Previously, retailers were sceptical of selling on marketplaces, such as Amazon and eBay, but the times are changing, and now these platforms are essential for any brand wanting to become a global business chain.
SMEs were formerly the ones to utilise these platforms, being able to sell their goods at low costs, and have continued to thrive on these sites. They allowed SMEs, who previously would only be able to sell to a small customer group in their local store, to grow and access a global customer-base.
For instance, last year, hundreds of SMEs participated in Amazon’s Black Friday deals across the globe. This scheme resulted in local products, some even handmade, being exported to the likes of Europe, Japan and North America. In fact, today, 50% of items sold on Amazon come from SME sellers.
Big retailers are starting to realise how they can benefit from selling on marketplace platforms Countering SMEs, big retailers were keen to avoid marketplaces, believing that selling on these platforms would result in a loss of their brand image, brand loyalty, insight and data, which are gained through sales on company-owned websites. However, this viewpoint is changing. Big retailers are starting to realise how they can benefit from selling on marketplace platforms. It is now clear to these big retailers that there is a huge market that can be accessed through these platforms and consumers want to find their favourite brands there too.
Marketplaces have made a real effort to raise their game, weeding out counterfeit goods and developing partnerships with the trusted brands that shoppers want to buy from; and this has had a very successful result in attracting and retaining consumers. Today, 55% of US shoppers indicate that they start their retail search on Amazon. This was up 11% on the previous year.
As a result, retailers have slowly but surely started adopting marketplaces, particularly when tackling new markets.
Global marketplaces are particularly essential when big brands are trying to break into new, different markets such as China since this is where most sales and searches take place. For brands of the likes of Waitrose, Sainsbury’s and Burberry, the Alibaba Group’s Tmall or JD.com is now a channel of choice as they target the Chinese shoppers who now have both the aspiration and the means to buy from foreign merchants.
And this is not only true for China. Other brands are also partnering with marketplaces, including Amazon, eBay and, in Europe, Zalando as a bridge to access new shoppers and geographies where sales, via their own websites, weren’t going too well. Gap, for example, started to sell on Zalando as it looked to reach a European audience.
Making Brands Easily Accessible
For consumers purchasing products online, convenience is king. With Amazon launching their virtual dash buttons, every element of the purchasing cycle online is becoming easier and more streamlined. Customers can visit Amazon, press one button and reorder their favourite items. When shopping is this easy, it only seems right for business to become part of the marketplace; having their items accessed across the world 24/7/365.
To grow a global business, retailers must be accessible on a one-stop shop such as Amazon or eBay. If they are not, consumers will not search further, and this will result in a loss of sales. It’s the ease of access to these products that is attracting consumers to begin their searches on marketplaces.
It’s time for retailers to make the leap and join these marketplaces. By doing so, it not only provides consumers with easier access to their products but also allows a wider consumer audience than would be exposed to the brand on a company website alone. Retailers may not gain the insight into customer behaviour that they value, but they’ll gain the contact details for shoppers that they can then target and persuade to shop directly on their own websites, and in their stores.
Marketplaces, international strategy and latest ecommerce trends are only some of the themes that will be addressed in this year’s InternetRetailing Expo, taking place on 5th and 6th April at the NEC Birmingham. