success.
How to measure your success – 5 key actionable metrics
- What’s your Time To Site? How quickly you can get the product to the marketplace is absolutely key. Minutes can cost millions. But it’s not just money – its sentiment. If you keep users waiting you can lose that customer for a long time.
- What is the average lifetime of a scams? This is the difference in time between a report being made and the removal of the scam. You can’t remove everything before it gets uploaded, sometimes it’s necessary to be reactive. Are you measuring the time that scam is on your platform in minutes, hours or… days? The longer the scam is up for, the more damage is done to your brand and your users. Plus, the acceptable lifetime of a scam is directly impacted by its sensitivity. The more offensive the content, the more essential it is to have a rapid response.
- What’s your Refusal (and Reason) Rate? This is a metric that’s a great indicator of the seller’s experience. It needs to balance out between being as low as possible (sellers won’t use a site that repeatedly turns them down for reasons they don’t understand), while maintaining the quality you want for your site. A 20/80 rule where you focus on your top 20% of sellers can be useful.
- What’s your Flag Rate? How much of your published content gets flagged by users? We know people take more time to report bad content on marketplaces than on social media, but there are bigger consequences when it concerns ecommerce.
- What’s the impact on customer care? Poor performance handling Trust & Safety issues will directly impact traditional customer care operations by causing an increase of in-bound calls, an increase of AHT, a fall of NPS and more. A T&S team should be aware of the huge difference they can make to the volume of customer care responses.
In the next blog in our marketplaces series, we’ll examine the EU’s new Digital Services Act, which will bring large-scale change to the industry, and we’ll look at what those new responsibilities will mean for each of the players.
Read the rest of our series on retail and the role of marketplaces by visiting our website. If you’d like to talk more about building trust in your own business, get in touch with us – we’d love to hear from you.
