Marketplaces Ð - FitForCommerce · Marketplaces Ð Marketplaces are becoming increasingly...

Marketplaces–

Marketplaces are becoming increasingly important selling and marketing channels for retailers and brands. Driven by demands for greater convenience, shoppers turn to these one-stop destinations to both research and buy products.

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Marketplaces | 79 © 2019

BURNING QUESTIONS

• How can I improve sales on Amazon?

• What’s new in online marketplaces?

• Should I launch my own marketplace?

Worldwide, marketplaces accounted for 52 percent of global online sales, reporting $1.8 trillion in online sales in 2018.52 In 2018, Amazon alone captured half of total ecommerce sales in the US. Still, that figure pales in comparison to the dominating position that marketplaces own in Asia-Pacific. Alibaba has operations in over 200 countries and its online sales have surpassed those of Walmart, Amazon, and eBay combined since 2015.

All trends indicate that marketplaces are poised to continue taking up a larger percentage of ecommerce over the next two to three years. Retailers should already have a marketplace strategy in place, or at the very least, be working on one, to expand reach, enhance sales and benefit from the retail technology innovations that many marketplaces offer.

THE MARKETPLACE TRIFECTA

Value

Marketplaces such as Amazon or Jet drive lower prices and greater value

for shoppers

Product Selection

Large marketplaces offer huge product selections (Amazon has over 300MM SKUs) while niche

marketplaces offer curated product selections for specific categories

Convenience

Amazon Prime with One Day Free Shipping provides the ultimate

convenience to consumers

DID YOU KNOW?

A Marketplace is an ecommerce platform that enables merchants as well as individuals to list their items for

sale or establish online storefronts and leverage the platform and its services. These include search, product

information, transactions, payments, order management, and sometimes even fulfillment. Because of the

larger number of sellers in a marketplace, the consumer benefits from greater product selection in one place.


TOOLS AND TRICKS OF THE TRADE

Most people associate marketplaces with Amazon, but Amazon is not the only marketplace that retailers and brands should consider when developing their marketplace strategies. Different types of marketplaces are extremely important when expanding globally and targeting specific audiences. There is also a significant opportunity for retailers to launch their own marketplaces to increase assortment, keep customers longer, and thereby increase sales and engagement.

Although a solid marketplace strategy can significantly increase profitability, some stay completely clear of marketplaces, while others struggle to find the optimal balance and approach. It can be beneficial to align with a partner that specializes in marketplace strategies and execution.

There are several solution providers that make it easier for organizations to publish and manage marketplace listings and execute marketing tactics. Some digital commerce platforms offer application plug-ins and extensions to help connect to marketplaces. There are also specialized software integrators or data feed managers/aggregators to connect and manage multiple marketplace accounts or data feeds.

MARKETPLACES

1. Amazon

2. Global

3. Retailer-operated

4. Niche/Vertical

OUR TAKE: It is OK to double dip

You should leverage marketplaces to increase your domestic and international sales and learn from them.

It is impossible to ignore the impact marketplaces have on the industry so better to embrace a marketplace

strategy while strengthening owned channels.

2018 ONLINE MARKETPLACE SURVEY

$1.66 trillion spent globally on the top 75 online marketplaces

Marketplace sales account for 52% of global online retail sales

$525 billion sold on US marketplaces

Source: Internet Retailer 2019 Marketplaces Report


Amazon

Part-marketplace/part-retailer Amazon has dictated and shaped the overall commerce landscape, impacting both online and offline retail. This retail Goliath is showing no signs of slowing down and grows stronger every year. Larger retailers like Best Buy and Kohl’s have been wary of partnering with Amazon in the past but they are now testing new initiatives by selling certain product lines on the marketplace and accepting in-store returns on Amazon purchases to drive more foot traffic and increase sales in their brick-and-mortar stores.

Organizations should look for smart ways to leverage Amazon as a channel to increase reach and sales. Those who want to avoid a full-fledged launch on Amazon can build a strategy that complements their business model. For instance, some sell selectively on Amazon, with only a few product categories instead of the entire product catalog. Some also opt to leverage Amazon’s global fulfillment network, enabling them to take advantage of Amazon’s distribution centers to minimize delivery times.

Amazon Marketplace Web Service (Amazon MWS) is an integrated web service API that helps Amazon sellers programmatically exchange data on listings, orders, payments, reports, and more. Data integration with Amazon enables high levels of selling automation, which can help sellers grow their business.

SEEN IN THE FIELD

Kohl’s announced that starting July 2019 all stores (more than 1,150 locations across 48 states) will be

accepting free, convenient, unpackaged returns for Amazon customers. Kohl’s will accept eligible Amazon

items, without a box or label, and return them for customers for free, providing additional service and

convenience to Amazon customers. Amazon Returns at Kohl’s creates convenient locations for Amazon

customers to return eligible Amazon.com merchandise to their local Kohl’s store. Kohl’s will also expand its

product relationship with Amazon by carrying Amazon products in more than 200 stores.53

DID YOU KNOW?

In 2019, the U.S. ecommerce market will be

dominated by Amazon ($317 Billion). This is more than

half of ecommerce spending in the U.S. (52 percent).


