By Garry Jones, CEO, NovaFori
Trying to make predictions can be somewhat hazardous, but in the world of B2B digital marketplaces it is possible to point to trends that have emerged and, if anything, accelerated during the pandemic that will continue in 2022.
The growth of digital over the past two years is a much talked about consequence of the pandemic and there is no question that there has been a dramatic acceleration in the digital transformation of lives and businesses. But digitalisation is a trend that has been underway for a lot longer, which is fortunate because it has reduced the disruption and meant that for many businesses the change has been seamless.
Digital marketplaces were well-established before the pandemic but have gained greater traction during the last two years as businesses sought ways to reach new markets and improve value chains, and because of other drivers of change, such as the corporate push to comply with UN Sustainable Development Goals. The trend toward digital marketplaces is set to gain momentum as more businesses recognise the value they offer in terms of transparency, speed and security.
Elevating brands, creating value
Amid that continued growth, however, there will be more nuanced changes. What we see among B2B businesses is a growing desire to work with partner ecosystems that can be creators of value, rather than channels to markets – purely pipelines between A and B. Digital marketplaces can play that role across both the supply chain and the value chain for businesses, bringing transparency, liquidity and efficiency to transactions in a way that is completely secure. This brings value at any time, matching buyers and sellers remotely, making recommendations and optimising the pricing to meet specific user needs.
In the world of digital, there is a risk that intangible, often ethereal, brand value can be diluted amid a multitude of different choices and prices. This is why digital marketplaces can be a business’s friend, providing a means not just to ramp up sales, but also to protect and help build brands. The most sophisticated digital marketplaces offer a user experience (UX) and user interface (UI) design that burnishes the brand image, allowing the buyer to fully understand and appreciate the brand value.
In the coming year, we will see greater emphasis put on brand protection, if not elevation, across leading digital marketplaces. Brands will look to move away from platforms that don’t provide increased brand value and customer retention.
In the B2B space, businesses will look at how the marketplace can add value to the business through the value chain and as needed in the supply chain, for a more holistic brand value enhancement that goes beyond simply the end-product. They will look harder at the experience architecture, such as transparency in pricing and counterparty understanding, order management, payments and inventory optimisation. The trend towards smarter – more autonomous and automated – solutions will continue in 2022.
Leveraging data science and auctioneering knowhow
According to Forrester, the research and consulting firm, in 2022, only 10% of B2B organisations will identify metrics to measure the value created for buyers during the buying process.
It is in situations like this that specialist digital marketplace providers which draw on sophisticated data science technology and auction experience can really make a difference. At NovaFori, we have deep experience across a range of industries, from commodities and shipping to automotive and fine art. Our experience has helped us create markets for more niche sectors including the IPv4 market and carbon trading as well.
Take the second-hand automotive sector. Here, digital marketplaces give access to a pool of thousands of vehicles, making it possible for professional buyers to browse and purchase cars that most suit their needs, rather than simply having to take what is available locally. NovaFori deploys data science to make recommendations that can be refined based on user actions on the platform, such as bids, substitutions and won lots, resulting in tailored recommendations boosting trade volumes. NovaFori’s recommendation engine contributes to the volume of vehicles sold, with a significant increase observed in average sales prices.
Businesses stepping in
A trend that will continue in 2022 and beyond is that of businesses and investors stepping in where governments let the market take the lead. Forrester’s 2021 Global Trust Imperative Survey found that consumers in the US, UK, France and India find companies responsive to market trends and, when operating in tandem with governments, can make a real difference on issues impacting greater society.
This is particularly evident in the growing push by investors and consumers for companies to be ESG compliant. This includes achieving net zero carbon emissions within an agreed timeframe, which has put the spotlight on carbon credit marketplaces.
Yet, the market for carbon offsets will only grow in popularity in the wake of COP26 if expectations of transparency and fairness can be met. NovaFori is providing the digital infrastructure for the Singapore-based global carbon credit marketplace, Climate Impact X (CIX), helping to deliver on its mission to enhance the transparency, integrity and quality of carbon credits, with the aim of delivering tangible and lasting environmental impact.
The infrastructure allows users to buy from a curated selection of premium carbon credit projects, catering to a broad range of corporates. The platform integrates NovaFori’s auction and trading technology with transparent environmental impact, risk and pricing data from market leading partners in the carbon credit space, to verify high-quality carbon reduction and prevention projects and deliver an end-to-end solution for carbon credit trading.
So, looking to 2022 as the world hopefully emerges from the disruption of the pandemic, digitalisation combined with a rapidly changing business dynamic will support the trend towards these new marketplace opportunities. Their efficacy and benefits are obvious, and while it may involve investment and even a rethink in some business areas, those willing to take the plunge will position themselves well to benefit in the future.