The good news about the era of marketplaces is that it allows the internet to finally live up to its potential as the store for everything. With few exceptions, no matter what one is looking to find, with enough persistence, there is a digital vendor selling it — and a marketplace hosting that digital vendor and boosting its signal to a wider audience.
And this isn’t just a phenomenon of the developed world, Yapstone Executive Vice President and Chief Technology Officer Sanjay Saraf noted in a recent interview with Karen Webster, but increasingly in every corner. In Africa, China, Latin America and India, one finds the same thing as in North America and Europe: an increasing penetration of mobile-savvy customers expecting not only to get whatever they want, whenever they want, but also for it to be an easy and straightforward process.
However, the modern marketplace still needs a bit of work in that department, according to Saraf, because too much choice with not enough curation tends to create an overwhelming experience for consumers, not a rewarding one.
“When we look at the marketplaces in the travel and vacation vertical that we serve, between all the choices customers have with all of the name-brand hotels, luxury properties and then independent rentals, the choices quickly become too many,” said Saraf. “The investment that needs to be made here isn’t just in choice, but also in presenting choices to consumers in an appealing way.”
Which means, he noted, marketplaces need to invest in artificial intelligence (AI). Narrowly speaking, the only way to appeal to consumers in this very fast ecosystem is to better understand them and leverage that understanding into a more personalized experience. But more broadly, that better understanding — of both the consumers and their full retail context — offers mutually supportive enhancements across all of the interconnected operations of a marketplace. That makes them better able to address today’s challenges, Saraf said, as well as be more flexible for any future issues that arise.
The Personalized View And The Power of AI
One can imagine the overwhelmed customer on a travel marketplace, trying to find the right deal for a short trip or vacation. Suddenly awash in a flood of results, the customer throws on some kind of filter just to spend less time scanning thumbprints and reading amenity lists in an effort to narrow down the vast array of rentals.
“So by way of a quick example, what we’ve seen on marketplaces is operators investing quite a bit of time and money into very specific, granular tagging of photos, so that specific features like a pool or a view from the bedroom are more easily surfaced during a search, and the consumer has a much better chance of finding exactly what they were looking for,” Saraf noted.
It is a small example, but one that points to the much bigger emerging truth in the market, he said. Marketplaces need to invest in customer data and analytics as centralized foundations of their platform, because it is so critical to really understand that customer, both within that marketplace and in the wider commerce ecosystem.
That AI-enhanced customer understanding allows the marketplace to ramp up its personalization efforts, said Saraf — but it is just one of about five areas where investing heavily (and properly) in AI can be a game-changer.
AI, for example, provides insight into how marketplaces can dynamically set their pricing — something most clearly illustrated by Uber and other ridesharing services that can look at historical use patterns, geography and on-site eccentricities (road work or a blizzard, for example) to price and surge-price their fares. Or, Saraf noted, it can be used in the context of the rapidly revolutionizing transportation landscape, and the ways in which consumer and map data is feeding the evolution of self-driving cars.
Or, he added, one can look at the operational and security buckets. AI is the tool that not only pushes back the fraudster masquerading as a legitimate consumer, but also allows the good consumer through even when their context has changed. It also works in the backend, when the size and scale of operations makes it inefficient for human beings to support a transaction from beginning to end.
Given the travel-oriented nature of the platforms Yapstone serves, chargebacks are an inevitable part of the business, Saraf pointed out. Sometimes things don’t go quite as planned on a trip, causing a consumer to initiate one. In that case, AI can assess a much bigger picture than a human employee, bringing together data about the property and the stay, as well as information about the customer’s past behavior on this platform and others.
“Sometimes, the AI will gather the data and give us the material necessary to fight the chargeback, or it might tell us that the claim is likely good and we are unlikely to succeed in fighting it,” Saraf explained. “A human being trying to make that choice will be much more costly and likely not as accurate.”
AI can offer the marketplace a chance to fully understand its consumers and their habits, he said — and that insight is a multitool that marketplaces can then use to improve their offerings across the board.
The Path Forward
The good news, Saraf told Webster, is that the need to sell the idea of AI is more or less a thing of the past, and merchants have realized that investment needs to happen.
The less good news is that we are still in early innings — the investments are starting to happen, but is everyone fully geared up to make full use of the benefits?
“Probably not,” Saraf said. “In fact, definitely not.”
But it is happening, he believes. And perhaps more interestingly, the marketplaces that invest in AI are better able to expand their footprints. Yapstone’s marketplace partners are increasingly investing not only in AI to understand their core businesses, but also to better understand the markets that are “just adjacent to their offerings.”
“A platform can see how it is renting properties, for example, but they can also look at social and behavioral patterns to see what other connected things their customers are interested in, and consolidation starts to happen,” Saraf said.
So it’s not just about renting the room, but also about helping to connect the customer to the tours, the spa treatments, or whatever else their data patterns indicate they are seeking. When a marketplace understands their customers, there is an opportunity to not only serve them better in one arena, Saraf noted, but also to find the other places they are looking to be served and step in to fill the need.
“The room for growth is big, not just with investing in their own data, but also investing in the ecosystem as a whole,” he said, “because they can increase their offerings and ultimately pick up more wallet share with customers.”