How would you improve Facebook Marketplace?

1. Clarify

We want to improve the Marketplace feature, where people buy/sell stuff? Yep. This is basically a two-sided market with sellers/buyers and are we focusing on any particular things to improve? You can decide

2. Company mission 

The goal of the feature is to help people sell their stuff on one side and help others find (usually used) stuff - on the other. It aligns well with Metas's mission to build tools that help build communities and bring people closer together, since the marketplace by itself is a community.

3. Business goals: Any specific ones to track?

• Acquisition 

• Engagement

• Retention

• Upto you.

         Ok, Meta has billions of users right now, so rather than focussing on acquisition, lets focus on increasing engagement of Marketplace

   4. Segment the users

      Buyer : 

• Customers looking for specific stuff (These customers are regularly checking from Marketplace and buy atleast once a month)

• Customers buying general stuff once a while (furniture)

      Seller 

• One time sellers (Selling one time furniture etc)

• SMBs (Local business trying to create awareness and generate revenues)

• Brand Names (Dyson, Cascade etc) finding another avenue to sell their products

If no specific one , can we pick customers looking for specific stuff

User Pain Points

• Customers looking for items relevant to specific occasions, milestones etc but not clear how to search for (Ex: They want to gifit or buy for their Birthdays, anniversaries, special festival related stuff not available commonly on other marketplaces). (High)

• Customer is unsure whether the price is fixed or negotiable. Sometimes they prefer negotiable prices and have to ask the buyer and it could go back and forth (Relatively low impact)

• Customer unsure if the item is still available. Some sellers mention in the label ( if the item is posted here, it means it is still available) - relatively low impact, ideally item sold should be taken off

• Customer wants to share the item with their community if they are really happy with the product purchase(High)

Solutions

  We will focus on below ones as development is relatively low and impact is hig

Allow buyers creating tags for products (Birthday gift, anniversary gift, Chinese New Year, Christmas)

Customers getting curated list selection and notifications or recommendations pop up– “Something for friend’s birthday”, “Light up your Christmas with this” based on data match of their friends bday, their anniversaries etc
 

     Metrics to measure:

% DAU, %MAU buyers using this feature

%  DAU, %MAU customers using this feature

 Secondary metrics

 % increase by milestones ( i,e. Which milestones is getting popularity)

To summarize, we are focusing on Marketplace with intention to increase engagement of customers who are looking for specific products. To delight them, we would present a curated list of products based on occasions ( friend's bday, their anniversaries, festivals) We would allow buyers to create tags for such occasions and customers to get notifications prior to the anniversariy, bday to look out for these products. Trade offs to evaluate - Customers might not prefer another pop ups etc.. We need to do A/B testing to prove our hypothesis

Question: Improve FB marketplace

Scoping:  FB market place is the product that allows sellers to offer services and products for purchase by buyers. Is that accurate? 

I: Yes.

M: Is there something which FB thinks need to be improved in FB marketplace?

I: We are looking for improvement in sales and retention.

M: Are customer acquisition metrics doing well?

I: Yes

M: Do you have any timeframe that I should keep in mind for any solution that I propose?

I: No, we  are interested in the best solution.

M:: I plan to choose sales as the metric for this exercise, as by increasing sales, you generally are increasing retention too. But before I start, by sales do you mean number of transactions completed on Marketplace or revenue. 

I: Which one do you think we should consider?

M: I would go with # number of transactions completed, since the other metric is retention. However, revenue is also a good metrc to consider.

I: # of transactions is fine.

Framework: I'm going to use the following framework, First segment the customers, choose a segment and list their pain points. Select pain points that have highest impact. Present solutions to address those painpoints and prioritize them for implementation. I will then present metrics to measure success and summarize my answer to the question.

Customer Segmentation:

Broadly there are two types of customers - Buyers and Sellers. Each of these could be organizations, non-profits, mom/pop stores, individuals or groups. 

So, I'm going to present one set of painpoints and classify them as S or B based on whether it is seller related or buyer related.

User journey - Arrive at marketplace -> Search for product -> look at products -> Select product -> communicate with seller -> buy -> exit.

