Here’s the deal: the pandemic changed everything for brands.
No longer a nice to have or a convenient buying option, consumers the world over were forced into purchasing goods and services online. This dramatic change applied to all categories, from essentials such as groceries and health to fashion and home improvement. According to Wunderman Thompson’s The Future Shopper 2021 report, 72% of global shoppers said online shopping came to their rescue in 2020.
This digital acceleration is here to stay. PwC’s June 2021 Global Consumer Insights Pulse Survey affirmed changes are sticking―signifying a historic and dramatic shift in consumer behavior as they become more comfortable than ever before with e-commerce.
What’s more, the growth isn’t equally distributed. More than 40% of all post-pandemic online spending globally is taking place on marketplaces. Etsy’s stock tripled in 2020, and now more than 60% of search queries are starting directly on a marketplace, and according to GlobalData, in the UK alone, by 2024, shoppers will spend 50% more than they do now on online marketplaces.
With customers more comfortable with digital technology and online shopping, marketplaces play a key role in the shopper journey by creating a single destination for buyers to browse, compare, select and/or buy from providers based on specific requirements.
In this blog, we explore how your brand can take advantage of the shift online and leverage marketplace growth in selling more.
A broader strategy
To remain competitive, brands should meet consumers where and how they shop. As customers become increasingly channel-agnostic, marketplaces offer brands and retailers an opportunity to diversify their online presence, bringing in new customers and incremental revenue.
Marketplaces are critical to brands. Not only do they act as an additional sales channel, but they also increase brand awareness, leading to direct customer acquisition. They can be a great way to expand into new markets and often provide a complete end-to-end experience for customers.
But marketplaces need to be considered as part of a wider distribution strategy. While winning market share is the goal, choose an appropriate distribution strategy for your business. Selling on as many marketplaces as possible could lead to price wars and make it difficult to maintain relationships.
Consider the following questions when thinking about your marketplace strategy:
- What role does each marketplace play in my overall brand goals? (i.e, international expansion, shifting discounted or overstocked product, or brand awareness)
- What will you stock on each marketplace? For example, will you stock discounted items only, your full product array, or only a selection of items?
- How will you handle the technology? It has become much easier to connect to marketplaces with a solutions provider that integrates your back-end system and connects you to multiple marketplaces.
- What ecosystem will I need? Companies like ChannelEngine offer a complete toolkit that handles content management, translation, taxes, and financial administration, while also delivering advanced pricing and repricing tools tailored to match each marketplace and country. But you’ll also need to consider fulfillment and what you want to do in-house.
The answer to your marketplace strategy will vary widely according to your brand and the kind of products you sell. For example, a luxury fashion retailer might want to consider more of an exclusive arrangement than a budget home cooking equipment brand. There’s no right or wrong here, but it’s essential to think things through.
While we tend to focus on the big-name online marketplaces such as eBay, Amazon, and Zalando, the local online marketplaces can be true heroes for a broad fan base of loyal consumers and retailers. These platforms have often developed as homegrown alternatives to Amazon and eBay, emerging before the international giants could expand into those countries.
Consider local marketplaces or marketplaces aimed at specific verticals as part of a selective distribution strategy. There are a few distinct benefits of working with local marketplaces as part of a channel strategy.
In particular, we’re seeing a lot of US and APAC brands leverage local partners and local marketplaces to test the waters in Europe. With 25 official currencies and more than 200 languages, entering into European markets isn’t always easy. Each country, of course, then has its own tax laws and customer expectations, so marketplaces can be an easy way to enter into a new continent and begin to build a brand. Look beyond Amazon, and consider it from your customers’ perspective.
How to win on marketplaces
On the Channel Engine blog, we share lots of advice for performing well on the marketplaces of your choice. Here are some quick tips: