Mauricio Monico is Chief Product Officer at Wish, where he focuses on “inspiring consumers to find the products they love.” He has more than 20 years of experience in product and has worked for large tech enterprises such as Microsoft, Facebook, and Google. Mauricio also helped develop the first supplier-focused marketplace intelligence and guidance system at eBay.
In our conversation, Mauricio discusses how the lines between what it means to be a marketplace versus a retailer are getting increasingly blurred, particularly as retailers leverage marketplaces and marketplaces start to employ practices traditionally seen by retailers. He talks about how marketplaces like Wish are strengthening relationships with sellers and building trust with consumers through tools like rankings and seller standards. Mauricio also shares how Wish is optimizing search features for users to easily find products related to their presumed hobbies and interests.
The lines are getting blurred on this. Retailers and ecommerce sites like Walmart and Target are no longer just pure retailers. A good chunk of their business is actually a marketplace. They leverage marketplaces as a way to mitigate some of the downsides of being a retailer, and marketplaces are doing the same in reverse. Most marketplaces are selective about the merchants they work with and try to provide guidance around the products that will do well on their platform. They know what and how their consumers like to buy.
Traditionally, the separation is that on the marketplace side, you get a lot of advantages in terms of scale. You can have a variety of different products and perspectives without carrying the inventory risks. That being said, there are a lot of other challenges you have to be prepared for, like managing merchant fraud. You also have to put systems in place to ensure merchants are complying with local laws and safety standards in each of the markets they are selling to. In Wish’s case, we have a host of reactive and proactive measures to ward off bad actors.
In many ways, marketplaces deal with much more complexity compared to traditional ecommerce companies. Ecommerce companies usually have complete control over their inventory selection, the way it is presented and described, and even the way it is priced.
That’s a challenge. The first thing is this balance of demand and supply. At eBay, we looked for searches that didn’t have enough variety in the results and worked within our business to understand who the relevant suppliers were and how to get them on board quickly to meet that demand. The world is shifting away from that. At Wish, behavior is driven by recommendations. You have to get a lot more granular on those signals. You have to understand the adoption of those recommendations. Are they actually searching for similar products, or are they looking to be inspired?
At Wish, we control the majority of logistics because a lot of our sales involve cross-border trading. While this gives us some level of control, we still rely on merchants to actually have the product that they said they have and send the products to our warehouses at the time they said they would.
This is where you play the game of scale. If you have enough merchants and products then you can, in theory, dictate the rules of the game. We incentivize merchants to adhere to a certain set of standards and behaviors. For example, if you fulfill your order in less than 24 hours, you are rewarded.
The challenge for marketplaces is, when you don’t have full control over the products, how do you drive positive behaviors from merchants? At Wish, we created metrics that would measure when a customer felt like they got something they didn’t expect. We created models that would properly recommend merchants and products that have a much higher likelihood of providing a good buying experience. Over time, we saw that merchants that provided an overall better shopping experience generated significantly more sales. When you multiply that by thousands, a marketplace can really elevate the seller standards over time.
We communicated to the sellers that they’d be less prioritized or possibly removed if they didn’t meet these standards. We also communicated to buyers by displaying the sellers with high scores to them, both as recommendations and in search. That’s tricky because when you search, you might not have enough products that all carry a “gold standard.” So how do you balance those things? To solve that, we used ranking and communication with merchants to establish these new expectations. We also gave a measured visual signal to users to indicate that the product met a certain standard.
In the early days at eBay, there was no control whatsoever. eBay started from the assumption that every merchant was good and had positive intentions. There was no such thing as a power seller or fraud control. When they started putting correctional practices into place, one of the very first things that they did was set eBay seller standards, which resulted in the eBay Top Rated Sellers (ETRS) ratings. They created badges to display that, and at that time, that transition was needed. People used to spend hours researching merchants to make sure they were trustworthy. However, adding that ETRS badge created a level of trust for merchants that had the badge and had a negative impact on the ones that didn’t.
We experiment a lot! One of the most dangerous things you can do as a marketplace product manager is assume that what did or didn’t work in the past in a different marketplace is going to behave exactly the same way today in a new marketplace. The world is changing, user behavior is changing, user needs are changing, and value propositions and the way users think about the companies they are interacting with influence the buying decision dramatically. So, when it comes to initiatives such as Wish Standards, we tested placements of those badges on our feeds, on the product description page, on the cart, and in the checkout.
