By Ian Jindal, experienced multichannel retailer and Editor-in-Chief of InternetRetailing
It’s a new era for marketplaces and retailers, after many years of debate and unease between the two. Once seen as a platform for SMEs, artisan businesses and niche retailers, marketplaces are now becoming a powerful force within the retail industry.
You only have to ask consumers where they start their search for goods online and be flooded with replies that all point to marketplaces, such as Amazon and eBay. In fact, more than half of US shoppers report starting their retail searches on Amazon, according to BloomReach1. So, why were major brands so set on avoiding these marketplaces initially?
When marketplaces first established themselves online major brands avoided selling their products through their platforms. This was due to believing that selling via these third party sites would result in a loss of control over the way they presented their brand and reduced loyalty from customers, due to the ease of jumping from one business to another. Furthermore, there was fear that by incorporating third party sites into their selling strategy it would result in a loss of data and insight which retailers gather through their own websites when sales take place.
However, opinions from major retailers are now changing. One of the main causes for this is that these organisations are seeing how valuable marketplaces are viewed by consumers because of their: unparalleled choice, competitive price and convenience. With potential buyers being able to order, and then re-order, products in a single smartphone click anywhere in the world, big brands are starting to find value with marketplaces.
The Power of the Marketplace
Marketplaces are big business. In financial year 2016, Alibaba, the world’s largest online and mobile commerce company in regards to gross merchandise volume, made total revenues of $15.7 billion.2 Leader in China, Alibaba is the platform retailers must sell on if they are wanting to break into the Chinese market.
With a one-stop shop mentality, consumers are able to go to one site and order everything that they need. On the Tmall site, the same happens, consumers can purchase items from retailers based in China and internationally, meaning they no longer have to search through four or five sites to access what they want. Instead one click to Tmall will support all of their needs; the perfect solution for any consumer.
Additionally, with marketplaces introducing more ease of use when ordering products, such as Amazon’s one-click reorder button, consumers are finding these platforms more consumer-friendly and tailored to their needs. In the age of fast-paced lives and demand for everything to be done yesterday, it is marketplaces who are winning consumers based on their efficiency.
But it’s not just the ease and efficiency of marketplaces that are attracting consumers. The crackdown on counterfeit goods and partnerships with major brands has caused a digital migration to marketplaces. With trust assured purchases, consumers are guaranteed to be buying the real-deal.
Therefore, it’s time for retailers to make the leap and join these marketplaces. By doing so it provides consumers with easier access to merchants’ products and allows a wider consumer audience than would be exposed to your brand compared to a company website alone. Retailers may not gain the insight into customer behaviour that they value, but they’ll gain the contact details for shoppers that they can then target and persuade to shop directly on their own websites, and in their stores.
Marketplaces, eCommerce and the Future
Marketplaces, international strategy and latest ecommerce trends are only some of the themes that will be addressed in this year’s InternetRetailing Expo, set to unveil the future of the retail nation.
Taking place on 5th and 6th April at the NEC Birmingham, the event will showcase latest innovations, initiatives and technology, as well as world-class speakers from brands such as Alibaba Group, Lululemon, Google, Harrods, LEGO, John Lewis, Volkswagen, Schuh, GAME and Made.com.
Find out more and register for free at www.internetretailingexpo.com