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Understanding The Success Of The Online Marketplace

Online marketplaces have experienced expansion during the coronavirus pandemic, and even before that, online shopping has been on the rise due to its numerous benefits – a click of a button and you can purchase a whole new wardrobe.

In Australia, data shows that an increasing number of customers are buying products online; with up to a quarter of consumers using websites to purchase at least once a week.

According to available data from Australia Post, Australians spent $353 billion on retail products over a yearly period, with online shopping accounting for 18 percent.

Household online shopping stated that in 2022, 82% of Australian households have made online purchases, representing 9.4 million households. By 2033, it is predicted that about one in three dollars will be spent online.

What is being purchased online?

Online shopping is often used when buying gifts, especially during major holidays. According to official data, Australians mostly order gifts online, but clothing, footwear, electronics, and household groceries are also popular.

Disadvantages cited during online shopping include the reliability of certain websites. Although large companies like Amazon have gained the trust of a wide range of customers, there are still lesser-known websites that people may be cautious about when purchasing products from them.

Online marketplaces have enabled the availability of products worldwide. Any brand or label can now reach you in a few clicks. You don't have to wait for a memorable trip to purchase from your favorite clothing brand that you can't find in your city or country, because everything has become so much more accessible. Globalization has given consumers everything at their fingertips, but it’s not just the consumers becoming more globally aware of what they could buy. Manufacturers are also becoming more and more global therefore, this goes hand in hand with their customer’s expectations, with giant operations for online stores now allowing many companies to connect to this new global customer base. 

Social Media and Online Marketplaces 

Social media has significantly influenced the growth of online shopping. Many rely solely on social media for information, as well as finding many product advertisements in their feeds.

Numerous online marketplaces and shopping websites have social media profiles, allowing customers to browse through the latest trends and see comments in real time from others looking for the best deals. The comments on their social media accounts can give you insight into whether you are buying from a reputable person/company or a page that most consumers do not trust or have had a bad experience with.

In addition to being interactive and facilitating conversation and comments, social media, ads also lead many customers to opt for online product purchases under their influence.

As we mentioned, online shopping experienced its maximum growth during the coronavirus pandemic. Still, after that, it began to see a slight decline, especially in 2023, when the entire global economy faced risks. Consumers became much more cautious and spent less money on unnecessary purchases. On the one hand, consumers have become comfortable with online shopping, having become accustomed to this behavior model. Still, on the other hand, they are becoming more demanding, so all companies or individuals involved in online sales must adapt to consumers to achieve higher growth in 2024.

Innovations, progress, technology, and online shopping

Advancements in technology in all fields enable the growth of online marketplaces and a much better user experience during shopping. Above all, this progress is immediately noticeable in payment options such as digital wallets or one-click payments, which allow users to save time by not having to fill out long payment forms. Consumer protection is also covered during these online payments, so these methods have become as reliable as other types of payments. Methods such as fingerprinting and face recognition are the most reliable methods, and when used, there can be no significant errors when the user pays for their order.

In addition, artificial intelligence is expanding, and it has been influencing consumer experiences in online shopping since its inception.

Now chatbots can communicate with users, provide them with quick and reliable information, and help them during shopping and registration on a particular platform, facilitating the shopping process for sellers and users.

Online market for both large and small companies

In addition to large global companies, more and more local companies are entering the online market. Local companies even have better chances for online sales because, above all, they understand their market and can adapt it to the needs of their consumers, to the traditions characteristic of a specific area, to the ways and techniques that suit one market, perhaps not so much another.

Consumer needs can vary from city to city, from place to place. What is expected in some areas may be completely foreign in others, so it may deter buyers from online shopping if it does not match their habits. Therefore, more and more companies that market their products online use personalized messages and consumer experiences tailored to a specific region, as well as individual messages, actions, and advertisements for those consumers who can identify a shopping behavior pattern.

Virtual shopping and what it brings

The disadvantages of online shopping are simply that you cannot physically try a product before buying it, although many companies have the option to return the product if you are dissatisfied with it; however, the speed and lower effort of shopping is what appeals to many customers, therefore adding an extra step of returning a product can put people off.

That is why technology has introduced virtual shopping. Now, you can try on clothes, see how your favorite shoes would look in the comfort of your own home rather than changing room lighting, and check how a selected piece of furniture would look in your living room or bedroom before making a final decision and ordering the product. Because of this, users have minimal chances of returning goods they bought, and they will get exactly what they wanted and imagined from the product.

Mobile devices

Mobile phones have become a part of people; you rarely meet someone who does not carry their mobile phone with them everywhere, so online marketplaces rely heavily on mobile commerce, which may bring the most profit to sellers.

Mobile shopping apps are now a standard part of every phone; they are created to make shopping easy, fast, simple, and, above all, to ensure that every user can easily navigate and make every purchase through their mobile phone.

They are often personalized, users receive messages that match their behavioral patterns from the previous period, offers, and actions designed for them. Apps are designed to be sleek, easy and simple, so nearly anyone can use them.

However, brand shopping apps are used by at least two-fifths of consumers aged 25 to 44, about a third of consumers aged 18 to 24, and 45 to 54. Among consumers who use unique mobile shopping apps, 60% have between two and four apps installed on their phones, while almost a fifth have more than five apps.

Environmental impact

Amazon has reduced the use of plastics for packaging and has chosen environmentally friendly alternatives, which speaks volumes about how important this topic has become for consumers.

Consumers now care more about sustainability, especially young generations, who pay increasing attention to companies that care about environmental protection and buy less and less, regardless of the quality of the product, from those who do not.

Sustainability can be achieved throughout the entire buying and selling chain, from packaging to supply chain management; environmental initiatives are changing the industry.

In addition to reducing a specific company's ecological footprint in this way, in the long run, the same companies save significant amounts of money by using sustainable materials in online shopping.

User experience

Shopping platforms and sites must be simple, fast, and straightforward. A simple and effective online experience is crucial for whether you will continue online shopping or enter the vicious circle again: crowds, trying to park, and waiting in lines. A great example of user experience is on Locanto, where it’s easy to search for your desired product or browse through categories to find what you’re looking for.

Even though online shopping is now king, it can have a positive impact on physical stores. It may succeed in reducing crowds in those stores, allowing people to spend their time more effectively than staying in overcrowded supermarkets and shopping malls. But overall, online shopping contributes to economic and environmental sustainability, benefiting customers and sellers.

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