The past two years have upended the traditions and fundamental beliefs of retail. Changing social behaviors and business models have led to the rise of direct-to-consumer (D2C) platforms, social commerce, and consumer-to-consumer (C2C) resale/savings marketplaces, but the biggest change influential may have been the rapid growth of online marketplaces.
Research from my company’s recent study showed that online marketplaces grew twice as fast as traditional e-commerce for the second year in a row. In 2021, e-commerce sales growth reached 12%, while marketplaces saw same-site growth of 25%. More importantly, the number of companies that started selling on marketplaces increased by 46% between 2020 and 2021, indicating rapid growth in the years to come. Additional research from OC&C Strategy Consultants found that online marketplaces are expected to grow 15% annually and are on track to match direct e-commerce spending by 2025.
As companies embrace the market model, questions about implementation remain. What can businesses do to ensure success in their enterprise marketplace? Before large retailers begin scaling their business with marketplaces, they need to commit to an approach that sets them up for success across the organization.
This article is the second in a three-part series looking at best practices for businesses looking to deploy their own marketplaces. In this article, I’ll cover operations, while the third article in the series will look at change management.
The transition to the market model can seem like an identity crisis for some brands. What does it mean when a brand no longer just sells its own products? How do you maintain their identity while supporting a new network of third-party sellers? When an organization integrates a market into its strategies, these three approaches can help ensure success while preserving the essence and values of a brand:
1. Embrace curation at scale.
The term “conservation” has taken on a new meaning in commerce, with high-end companies using it to indicate manual product selection and a minimal, exclusive assortment. The simplest definition of curation has been lost: selecting and caring for objects presented as part of a collection. Successful preservation does not require a significantly reduced assortment of products. Consider the world’s largest art museum, the Louvre: its eight curatorial departments ensure that its vast collection has a point of view, highlighting the strengths of each room while providing the best possible experience for all. visitors.
Offering a wide range of products at competitive prices is key to meeting customer expectations, but retailers must do so without compromising brand DNA. Scale and retention must go hand in hand in the most successful enterprise markets. This process begins with the selection of marketplace vendors, choosing partners that match the company’s brand and service offering. Internal teams must be empowered to identify high-quality sellers through recruiting efforts and aggregator partners, resulting in a strong base of qualified, pre-approved sellers.
Marketplace technology can play a vital role in curation by automatically monitoring and managing seller performance and offerings in real time. With the proper safeguards around seller performance and product ratings and reviews, retailers can ensure their growing market is building customer loyalty, trust and confidence.
2. Include the market across all channels.
Marketplaces thrive when they’re seamlessly integrated into a company’s existing channels, not siled in a dedicated marketplaces section. Buyers recognize the marketplace as an extension of first-party offerings, which frees organizations from developing a new digital channel strategy so they can instead leverage the processes that are already working for their business.
A thriving marketplace should also be integrated into the retailer’s in-store strategy to maximize benefits for online and physical performance. In-store marketplace product pickups, returns, and ordering channels can help drive in-store traffic while reinforcing the marketplace’s role as an extension of existing assortment.
The omnichannel approach can also help organizations sell to professional buyers. With the right tools and training, field sales reps and call center employees will be able to market products alongside an organization’s core catalog, increasing overall sales and satisfaction. client.
3. Market the market, not just the company.
Introducing a business marketplace allows retailers to increase their revenue in two ways: first, they can increase sales to existing customers by offering more assortment; second, they can use expanded market offerings to attract new customers. A brand’s marketing and customer acquisition strategies should reflect this opportunity, emphasizing the market itself in addition to the brand as a whole, before, during and after market launch.
• Before launch: Develop a comprehensive marketing plan with strategies to introduce the market and integrate market offerings into existing channels. Consider how the market will be presented in email marketing, paid advertising, social media, content and search engine optimization.
• During launch: Execute a communication campaign that reaches out to customers, potential vendors, analysts and the press. Retailers should dedicate space on their e-commerce site to educate shoppers about the market and its benefits.
• After launch: Marketplace products should have equal weight in the brand’s customer acquisition strategy. Incorporate these products into regular promotions and digital marketing campaigns, and inspire sales teams to include the marketplace in their customer engagement and sales strategies.
Exploiting a market requires a full investment of all aspects of the business. Siled pilot projects and limited deployments without full company support are doomed to failure, limiting market potential before it can thrive. By committing to a well-designed go-to-market strategy, businesses can maintain agility and drive growth in a rapidly changing e-commerce landscape.