site & platform
Platforms have forced many industries to change. They respond to the needs of communities and are capable of undermining complete business models. What is a platform and why can they be so powerful?
Platforms build a bridge between suppliers and a community without the intervention of a company. Uber, AirBNB, Alibaba and Amazon are platforms that have overthrown entire business chains.
In contrast to more traditional business models, platforms do not purchase anything, have no stock and operate on a transaction commission basis. Our own platform TheONE works the same way. We bring supply and demand together and only charge a commission on financial transactions.
Another difference with the more traditional companies is that a platform always consists of multiple entry points. Most platforms include at least one site and one app, but physical shops and social media shops are also possible.
- Building a bridge between suppliers and a communion
- No purchasing
- No stock
- Commission on transactions
- Multiple entry points
why are platforms more successful than e-commerce sites?
Informative and e-commerce sites may as well attract a community as platforms, but the difference is that platforms are scalable and self-regulating. The content of a platform is always partly or fully user generated. So not the company itself, but the providers maintain the offer and the prices. The only thing a platform does is to facilitate the connection between supply and demand. This saves a lot of time, effort and therefore costs. They also shift the stock risk and service to the supplier. Sometimes the suppliers are even responsible for the logistics. In addition, platforms can fully focus on what they are good at. Namely the further development and innovation of their platform.
can traditional companies transform into a platform?
Uber, Alibaba, AirBNB and Amazon have been set up to be a platform right from the start. Although Amazon was initially an e-commerce site, its founder Bozos already had the idea of becoming a platform at the end of the 1990s. Still, it is not impossible to transform as a traditional company into a platform.
In 2015 the retail chain Kijkshop was almost bankrupt due to the ever decreasing margins. Kijkshop was one of the oldest retailers in the Netherlands and sold various household products online and in 90 shops. Because more than a million people walked into the store every month, Mindd was asked to come up with a survival plan. The owners were willing to invest one last time, but then something revolutionary had to happen.
The problem was that Kijkshop supplied all its stores itself and therefore had a huge capital need to purchase the goods. In addition, Kijkshop itself was responsible for the logistics, service handling and depreciation of old – unsold – stock.
In three months’ time, we developed a Platform (Site and App) on which all suppliers could offer their own products. The price and stock policy was their responsibility and they could do the logistics themselves or they could source from Kijkshop for a fee. In addition, the shop space in the shops was rented out and the suppliers themselves could decide which products would be displayed. Finally, we transferred the role of the shop assistant to the Kijkshop community.