The future of e-commerce is services

For the past 20 years, digitization has been a no-brainer as a growth generation strategy. For this reason, it is striking that e-commerce doesn’t reflect the economy at this point: services represent over ⅔ of value-added world GDP while only ¼ of e-commerce volumes. 

Service organizations have not, until now, capitalized on e-commerce opportunities, yet they have an unfair advantage in the distribution of services at scale through their existing provider networks. Service e-commerce is going to be the next big thing and our focus is on getting there.

In 2008, we were asked to build a particular type of eCommerce platform: one that would connect heavy construction equipment rental companies with construction sites. This was a rental marketplace, a subcategory of service marketplaces. 

No one grasped how exotic this eCommerce platform was until we realized that none of the best-of-breed eCommerce solutions fit its core needs. How to have the product delivered in a precise place on a precise day and manage its return? How to make the price a function of these two dates? How to rate the experience rather than the product? How to even get meaningful search results? 

This experience could have been anecdotal except that it has been, since 2008, only one project among thousands. Start-ups have born and have died trying to digitize the distribution of service verticals. Some have become bigger behemoths than the industry they were trying to disrupt. Rental marketplaces, B2C service marketplaces or B2B marketplaces bundling goods and services in larger services have become the largest platforms on the internet.

buyer and seller negotiating on a marketplace

The winning service organizations will be those who became e-commerce platforms

We are now living in the decade of the digital economy where retail goods are eCommerce first. 2 billion people make purchases every day online. The scale and the customer experience provided by eCommerce is unmatched. At this point, the survival of service organizations depends on their rapid adoption of a digitization strategy. 

Platforming distribution has provided an elegant solution to the number one scaling challenge facing service organizations: making human resources available everywhere at any time by leveraging local networks of service providers. What has been a VC cash burning challenge for start-ups is an unfair advantage for service organizations undertaking the digital transformation of their service distribution. With their strong brands and network of service providers, time-to-market can be as much as 6X faster than that which would be required for a start-up.

features for service providers on a marketplace

Large scale service organizations have an unfair advantage in the digitization of service distribution

Selling services through an online platform requires specific features and application architecture. Services are intangibles only existing during their execution window, not relying on stock units but rather on their availability at the right time and place. Matching offer and demand is a dynamic two sided challenge in which service vendors also have stringent requirements. 

Service organizations have not historically been online vendors; they can’t rely on an eCommerce ecosystem to bring them up to speed. Therefore they shouldn’t have to build their service marketplace from scratch. That is why we built a solution, encompassing the eCommerce culture and tailor-made for managing and selling services online. Becoming a lab for a positive sum game where great ideas benefit all service companies is Second’s purpose. We absorb economies of scale in the process to be a long term partner. Today our technology is reliably used on all continents and across all industries.

Build a service marketplace