Pain points:

1. B: Need lot of sellers for a product so that the price is competitive.

2. S: Need to know the customers needs so that I can advertise the availability of the product directly to the customer

3. B:  ordered list of products based on buyer's requirements

4. S/B: Need to know the people/orgs involved are trustworthy.

5. S/B: Privacy 

6. S/B: Easy way to communicate and pay

7. S/B: Improved search capability.

8: B: Many verticals - including high price tickets such as cars (new and used), 

9. Rain-check

Of these, I would focus on 4, 5, 7 and 9. These are some of the biggest painpoints that many shoppers struggle with when shopping on Craigslist or Nextdoor etc. I believe that this could get customers to move away from others to FB marketplace. 

Potential Solutions: (Impact to #transactions)

I solely prioritize this on impact as for a company like FB, with the available technical expertise at its disposal technology and cost are not high in the priority list.

4: S/B: Need to know the people/orgs involved are trustworthy 

    - FB presents a trust score along with the buyer's and seller's identity - This could be based on verification of their identity as well as the credit-worthy ness. A list of the number of successful transactions conducted by the seller for the product that the buyer is interested is also listed. - H

   -  Rating of the seller by other buyers and the buyer by other sellers (like what Uber/Lyft do) - M

5. Privacy 

      - (post-MVP) Allows the identity of the buyer and seller (if it is an individual) to be anonymous. All transactions are brokered by Facebook. Facebook can request on behalf of the buyer and charge the seller's credit card when transaction is completed. In this world of increasing online privacy concerns, this will help drive customers to move toward FB Marketplace. Impact -M

7. Improved Search capability 

     -  Search results automatically ordered by seller signals, not the standard mechanism - Impact High. This gives the user better UX and saves time in getting to the product that the user wishes to buy. In other words use AI and ML liberally to generate the best UX for the buyer. Minimize the time to get to the perfect product. 

     - (post-MVP) Signals sent to the seller so that the appropriate characteristic of the product that is of interest to the user is dynamically displayed. Potentially integrate with VR (Occulus customers) - Impact High 

9: Rain-check - Helps the feature to fail gracefully. Allows the user to put in a request with requirements and FB will communicate when the appropriate product is available. 

Prioritization

For the first version, I would implement all the features that have high impact (and not-listed as post-MVP). All these features will help gravitate users toward FB marketplace as opposed to competition, helping in increase in transactions. 

Metrics

1. Increase in the # of people visiting Marketplace

2. Increase in the # of transactions

3. Search performance

4. Retention increase due to rain-check feature. 

5. Increase in FB revenue 

6. Net promoter score. 

Summary

I presented some of the pain points of the current marketplace, as I understand it, the presented several pain points essentially following the user journey of the buyer. I then presented four solutions for implementation in the MVP that I believe will improve the number of transactions. I concluded by presenting the metrics to measure the success of the feature.

Me: So, my understanding of Facebook marketplace is where Facebook users can post to sell things and also buy things posted on the marketplace. May I ask what the goal of this is - is it to improve customer experience? or to increase revenue? increase engagement? 

Interviewer: you decide. 

Me: Well, if I had to pick one from the above options, I will like to move forward with improving customer experience on the Facebook marketplace as I see that will really help us improve the engagement and given Facebooks already large user base, it could also result in increased revenue. I will start by stating the different users of marketplace and their needs:

1) Someone who has moved to a new city and wants to buy everything from furniture, a house to a car. 

2) A Facebook user who goes to the marketplace to just scroll through the items and is not actively looking to buy something specific unless they come across something they really like. 

3) On the seller side, our user can be someone who is either looking to sell almost all of their things because they are moving out or someone who wants to get rid of some things because they are not using it anymore.

I would prioritize the above options based on cost of implementation, impact to customers.

I would like to focus on the first type of users, as it has a high impact on customers with medium cost to the company.

Now, the customer journey of a user shopping on FB marketplace is as below:

1)     Go to the marketplace and decide on what category of item they want to shop for. This can be below categories:

a.     Furniture

b.     Appliances

c.     TV/electronics

d.     Cars

e.     Decorative items

f.       Utensils

2)     Decide whether they want to buy new items or used items

3)     Scroll through the listings

4)     Check the distance of the location of where the item is available

5)     Check if the item can be delivered or needs to be picked up

6)     Select the items

7)     Make payment

Here are some areas where I feel we can enhance customer experience in the above journey.