As it turns out, because we’re a recommendation-based system, if you expose the badges too high up in the funnel, a good chunk of merchants recommended on the top of the funnel are going to have that badge. It becomes noisy and consumers become desensitized to the badge. After further testing, we concluded that the product description page was the best place for us to display the seller badge.
There wasn’t anything that was actually objectively negative. As a bit of a caveat here, the majority of changes that you make on the merchant side of the house aren’t actually A/B testable. We tend to test our conversion rates over time by looking at retention, refund rates, and bad buyer experiences. Within the context of our Wish Standards program, I think the biggest surprise to us was the top-of-funnel exposure because it wasn’t statistically significant, but it was a little bit negative when we introduced the badge. We couldn’t understand why. As it turned out, it devalued the badge.
One of the things that is unique about Wish is the way we expose products to potential customers. We look into the added value of combining a certain product with a user interest or hobby. It’s no longer about, “Hey, I have this bread pan to sell,” for example, but presenting that bread pan in the context of a baking hobbyist. We can expose that bread pan, plus this dough scraper, plus this apron, etc., which, together, form the basics of what you need to bake bread for the first time.
The other thing that differentiates us from other marketplaces is that a lot of the products we sell are unique. You wouldn’t even know they existed until we recommend them to you on Wish. A lot of those products would never do well on a search-led platform like Amazon because consumers would simply never search for it. It’s these kinds of products that do very well on Wish.
It’s a blend. At one point at Google, I was managing a portion of Google Search’s growth teams. One of those teams was notifications. We had a huge team focused on creating very complex AI models to determine which notifications to send to users. What would you have searched that we can just preemptively send notifications for? Google is large enough that any improvement is going to be marginal. We had hundreds of people working on this model, so we’d get a certain amount of improvements based on that. One copy change to the notification had more impact than the rest of the team’s work combined. So you have to mix those two things.
The easy funnel optimization thing is extremely meaningful no matter how you cut it. On the Wish side, same thing. We have a really important team that’s focused on AI recommendations and the products that we put in front of our customers. This is our bread and butter. But at the same time, very simple changes, like pure vertical optimization, can have outsized impacts on things that we’re doing. If we reduce the size of a headline, now we can fit a few more recommended products, for example. That has an impact that’s multiple times the input required to reduce the headline.
It’s a mix. If I was trying to minimize friction to such a degree that you would come in, I’d show you a product, you’d click on that product, and I’d try to get you to check out from that point on. Then, I’d remove all the other distractions or barriers. I wouldn’t show you any other products, and I’d push you toward a one-click checkout option. But in providing that kind of frictionless journey, you are missing out on a lot of great opportunities.
A lot of our items on Wish are not everyday essentials. Instead, they’re often fun items that bring joy. But there are two things here: first, it’s usually about your passion, so you’re actually excited to see more, and two, our business model works if I can get you to build a basket.
So what we want to do is optimize for two things. One is that you’re building the baskets of at least $10 when you’re actually buying something. Two is that those $10 should be correlated to the passions you have and there is a lot of insight and inspiration to guide you. Part of the friction that we put into the system is to get you to discover more and to continue engaging, almost as if it’s a social site, up to the point that you’re ready to check out.
I think that there are a few things. One is that the boundaries between traditional retailers and marketplaces are going to continue to get even more blurred. You’re going to see more marketplaces stepping into the role of the retailer and more retailers stepping into the marketplace world.
Another trend I think we’ll see is marketplaces making a concerted effort to consolidate their supplier base. Gone are the days where the more suppliers you have, the better. Many marketplaces like Wish are becoming far more selective on the supply side as they recognize how critical their merchant selection is to their value proposition.
Another thing that I see happening is the move away from search to discovery-led shopping. This is something that Wish has been at the forefront of since the very beginning. What feels like a very personalized shopping experience is built around AI-powered recommendation engines. These provide recommendations based on the user’s engagement with certain products, categories, and brands, for example. We’ve only just scratched the surface with some of these tools, but I think we’ll see their sophistication and capabilities skyrocket over the coming years.
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