Making the most of your marketplace might: All-important strategies for success

Making the most of your marketplace might: All-important strategies for success

The dominance of marketplaces means they can no longer be overlooked, but it’s not as straightforward as treating the channel as a simple add-on to a business strategy.

Marketplaces have devoured ecommerce; the long-term viability of any consumer product business will come down to its ability to reach and interact with marketplace customers. In short, every brand needs a clear and considered marketplace strategy if it is to thrive in this rapidly evolving retail environment.

So where do marketplaces fit in as part of your broader strategy? That depends on your core business objectives.

Of course, you may see the marketplace model as a simple means to acquire new customers, boost sales and increase your brand’s visibility from high-traffic channels. But with over 450 marketplaces to choose from globally, there are so many more exciting possibilities that will have a much deeper effect on the very nature of your business, as well as its long-term success.

Marketplaces are far more than just a sales platform: they’re a tool you can use to revolutionise your company.

Testing new markets

A recent report published by research firm Forrester predicted that cross-border ecommerce would reach $627 billion by 2022, accounting for 20% of total ecommerce. Expanding cross-border is not without challenges, whether that’s because of product localisation, payments, managing delivery expectations or, of course, the cost of driving sales in the first place.

Yet for any business looking to trade cross-border, marketplaces represent the quickest, most efficient and cost-effective way of testing new territories and markets. Indeed, for brands looking to expand overseas, marketplaces mean the cost of acquisition and associated risk has never been lower.

Leveraging Amazon’s network of European fulfilment centres is the clearest example of how a business can quickly penetrate new territories without any of the complexities that would typically face brands looking to expand across national borders.

For example, Amazon’s Pan-European FBA program enables sellers to place their inventory closer to customers in Europe’s dominant markets (UK, France, Germany, Italy and Spain), fulfilling orders at a lower cost and far quicker than most brands could ever achieve using their own logistics. Moreover, Amazon deals with all customer services, localised for the relevant region. Naturally, products are made visible to millions of customers throughout Amazon’s European marketplaces.

Amazon's Fulfilment by Amazon (FBA) network in Europe.

As a result, marketplaces allow businesses to test the demand and viability of products in new markets without the need to invest in a costly ecommerce site, localised currency payments, or even bricks and mortar stores.

When it comes to forming a strategy for international expansion, marketplaces are the most efficient and cost-effective way of gaining valuable market insight to support a more comprehensive regional roll out.

Brand control

Brands are increasingly looking to re-exert control over their products and brand message through marketplaces. In 2017, after years of resistance, world-leading sportswear brand Nike began a pilot program on Amazon. While many believed its primary motivation was to increase sales or market share, this was far from the truth: it wanted to take back control.

At that point in time, Nike was already the number one clothing brand on Amazon; a search for its products returned approximately 73,000 results. The problem for Nike, however, was that it had no relationship with the sellers responsible for these listings, and as such there was no consistency underpinning how the brand was being presented to millions of consumers viewing it on a daily basis.

Amazon works with brands through its Brand Registry function to help them protect their intellectual property, safeguard against counterfeit products, halt unsanctioned third-party sales, and accurately represent brands across the site.

Amazon's brand registry promotion.

It’s not the only one. Indeed, the majority of major marketplaces have rolled out brand protection measures. eBay, for example, operates its Verified Rights Owner programme, which supports brands that want to protect their IP across its platform. These measures have the dual purpose of overcoming brand reluctance to sell via these channels, but also ensuring marketplaces continue to be regarded as trusted shopping destinations for the consumer.

When approaching marketplaces, your brand strategy must focus heavily on controlling who sells your products, as well as how and where they sell them.

Brand promotion

Amazon is now the most popular place to search for a product online: in late 2018, Jumpshot discovered that 54% of all searches for goods online are made on its network of sites. Brands now look to leverage the dominance of marketplaces with sponsored placements aimed at driving brand awareness as much as sales themselves. Indeed, according to eMarketer, Amazon advertising is growing six times faster than Google and Facebook, with a 122% increase in platform revenue in 2018 alone.

