“In two to three years from now, we [predict] every single digital platform is going to become shoppable. Everything is going to become a marketplace,” said Huge’s global head of commerce Holden Bale in his opening remarks during last week’s BoF Live event.

Indeed, before the pandemic, the traditional marketplace model was already an area of considerable growth. However, Covid-19 proved a catalyst for further acceleration. Huge reports that, today, more than 60 percent of all global online spending occurs via digital marketplaces — equating to almost $2.9 trillion. Its recent “Future of Marketplaces” report examines and debunks the marketplace landscape, distilling areas of growth and innovation for the fashion community to know now.

In conversation with BoF’s Alice Gividen, Holden Bale, Huge’s global head of commerce, and Steve Dool, brand director at Depop, shared their insights on the range of marketplace trends and new functionalities that are transforming user experiences while also presenting powerful growth opportunities for brands.

Here, BoF shares key insights from the conversation.

Watch the conversation on How Marketplace Models Can Drive Growth in Fashion in the video above.

Meet Customers Where They Spend Time

HB: Today, we’re almost asking, “what access can you not gain through marketplaces?” Social platforms like Snap, TikTok and Pinterest are focusing on commerce because we’re seeing the traditional purchase funnel disappear and the increasing consumer expectation that you can just transact at the point of inspiration — wherever that is.

So if you’re thinking about gearing yourself towards a more content-driven, serendipitous experience for customers, brands [should] start exploring commerce through a lens of these bi-directional social platforms.

In our last quarterly research report, 70 percent of North American consumers said they had purchased at least once through social media. That was a huge inflection point for us. You also see it in media. BuzzFeed is [citing] commerce as a strategy pillar in its analyst calls and it is testing a marketplace that basically takes its buying guides and makes them shoppable. So, if you want to play with curation, if you want to play with editorial, do you look at a marketplace through that angle? It’s about what is true to your brand and how you want to engage with consumers. And frankly, there’s a marketplace for you out there.

SD: At Depop, we have seen sustainability become a mainstream concept and a really strong motivator for people to join Depop and spend time there. While sustainability is important, affordability is still paramount. We know from surveys within the Depop community that 75 percent of [our consumers] are buying on Depop and buying secondhand because it aligns with their values, while 65 percent of our communities say that price is the reason they are here too.

So we look to collaborate with the industry at large to make an impact. It’s why we work with charity shops and bring them onboard, so they can offload more merchandise and more inventory than they can possibly ever put on their shop floor. It’s why we also work with fashion brands to bring them onboard too, to [introduce them] to our consumer base and solve a problem for them.

Use Platforms to Improve Operational Excellence

HB: Marketplaces are expanding into full service logistics companies to the point where they care less about [brands] selling on the platform — moving away from a pure marketplace [model]. It makes sense because in many cases, giants have the most sophisticated supply chains in their respective regions.

JD has what is more or less the most mature drone delivery network in the world for tier two and tier three cities in China. Meanwhile Mercado Libre and Rakuten have freight forwarding, warehousing logistics, cross-border tax and regulatory services that help you expand into Japan or certain countries in Latin America without even having to register for formal business. There’s even been some hype suggesting Amazon is going to go to market to compete with UPS and FedEx directly.

Ultimately, there’s this concept of “business as a service” and it’s been very popular in Asia Pacific because it has enabled creators and designers to launch brands almost entirely on marketplace platforms with no supply chain and minimal product development.

SD: For us, as a peer-to-peer marketplace, we don’t handle any inventory and we are not responsible for the fulfilment of orders. What we see as our role is […] enriching that end-to-end experience. We work a lot with the in-app experience. We keep all of the transaction comms in-app so that if a dispute does arise, we have a team who can see the whole picture. We also have Depop payments where we can track payments and look at how those are going. We give our sellers all the information they need to be successful there — and offer incentives to ship on time.

The other element of it is looking at where it goes just beyond what we think of as logistics. We have done a lot, for example, to become climate neutral in terms of carbon emissions from all of our sellers on the platform, not just from us and our operations as a business, because that builds trust in the platform, in the sellers, and creates a rich experience for people who are maybe not used to shopping in that model. We want to make it as smooth as possible based on whatever we’re offering the customer ultimately.

If, by 2027, all digital advertising is natively shoppable, everything is going to feel like a marketplace. I would highly advise [brands] to be there.

Leverage Marketplace Engagement Tools to Build a Community

HB: At Huge, we talk a lot about open versus closed-source brands — and how the open-source brands are more comfortable with community and culture and bi-directional engagement. Those brands are intrinsically more fluid and more [able] to operate in all of these various different formats.

We are seeing platforms allow direct brand-to-customer interaction. Not just through service emails, but actually being able to chat on Tmall and connect through WeChat for a one-on-one conversation. Marketplaces are inching towards this. It’s giving [brands] the capability to own ad formats and run their own livestreams on platforms.

If, by 2027, all digital advertising is natively shoppable, everything is going to feel like a marketplace. Brands can be there or not be there — I would highly advise [them] to be there.

SD: Shoppers are ultimately looking for connection, community and, to a certain degree, some kind of consumption as well — whether it’s content or a commercial transaction. What that does for us is it underscores the need to make sure that we are making community front and centre of what we do. That’s true for a lot of marketplaces.

Now, there are obviously a lot of questions around capability versus opportunity. Just because we have the tech to do something, does it make sense for us to do it? Does our community really want us to do that? Is it going to move the needle in any kind of meaningful way? All those are important questions to grapple with.

Consider Marketplaces as a Metaverse Enablement Tool

HB: There’s something about Web3 that is intrinsically communal. It should be partnership-based and involve co-creation. We see the velocity of the adoption of these new technologies. By 2027, as part of our prediction, almost all of the marketplace giants will offer metaverse enablement. They will tack it on to their existing business services. They have the infrastructure, the consumer base, the engineering talent to mint NFTs, to develop studios that do 3D visualisations of your product at scale. So right now, the primary vehicles for NFT acquisition are marketplaces to begin with. It’s not long before the traditional marketplaces themselves start to offer those services.

SD: The mindset that is behind a lot of these changes — and what makes it exciting in the short-term — is Web3 and all of its decentralised elements. What does that mean for trends, for example. That will deeply affect what we do as a [marketplace].

On paper, it means the monoculture — which has already been blown to smithereens — is going to [be] even further blown to smithereens. Consumers will be gravitating to places where they can find their sub-communities and subcultures: individuals who are inspiring them and sharing those ideas. As a brand, you better make sure that when they are finding that elsewhere, you still have that capacity in your company as it stands.

This is a sponsored feature paid for by HUGE as part of a BoF partnership. This interview has been edited and condensed for clarity.