McKinsey & Company is a leading management consulting firm that works with major companies on a global scale. They serve the most preeminent institutions globally on strategic topics as well as operational improvement programs.
Dr. Thomas Schumacher is a partner in the Düsseldorf office and a Leader of the European Media Practice as well as the Private Equity Practice. He is a guest speaker at the forthcoming Property Portal Watch conference in Lisbon.
Can you tell me a bit about your role and what you do at McKinsey?
I am a global expert in online marketplaces like online classified companies, food delivery marketplaces, and e-commerce.
I work with global classifieds marketplaces in real estate, automotive, and general classifieds and have published articles on the future of the industry. I also work with food marketplaces and have helped clients to scale up their business model into a few successful IPOs.
What are some of the trends you are seeing at the moment?
Historically, we saw two main models for online classifieds players – however, over the last few years several new types of online classifieds players have tried to enter the market.
The new players ride on the back of three major trends:
1) User behavior is changing. Users are more fragmented in their behavior, have higher consumer expectations towards usability and customer experience, and are increasingly social.
2) New competitors are arising: We see the rise of the social giants like Facebook, increasingly vertical pure players that fuel growth through M&A, and a mobile-first app revolution.
3) Also, technology is changing the game – with increasing personalization, the availability of massive amounts of data is changing the game, and scale gets increasingly important to master this.
What are 3 tips that you would give online classifieds sites who are competing with some of the bigger players such as Mitula and Facebook Marketplace?
The online classifieds industry is at a tipping point – there will be a new normal in the future with more scale but still local content. So especially vertical players, for example- in the real estate space – need to double down on new capabilities.
1) Improve end-to-end customer experience and value adding services and move deeper into value chain
2) Upscale your execution game: Think like a private equity owner and optimize performance and cost efficiency to have resources to invest
3) Aim for scale: Enter into new markets with scalable models to build a global reach or at least have the scale to master the new technologies.
What are 3 key areas where online classifieds businesses fail and what can they do to stay relevant?
The leading players of today get increasingly challenged because they have a playbook: how to “attack” the classical print advertising spend. While this is still important, the players are struggling with three main areas.
1. They need to engage consumers after the “find and search phase” and provide a deeper, more specialized and tailored customer experience
2. Go deeper into the data – leverage your customer data and become a real “CRM and marketing/lead tool” for agents that really provides value and a massively positive RoI. Move beyond a listing business into a performance medium.
3. Agents have more needs than just advertising for demand generation. Players need to develop a new leg with a real “lead engine business”, crucial in financing, insurance et cetera.