Global

When it comes to global expansion, the first step for most brands is marketplaces. Marketplaces dominate ecommerce in large markets in Asia-Pacific and offer a low-risk opportunity to expand reach and gauge market expansion potential before investing in a broader global expansion strategy. In Asia-Pacific, marketplaces such as Rakuten in Japan, Taobao and Tmall in China and Lazada in South East Asia, are extremely important. In China alone, 90 percent of business-to-consumer ecommerce sales originate from marketplaces, with over 50 percent dominated by Tmall.

Retailer-Operated Marketplaces

Most organizations leverage marketplaces to expand reach, while others launch their own marketplaces to combat competition. Perhaps the greatest advantage of launching a retailer-operated marketplace is the

OUR TAKE: Amazon the search engine

Some studies suggest that over 50 percent of product searches start on Amazon, surpassing, Google as

the top destination for shopping research. Rather than looking at Amazon as a competitor, look at the

marketplace as a search engine and an integral part of your marketing mix.

OUR TAKE: Dip your toes in the global pool

Use marketplaces to tap into an already-established customer base in global markets. Entry into new

markets using a marketplace strategy is a low-risk approach. What do you have to lose?

DID YOU KNOW?

Singles’ Day is a Chinese holiday started by a group of students at Nanjing University in 1993 to celebrate

being single. The date, November 11th (11/11), was chosen because the number “1” resembles an individual

who is alone. It wasn’t until 2009 that Alibaba spotted an opportunity and encouraged retailers on its

platform to offer discounts for the day and transformed Singles Day into the largest online shopping day

in the world.


ability to expand product assortment without the restraints of adding more inventory and managing distribution. With a retailer-owned marketplace, retailers can gain additional revenue streams by offering a broader product assortment.

Launching a marketplace is not a viable strategy for every organization. Online marketplaces have complex ecosystems and require the right technology and resources to achieve success. Gaining recent popularity, a few platform providers have emerged, offering technologies and services to help power these retail-operated marketplaces including vendor onboarding, product catalog integration, order routing and regulatory compliance.

REASONS FOR LAUNCHING A RETAILER-OPERATED

MARKETPLACE

• Filling in assortment gaps

• Reduced inventory/markdown risk and costs

• Offloading shipping costs

• Improved relationships with vendors/suppliers

Niche/Vertical Marketplaces

While Amazon, eBay, Alibaba, and Jet.com typically get the most attention, there are several niche and vertical marketplaces that can help retailers and brands expand reach such as Lyst, Houzz, Orchard Miles and Wanelo. Typically, these smaller marketplaces are specialized vertical platforms that target a specific audience looking to purchase a specific item or category of products. They offer different fee structures from larger marketplaces and more differentiated services such as marketing support. These smaller marketplaces provide the opportunity to reach a highly-engaged target audience through curated experiences, often integrating content and social media elements into the shopping experience.

In recent years, there has been an evolution of product directories with an affiliate business model, inspirational content sites, or even quasi-social media platforms that are turning their sites into transaction-enabled marketplaces.

SEEN IN THE FIELD

For retailers such as Staples, with product

categories that are highly competitive

with Amazon, expanding into non-core

product categories through the launch

of a marketplace is a potential life-saver.

Since launching its marketplace, Staples.

com has expanded its product selection

by 400 percent.54


SPOTLIGHT ON DATA

Marketplaces present a significant opportunity for retailers and brands to expand reach and meet demands of today’s consumers. Marketplaces are also great channels for testing demand in new markets. The data used to run and manage a marketplace business is basically the same (and just as important) as the data used to run a digital commerce business. Retailers should consistently capture and analyze the data below to optimize sales, reach and customer engagement:

• Product selling - promote best sellers, markdown or remove poor performers

• Inventory - make sure you have enough weeks of supply to fulfill projected demand

• Marketing - depending on the marketplace, such as Amazon, you can promote your products and track your ad spend and ROI

• Customer satisfaction percentage

• Merchandise fulfillment percentage

• Overall profits and losses - you want to make sure you are tracking your sales and managing your expenses so the marketplace is profitable

SEEN IN THE FIELD

Prominent in the home

décor space, Houzz delivers

curated content and

products. Initially a home-

improvement app, today, it

allows users to purchase the

products featured on the

website and app.


It’s no secret that consumer behavior is evolving. Today’s consumers have more choices than ever when it comes to discovering, purchasing and receiving products. And as a result, they’ve become more demanding.

Many of these modern expectations have evolved from their experiences on marketplaces like Amazon: Endless choices. Low, competitive prices. Easy checkout. Fast, free shipping.

This ever-evolving consumer behavior is driving much of the innovation we see across the e-commerce landscape, as well as the responses made by leading brands and retailers: smarter advertising, optimized listings and speedier fulfillment.

In some ways, Amazon — and other similar marketplaces — represents a perfect microcosm of the entire e-commerce space.

But every e-commerce innovation and opportunity — on Amazon and beyond — still revolves around one thing: the empowered consumer. If you aren’t taking steps to understand how your potential customers are searching, shopping and buying, you’re probably falling behind.

