The Online Marketplace Advantage

2Defining the Marketplace Opportunity for Retail

In the early meetings with our customers, while they're still mulling their marketplace strategy, a remarkable number of them voice the same fear: “We don't want to be like Amazon.”

We've heard that same sentence, in one language or another, more times than we can count. But what is it about Amazon that they find so unsettling: Is it the company's sky‐high market capitalization? Its same‐day deliveries and strong scores for customer satisfaction? What exactly is the downside of resembling a transcendent digital powerhouse?

No, no, they say. It's not Amazon's success they want to avoid. But still, companies have a number of concerns. The first is a common misimpression that the marketplace model is inflexible and will turn them into an “everything store.” In such a scenario, they would forfeit control over quality and selection, losing control of their brand. Worse, in their minds, such an everything store would push them into deadly mano‐a‐mano competition with the dominant platforms.

This “everything store” fear is based on a false premise. Marketplace platforms are not one‐size‐fits‐all. Anything but. Most companies curate their marketplaces using a combination of technology and expertise, retaining control over the sellers, the quality of their products and services, and the overall customer experience.

It's important to keep in mind that marketplaces come in all shapes and sizes. Retail sites, says McKinsey partner Cyrielle ...