The technological advancement we have seen in recent years has forever changed the way we shop and how retailers do business. Nowadays, consumers can truly shop anytime and anywhere.
As a result, retailers have become more agile and flexible, and an increasing number of brands opt for an omnichannel strategy. While they still want customers to go to brick-and-mortar shops or their own online stores, brands have understood that if items are not present where customers are, the opportunity to win business decreases substantially.
Savvy retailers who have embraced the ‘sell everywhere’ strategy are gaining a significant competitive edge. An increasing number of brands are now gearing up their logistics and expanding their product offering on marketplaces as well.
Considering that Amazon has over 294 million active accounts, eBay has over 165 million global users and Alibaba manages over 434 million buyers, it’s obvious why brands want to tap into this considerable growth potential. Furthermore, a recent survey from eBay revealed that 88% of UK consumers expected to find their favourite brands through online marketplaces.
Of course, there are many brands that are still hesitating with marketplaces. There are a few key reasons holding them back.
Often, they associate marketplaces with discount retailing or lack of pricing control. It’s true that many shoppers go on marketplaces looking for a good price and many brands have used these channels to sell outlet items, but there are many successful luxury brands on marketplaces without special discounts.
Managing marketplaces can be resource intensive. Indeed, before expanding on marketplaces, brands need to invest some time and resources in adjusting their infrastructure and logistics to cater to an omnichannel audience. However, nowadays, the underpinning technology that powers e-commerce is mature, scalable and cost effective, and the effort and resources required by marketplaces are not as large as they seem on paper.
It’s difficult to manage stock and inventory across multiple retail touchpoints. With the right e-commerce solution, brands can automate all these processes and focus most of their effort on strategic growth.
Marketplaces can affect brand integrity. Many brands are unaware that there are suppliers on marketplaces already selling their products and they have no control over messaging or brand image. By creating their own stores on marketplaces, brands are actually protecting their image, ensuring that loyal customers receive the same high-quality shopping experience as they would offer in their own stores – physical or online.
So what should brands do to enhance their sales on marketplaces and maximise profits?
Think strategically and start by assessing the available marketplaces and decide which ones suit your image and growth strategy best. Many brands think that all they need to do is set up an account on the marketplace to instantly see the desired returns. In reality, if you are to maximise profits on marketplaces you need to consider a clear trading strategy that includes various approaches to increase visibility.
There are many specialists that can provide such knowledge and help you get it right from the start. Remember, you don’t need to do everything yourself just because you have extensive experience in retailing. Marketplaces are a different environment and if you don’t comply with their required service standards, you might have your account revoked.
Assess your internal infrastructure and logistics capabilities and plan how to adapt them in order to process an increased volume of sales and make deliveries in the shortest period of time.
Look for an e-commerce solution that connects your marketplaces and channels to the platforms and systems you already use. An efficient e-commerce solution manages and syncs the data between your systems regarding stock, orders and customer activity across all channels. Armed with automated technology that optimises labour intensive processes, you can focus on growth and how to create engaging, meaningful campaigns for your customers in order to convert them into loyal brand ambassadors.
Decide what markets you want to expand to and what the local specificities are. One of the greatest benefits of marketplaces is an easy access to global customers. Through marketplaces, brands can expand internationally with significantly lower risks and investments. Large marketplaces like eBay and Amazon have extensive knowledge about the countries they’re active in and can also provide a trustworthy network of local providers to assist you in supporting your new customer base.
Test new products. Marketplaces are good outlets for testing new products before launching expensive production lines. By analysing the transactions you’re doing on marketplaces and customers’ direct feedback, you gain precious insight into shoppers’ preferences and what products are more successful than others.
Get ahead of the competition
A study published by eBay shows that two-thirds of consumers now begin their shopping journey with an online marketplace. As marketplaces increase their slice of the very profitable e-commerce industry, brands will have to adapt as well. Those who want to stay ahead of the competition will start leveraging these growing channels as soon as possible.
And even if there is no bulletproof recipe for growing on marketplaces, the above tips should guide you on your journey and ensure a healthy growth of your revenues and brand reputation.