That doesn’t mean optimizing one or two marketplace strategies. It means taking a holistic look at how all of your strategies are working together to deliver the best experience for your potential customers. It means putting consumers at the very center of your advanced strategies across the full buying cycle — from marketing, to selling, to fulfilling.

Turning Browsers Into Shoppers

With more competition vying for limited screen space — especially when you consider the limited space on mobile devices — there’s only so much real estate for your products. Brands and retailers need to create sophisticated branded and non-branded strategies in their advertising campaigns to be seen early in the buying cycle. That means constantly testing, experimenting, measuring and tweaking.

Turning Shoppers Into Buyers

When it comes to selling — or, a shopper making the decision to actually buy your product — content is key. Optimizing listing content and automating a dynamic pricing strategy will lead to more top positions on marketplaces, create more visibility and, ultimately, encourage more conversions.

Putting the Consumer at the Center of Your Amazon Strategy

PROVIDED BY


Turning Buyers Into Lifelong Customers

Fulfillment is the final piece of the purchasing puzzle, and fast, inexpensive shipping options have become standard. Every company’s business model is different, so it’s up to brands and retailers to choose what fulfillment model is financially right for them and still allows them to provide the most convenient shipping options to potential consumers. Whether that’s self-fulfillment, fulfillment by third-party logistics providers (3PLs), fulfillment by marketplaces (FBA) or, most likely, a hybrid of several fulfillment types.

Choosing the right partner is essential.

ChannelAdvisor offers one streamlined solution to guide all of your most critical marketing, selling and fulfilling activities.

Our comprehensive e-commerce platform collects your product data once, and then relies on that single feed to optimize performance across hundreds of channels, including Amazon, eBay, Google, Walmart, Facebook and more. As orders and performance information flow back through the ChannelAdvisor system, results are measured and broken down to help you make better decisions about your business.

It’s how we’ve empowered thousands of online sellers — and why our name has been synonymous with e-commerce growth for nearly two decades.

And it’s why we’ve been named the #1 marketplace management provider to the Internet Retailer Top 1000 since 2013.

Maximize Marketing

Our unique blend of e-commerce expertise and advanced technology means you’ll have everything you need to engage with consumers at the most critical stage of the buyers’ journey — offering the right product, to the right consumer, at the right time.

Increase Sales

From stronger pricing strategies to more accurate inventory forecasts, ChannelAdvisor equips you with every essential tool and tech advantage you need to win more buy boxes, stand out from competitors and supercharge sales.

Optimize Fulfillment

Our integrations and advanced automation keep you connected to a full range of fulfillment options for faster, more affordable deliveries.

ChannelAdvisor makes it easy to compete and manage all of your e-commerce activities from one central platform. We help brands and retailers integrate, manage, optimize and analyze customer and product data across hundreds of online channels around the world.

In other words, we help the marketing, selling and fulfilling efforts of brands and retailers by keeping the empowered consumer at the center of it all.

https://www.channeladvisor.com/about/news-events/press-releases/channeladvisor-named-1-marketplace-management-provider-to-the-internet-retailer-top-1000-for-seventh-year-in-a-row/

https://www.channeladvisor.com/about/news-events/press-releases/channeladvisor-named-1-marketplace-management-provider-to-the-internet-retailer-top-1000-for-seventh-year-in-a-row/

THIS REPORT IS BROUGHT TO YOU BY–

OUR MEDIA SPONSOR–

ChannelAdvisor has been on the front lines of e-commerce since 2001, helping retailers and brands connect with customers, optimize operations and grow sales channels. We’ve grown from a small company in a young industry to an industry leader at the forefront of a global revolution — with thousands of clients and billions of dollars in transactional revenue flowing through our platform every year. For more information, visit channeladvisor.com

Adweek is the leading source of news and insight serving the brand marketing ecosystem. First published in 1979, Adweek’s award-winning coverage reaches an engaged audience of more than 6 million professionals across platforms including print, digital, events, podcasts, newsletters, social media and mobile apps. As a touchstone of the advertising and marketing community, Adweek is an unparalleled resource for leaders across multiple industries who rely on its content to help them do their job better.

Adweek is part of the Beringer Capital portfolio that also includes BrandShop, a leading full-service partner that works with major consumer brands to employ digital commerce to increase sales, gain valuable consumer insight and create the type of end-to-end experiences that build loyalty and keep brands ahead of the competition. Learn more at adweek.com and brandshop.com

http://channeladvisor.com

http://www.adweek.com

http://www.brandshop.com

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FitForCommerce is a leading boutique consultancy that helps hundreds of online and multichannel brands and retailers make informed digital, ecommerce and omnichannel retail investment decisions. Leveraging years of experience, state-of-the-art tools, strategic diligence and tactical planning, FitForCommerce helps brands and retailers define strategies for growth, improve the customer experience, plan and hire the right organization, and find "best fit" technology solutions. | www.fitforcommerce.com

Foundation Merchandising Planning/Sourcing Content User Experience

MarketingAcquisition

MarketingRetention

SellingMarketplacesOrder Management

Analytics/ReportingFulfillmentCustomer ServiceIn-StorePayments

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