Marketplaces have historically been seen as sites that sell products, rather than ones that build brands, but this is simply no longer the case. In a 2019 Feedvisor survey of 500 brands, 59% of respondents claimed that “driving brand awareness” was a major reason for advertising on Amazon.

The top three marketplaces now have a total of nearly one billion users, and brands now have the tools to engage with these customers at every stage of their journey. As such, a clear brand promotion strategy must be closely aligned to wider business objectives in any marketplace plan, especially given how effective marketplaces are at driving connections with both new and existing customers.

Outlet product

While many brands want to run mainline products across marketplaces – effectively mirroring their ecommerce businesses – an increasing number of brands are utilising marketplaces as a channel to sell discounted, off-price products.

Earlier this year, eBay launched its Brand Outlet, which features heavy discounts on goods from renowned brands such as Adidas, Bose, Ray-Ban, Samsung and even Rolex. Meanwhile, other marketplaces operate entirely on a discounted, deal-driven model.

Privalia, as an example, is an online fashion outlet operating across Spain, Italy, Germany, Brazil and Mexico, with more than 15 million users worldwide. Brands including Adidas, Lacoste, Converse and Calvin Klein have found great success here.

Privalia's presence in Spain.

Using marketplaces for liquidation can help brands better manage their stock position, essentially treating sites like eBay as a virtual outlet where they can shift large volumes with markedly better margin than traditional clearance avenues.

Excess inventory and terminal stock is an ongoing struggle for retailers and can be a very costly one. Not only does it take up valuable warehouse space, it often results in challenges around cash flow and supply chain management. Having a clear plan in place for inventory reduction can be invaluable and marketplaces should be considered as part of this wider strategy.

One size doesn’t fit all

These example strategies are by no means the only ways a business can get the most out of marketplaces, and every company using these platforms will combine different elements as they see fit. But as marketplaces expand and evolve, even more possibilities will emerge; this only highlights the importance of acting quickly to set a strategy in place, so new developments can be responded to as and when they arrive.

The success and viability of a marketplace strategy relies on the level of understanding of those working within or alongside the business. Marketplaces are here now, and will only exert more dominance in the future. Without drawing on the experience the right people, you’ll be left behind.

Finding prosperity through marketplaces means having an open-minded and flexible strategy that can be quickly, constantly tested and adapted – much like the marketplaces themselves are refined on a daily basis.

Learn more about the incredible opportunities that marketplaces can provide brands by [downloading our State of Marketplaces Report**](https://www.shiftmagazine.com/reports/the-state-of-marketplaces-report.html).**

Recent Articles

Impulse vs research: Are you offering Black Friday shoppers the real deal, or damaging their trust in you?

Another Black Friday has come to an end, and in those 12 months, customers are wiser than ever to the deals offered. Yet it appears that some retailers are up to old tricks – and a recent study will only shake consumer trust ahead of a critical Christmas sales period.

Brands and marketplaces: The relationship that can't be ignored

After responding to the rise of ecommerce and social media, plus the changing high-street landscape, brands are once again evolving in line with millions of customers, who are overwhelmingly turning to marketplaces for their retail needs.

Oxfam Superstore: Leading the charge to change charity retail

Combining the best of old and new practices, the Oxfam Superstore – based in an out-of-town park just a stone’s throw from the charity’s head office – is meeting the demands of the increasingly conscientious modern consumer, while pioneering a new and excellent concept for its sector.

Impulse vs research: Are you offering Black Friday shoppers the real deal, or damaging their trust in you?

Another Black Friday has come to an end, and in those 12 months, customers are wiser than ever to the deals offered. Yet it appears that some retailers are up to old tricks – and a recent study will only shake consumer trust ahead of a critical Christmas sales period.

Brands and marketplaces: The relationship that can't be ignored

After responding to the rise of ecommerce and social media, plus the changing high-street landscape, brands are once again evolving in line with millions of customers, who are overwhelmingly turning to marketplaces for their retail needs.