1)     Currently the user has to search through individual items to buy. This is where FB marketplace can offer theme based listings which would package various items the user is interested in and display it to the user. For example, it could have a list of sofa sets, dining table, TV, paintings, Bed, vacuum cleaner etc bundled together and instead if searching individual items, the user can select the entire bundle for purchase.

2)     User has to go to various locations to pick up items – offering a bundle listing, FB can collaborate with the sellers for delivery options. Delivering everything at once will also save on delivery costs.

3)     One of a customer’s major concerns when buying items in the marketplace is trust. We can increase customers trust by FB acting as a middle layer and verifying the sellers and showing it to the users. Because FB would be bundling these items together, they can pick the items from their trusted sellers.

4)     FB can have a questionnaire that the user fills that will help FB gauge users interests and the type/theme of items they are looking for.

Some KPIs that I can think of to measure the features success are:

1)     Number of users filling the questionnaire – this will show interest

2)     Number of bundle options that are shown to the customer based on their interests – this will show the success of FB marketplace algorithm in showing the users what they want.

3)     Number of users buying the bundle – this will show user commitment

4)     Number of users sharing bundles with their friends/network

5)     Number of users selecting specific items in the bundle instead of the entire bundle

Some tradeoffs I can think of with this new bundle feature are below:

1)     FBs mission is to connect please across the world, the option of FB getting involved between the sellers and buyers might not be in line with the company’s vision.

2)     FB is sort of acting as a guarantor when it puts its validation mark on a seller – negative experiences from these sellers can cause customers to lose trust in FB.

3)     The overhead of accumulating all items in the bundle together for delivery could be costly for FB.

To summarize, I propose that we target FB users who have moved to a new city and are looking to buy an entire household of items by introducing a concept of bundle which would help these users buy all items together thereby reducing the friction of picking items individually.  

Product/Scope

FB mktplace brings buyers and sellers together on facebook platform, and indeed almost everyone is assumed to be on FB.

I would think better adoption within existing FB userbase would bring it to truly compete with etsy, craiglist. This  would be a strategic business goal as it will lead to "connecting" the world for business beyond just social. Platform wise FB is mobile first and same should hold good for mktplace as well

Metric to target

• New Users: acquiring new users (from subset of existing FB) would definitely indicate adoption
• Active Users: growing MAUs would indicate users turn to mktplace for transactions, and indicates loyalty
• Engagement: buyers looking more, and buying more; more listings by seller would indicate good adoption
• Revenue: mktplace is not a revenue driver for FB, and its adoption by masses would eventually lead to monetization via ads, and to lesser extent by %commissions from business
• Retention: unless mktplace experience has subpar experience, churn would be avoided by adoption

User Persona

• Homes trying to buy low value items to save some $$$
• Families trying to dispose no longer used items to make some quick bucks
• Businesses trying to gain additional market where buying decisions are visual, and for low value items
• Temp/shared accommodation setup & teardowns

Scenarios

• Seller finds FB marketplace
• Creates a listing, with highlights/pics, price
• Buyer discovers item of interest
• Negotiates with Seller with safety
• Makes the transaction
• Goods are delivered
• Review process kicks in to build (or warn) seller's reputation

Pain points

1. Discovery - FB users don’t know items of there interest are available on mktgplace
2. Sellers don’t know that FB mktplace opens up a huge market
3. Individual sellers need the logistics support for payment, and delivery
4. Buyers have trust concerns on purchasing, since most deals are local in person
    

Solution options

• Popup ads matching buyers persona, lifestage & mktplace listings via AI; this will actually pull in sellers as well with better awareness
• FB's strength is social, amplify "great deal" stories across the buyer-seller circles
• Tieup with simple payment gateways like paypal (or promote FB money) in seamless manner so that cash aspect is eliminated. Adding a layer of escrow will significantly enhance trust on both sides e.g. sellers knows payment is in escrow before delivery; ack from buyer that goods were recvd within 60 min of payment

Evaluation

• Payment is at the end of journey, but we have discovery issues. Similarly social amplification needs deals to happen in the 1st place
• Precise 1st party FB ads is the best feature to put in

Feedback loop

• #ads shown for listings
• CTR for these ad listing
• First/Last touch Attribution of user activity to such ads

Summary

Showcase existing listings pro bono to FB users to pique their interest, that will pull in sellers and rest of the funnel