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January 19, 2021 - Strategy

The new middleman

In the 15th edition of our yearly trend report, we discussed the subscription model in detail as part of the fourth paradox ‘ownership versus access’. At the end of our interview with Omar Mohout, an authority when it comes to (digital) business models, we were curious: are there any other interesting options, next to the subscription model, that we should keep an eye out for? That’s how he raised the second most popular business model in a digital context, being the marketplace model. What does this business model look like and how does it give room to a new middleman?

Blog - Middle Man - KV

The marketplace model

The marketplace model basically connects buyers and sellers on a proprietary platform. Uber is an outstanding example. They match someone with a car with someone who needs a ride, and then take a heavy commission of 20-25%. The same goes for Airbnb, Booking.com, Deliveroo … Some successful marketplaces try a different approach and allow third parties on their platform, who can then also make an appeal to the buyers of the marketplace. In that case, logistics are being taken care of by the third party and revenue is generated solely by offering user-friendly access to the customer. Think of Bol.com, Zalando, de Bijenkorf ... So, setting up a marketplace is very valuable as a business model, but hard to achieve

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Unfortunately, it’s not enough to create a marketplace and assume it will be successful. You can’t simply build it just for traders and presume customers will follow. That would be too easy, right? All marketplaces we know have started from their own niche (which initially leads to a monopoly) and only then opened up to third parties. Just look at Zalando: First, they had a monopoly in selling clothes online. Next, they allow third parties on their platform. Other well-known examples are Amazon, bol.com, de Bijenkorf …

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To what do lucrative marketplaces owe their success?

To what do lucrative marketplaces owe their success? These platforms really understood the importance of user experience. Decisions are made based on actual user behaviour, often with the help of machine learning. As such platforms gain in popularity, it has become an interesting place for sellers to be active on. As we already stated in our trend report, the only way forward is thinking outside in. In that way, you will always be one step ahead of the competition. Remember that whoever controls the relationship with the customer dominates the value chain.

The Internet as the new intermediair

With the Internet, everyone thought the (real-life) middleman would disappear. Suddenly, brands like Quickstep, Terre Bleue and Apple could sell directly to their customers instead of appealing to an intermediair to bring their products to the end users. But nothing is further from the truth: with the marketplace model, a new middleman - as Omar likes to call it - emerges. This middleman provides a platform where one can offer his products or services and one can make use of them. He might be cheaper than the former (real-life) middleman, but is more powerful than ever. Just think of Google and Facebook who literally own the customer relationship. 

As we mentioned in our trend report, the marketer from today will have to become a technomarketer. The latter will have to know and understand the importance of this new middleman through and through in order to stay ahead of the competition. This new middleman makes use of machine learning to create the best possible user experience on his platform. Therefore, the technomarketer will have to create content that is appealing to both the end customer and the algorithm. Today, that’s what we call SEO copywriting. This might soon evolve to voice search copywriting, as more and more people start using voice commands to, for example, order things online. Then, your business will have to respond to voice searches, as the wording is different from classic searches. For example, people type 'opening hours Bpost', but say 'when does Bpost close?'. Voice search will be an opportunity to go much more into conversation with your customers! 

How to act around this new middleman?

As there are only a limited set of major platforms in this digital world, chances are that you won’t be able to create one yourself and be the algorithm. Good examples though are the DoNotPay app and the Kitche app. Just don’t build your hopes up! 

But there’s no need to envy this new guy, because he can take your business to the next level. How? You could, of course, use one’s marketplace to distribute your products or services on. Just make sure you don’t put all your eggs in one basket. But what is a smart move?

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  • Circumvent the algorithm. Can you get your customers to ask Google ‘find me Duracel’ instead of ‘find me batteries’? It goes without saying that brand equity plays an important role here.
  • Manipulate the algorithm. Be the technomarketer who can speak not only the language of the customer, but also ‘machine’ and knows how to touch both the heart of the customer and the algorithm. 

Now you know there’s a new middleman, it’s time to get to know him better. Need help?


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Justine Trio

Justine Trio

Marketing Copywriter

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