Online Retailer Recap: How Marketplaces Have changed the Face of Retail and How to Leverage this Opportunity
We recently attended Online Retailer in Sydney. The entire ChannelAdvisor team loved catching up with new and old clients at our stand and catching up with others in the industry. Congratulations to the entire Online Retailer team for running a flawless event and an especially memorable one for the 10 year anniversary!
Looking back over ten years of this event, it’s interesting to see how different elements of the industry have dominated at different stages. Once it was all about fulfilment, then mobile optimisation. This year, marketplaces were central to the event and it’s no secret why!
ChannelAdvisor presented: How Marketplaces Have Changed the Face of Retail and How to Leverage this Opportunity. It was great to see so many familiar faces while Simon Clarkson, Managing Director at ChannelAdvisor, presented. For those who weren’t able to attend, here is a recap:
In 2016, the total value of goods transacted on the 18 largest global marketplaces (including Alibaba, Amazon, Rakuten and Jumia) grew 21.5% to $1.09 trillion and there has been 50% growth of these dominant marketplaces since 2014. The total value of goods transacted on these 18 marketplaces globally accounted for 44% of the $2.44 trillion spent online in 2016. We can see where this growth is heading and why Australians need to prepare accordingly.
- Know WHY
With so much talk about strategy and results, retailers are forgetting what is at the core of marketplaces. That is, why does a consumer choose to shop there? For the customer, purchasing from a marketplace comes with all sorts of consumer protections from hassle free returns to safe payment methods. It’s essentially a department store-style purchasing behaviour offering the seller endless aisle space. This means brands and retailers have the option to be visible to a completely new demographic. When you tap into the why your strategy becomes more clear. If it’s all about convenience at its core, this should play into everything from fulfilment methods to search terms, optimisation, advertising and more.
- Set yourself up for success
- Understand what is expected of you as a seller on each marketplace. Adhering to seller guidelines will prevent you from being penalised. Know that there are specific rules around email communication, seller accounts and managing returns and that these may vary from marketplace to marketplace.
- Build your ratings and reviews. Ratings and reviews exist to weed out poor performing sellers and the marketplace could investigate you if you’re getting negative results. Furthermore, a customer who is unfamiliar with you can automatically feel a sense of trust if you have great ratings and reviews. Ratings and reviews have a huge role to play and are vital for leveraging your brand.
- Multi-marketplace approach:
Simply listing on one marketplace or listing across the board isn’t how brands and retailers will succeed. Furthermore, what will work for one retailer in a specific industry won’t be the correct approach for another. AND it’s not just knowing what to list where, it’s also knowing when to list. Part of your multi-marketplace strategy is to ensure that you’re utilising the data available to know who your target market is on each platform and ensure you’re strategising accordingly.
Our clients find great success listing on some marketplaces at the start of the season at full price and then listing on other marketplaces to clear out excess stock at a discount. This has completely shifted the model that had been in place for years in relation to end of life cycles and seasonality in retail.
Conversely, marketplaces are also a way for retailers to test the market or even new products at the beginning of a season.
This is just a snapshot of the marketplace landscape and of Simon Clarkson’s presentation which covered the specifics of category data and listings structure across marketplaces. For more information about this and how you can get your edge, contact us today!
I hope you all got as much out of the Online Retailer and the diverse presentations as we did and we are already looking forward to next year!