TECHNO TIMES EVERY MARKET CAN HAVE A PLACE FOR A MARKETPLACE
It’s long been discussed that the world around us will shift online – every week is a reminder that this is happening on scale right now, from retailers to travel agents all being impacted. What’s always been the trend is first, the largest and/or the more technologically capable service providers go online with their own website and app, for instance Aviva Insurance, McDonalds, easyjet and Hilton Hotels. This is coupled with the respective rise of online marketplaces in their sectors which offer an online presence to service providers of all shapes and sizes, for instance moneysuper- market, Just-Eat, Expedia and
booking.com. They have become the central decision and purchasing environment for buyers and sellers, surging in popularity in recent years. Ground transport, now fancily des-cribed as ‘mobility’, is inevitably next and is showing many direct parallels. Historically, cab opera- tors relied on their office location and local residents and their guests to use their cab services, ploughing whatever marketing budgets they had into advertising in train stations, local newspa- pers and cards through the letterbox. Then fleets of all sizes started to launch their own websites, with the largest and/or more techno- logically proficient offering their own apps. With investment sunk into these channels, fleets of all sizes are trying to recover these costs by grappling with advertising across Google and Facebook to attract customers online. But just hoping a website or an app will get them more business is missing the point. Customers and cab operators are in- creasingly benefiting from the ‘network effects’ of online market- places where more customers attract more cab operators, which in turn can spotlight their attributes to more customers, generating
more opportunities to book. Key to any effective cab marketplace are the following factors:
ATTRACTING NEW CUSTOMERS
Cab operators are sinking hundreds to thousands of pounds a month into adverts on Google or Facebook, essentially paying for browsing customers but not actual bookers. With these channels’ ever changing algorithms and limited advertising real estate on mobile screens, the efforts to recover a meaningful return on invest- ment
are getting tougher, especially for small/
mid-sized fleets who don’t have the time beyond ‘hobby hours’ to manage this spend. Online marketplaces can do digital marketing across mul- tiple online channels at a scale that attracts customers more effec- tively than a single fleet – but the best online marketplaces, such as minicabit, can offer platform tools and data insights to also expand a fleet’s reach to customers around the country coming into their base area. Importantly, marketplaces typically charge only for delivering actual bookings from customers, not viewings like as platforms do.
PRICE AND PRICE COMPARISON
An initial perception by suppliers is that online marketplaces simply focus on price comparison, encouraging service providers in a race to the bottom. Whilst customers expect other at- tributes beyond price (see below), the emergence of new mobility options means a cab fleet’s pricing may one day compete with other new transport modes, from the e-scooter to the smart pooling of private minivan rides (as Citymapper and many others are trialling). Hence the opportunity to empower operators of all sizes and loca- tions to sense check their pricing on a regular basis is highly valuable, but not the only angle to compete…
USER EXPERIENCE
Customers are increasingly choosing to dwell in online market- places that can offer a single, easier booking experience versus the fragmented booking flows across multiple operator websites. Crucially, cab providers can highlight the attributes of their service beyond just price, such as choice of cars and customer ratings, liberating them to focus on service fulfilment rather than trying to keep up with the latest marketing technology. Ultimately, this can level the playing field for even the smallest providers,
as has benefited independent hotel/
B&B operators who have used
booking.com’s platform to gain online customers alongside the largest hotel chains. Make these factors work together and you get a marketplace that can truly benefit its suppliers, not just its customers. Perhaps there’s no better example than Amazon which has said well over 100,000 sellers make more than £100,000 per year, that’s at least £10 billion of sales enabled every year! Mobility marketplaces are just getting started…
Shashank Kansal leads the
Commercial team for minicabit, the UK’s largest online cab marketplace
34 MAY 2019
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