Vertical marketplaces: the new competition for Amazon

Marketplaces are online platforms that connect companies/sellers who want to sell their products or services on the one hand, and buyers who want to purchase these products or services on the other hand.

In this sense, we have Generalist or Horizontal Marketplaces and Vertical Marketplaces.

Generalist or Horizontal Marketplaces

As the name suggests, these are marketplaces where you can find a wide variety of categories and catalog depth. The most classic example in the retail world is Amazon. Here we can find other Marketplaces such as Mercado Libre, Aliexpress, etc.

Vertical Marketplaces

On the contrary, if what we have is a Marketplace with a single category and with a great depth of catalog, what we have is a vertical Marketplace. Here we have a variety of examples for the retail world: ManoMano (DIY), TiendaAnimal (pets), Worten (household appliances), etc. And if we go to the world of services we have even more examples: Airbnb, Uber, Booking, etc.

How to create a Vertical Marketplace?

Until a few years ago, developing a Vertical Marketplace and achieving the same user experience we are used to in generalist Marketplaces like Amazon, was really complicated without major investments in product development, UX/UI design, integration with payment gateways, etc. 

Nowadays, it is much easier to develop Vertical Marketplaces, both to sell products and services. If you are wondering how to create your own Vertical Marketplace: 

• You can opt for low-cost solutions using No Code tools that allow you to achieve reasonable results for small projects. 

• Or use professional SaaS solutions developed for this purpose, such as Mirakl. This is the tool used by large Marketplaces such as Leroy Merlin, Maisons Du Monde, Decathlon, etc. Not only does it allow you to develop and operate the Marketplace in a simple way, but it also offers Retail Media solutions with which sellers can advertise to stand out in this new point of sale. 

In our case, we have conceptualized and developed several vertical marketplaces from scratch for Banco Santander. 

• Santander Scholarships: a Marketplace where Universities can upload their scholarship offerings and students can apply for them.

• Santander X: a Marketplace where startup accelerators or incubators, universities, etc. can upload their contests and programs for startups.

What functionalities are necessary for a Marketplace?

Trying to emulate Amazon is not an easy task and any help is not enough. In this sense, having a technological partner that allows you to abstract from the technology and focus on getting the most out of the Marketplace is fundamental.

In short, the functionalities that we are going to ask from a Marketplace are many and varied depending on the role (as you can see in the graphic below). Sellers will want tools to upload, position and promote their catalog. Buyers will want to have a very good shopping and payment experience. And the Marketplace itself needs tools to manage the whole operation.

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