Oxfam Superstore: Leading the charge to change charity retail

Combining the best of old and new practices, the Oxfam Superstore – based in an out-of-town park just a stone’s throw from the charity’s head office – is meeting the demands of the increasingly conscientious modern consumer, while pioneering a new and excellent concept for its sector.

The art of the possible: Puma's push for personalisation at New York flagship

With its relative underdog status in the market, Puma is going beyond simply bringing a big presence with its NYC flagship store, using every trick in the book to win new brand advocates through carefully curated, brand-related experiences.

Augmented reality: Finally enriching the customer experience with more than simple gimmicks

With the right ecommerce platform, businesses have a real opportunity to enhance the customer journey with the clever adoption of augmented reality – and now’s the time to test it out.

Could Amazon make packageless returns the new norm?

Amazon's initiative to remove packaging from its returns process may be the perfect way to cut costs, but it's also a great way to respond to consumer demand for less waste – and make one big-box retailer in particular more popular at an incredibly critical time. Will packageless returns become a new retail norm?

In-store optimisation: Treating physical stores as real-life websites

Retailers need to treat stores like websites. Just as developers use technology to evolve the quality of a company's online offering, businesses can use the same approach to gather insights on the high street and deliver a best-in-class brand experience.

M&S Little Shop: Pint-sized prizes that convert on a huge scale

While it’s had its fair share of negative headlines, the Little Shop offered by Marks & Spencer has a keen focus on the bottom line, basic human psychology and the brand itself – and delivers countless benefits at a crucial time.

High street banking is dying. What can retailers learn from Santander’s clever Work Café?

Banks are withdrawing from the high street at a drastic rate, driven by ever-lower demand for in-branch services. Will Santander's Work Café make physical banking relevant to a new, technologically empowered generation?

Greggs’ “adapt or die” mantra is the blueprint all businesses must follow

Greggs’ decision to reconsider its high-street presence in favour of motorway services, drive-throughs and industrial parks has helped it top £1 billion in sales for the first time. It’s time for every retailer to learn from the company’s success and seriously consider their physical strategy.

The SHIFT On-Site Search Score: How retailers are hiding their products from customers

Combining a survey of 1,500 British customers with a bespoke test which ranks 40 British retailers across a variety of metrics, the SHIFT On-Site Search Score assesses the difference between consumer expectations of retailers’ on-site search and the reality of their capabilities.

The 2019 State of Retail Report

Building on the foundations of our 2018 State of Omnichannel Report, we spoke to 10,000 consumers to understand the demands of the modern British customer.

Fukubukuro: The lucky dip where everyone’s a winner

Sales events like Black Friday are regularly lambasted as wasteful and pointless. Is Fukubukuro the craze that can fulfil retailers’ needs and silence their critics in one fell swoop?

Are high-street retailers doing enough to win new online customers?

Omnichannel retailers must beat, and not just compete, with ecommerce pure-plays by prioritising new customer relationships online.

The 2019 Retail Experience Score (RES) 100

In our first-ever RES 100, we measure 100 of the high street’s most established omnichannel retailers across six core areas.

How can you offer an in-store experience if you can’t deliver the basics?

In recent months, there’s been much talk of retailers needing to offer an experience on the high street – but is this really at the top of the British consumer’s shopping list?

If there’s one thing high-street retailers must invest in during 2019, it’s this

To make the biggest impact across all channels in 2019, high-street retailers must drive towards accurate inventory, as both customers and the businesses themselves will stand to gain incredible benefits from it.

Free and fast click and collect: The next industry standard

Fast and free click and collect isn’t just nice to have – it’s a necessity if you want to remain competitive and keep people coming to your store.

Five years on, Black Friday still thrives in the UK – whether retailers like it or not

Black Friday is always forecast to be bigger and better than ever, and in the face of heightened online spending, high-street retailers must embrace omnichannel if they are to keep up with internet-only rivals.

The very real problem facing British retailers that nobody is talking about

Everyone hates slow websites, but retailers should hate them more than anyone else - after all, billions of pounds in revenue is being lost to poor web performance.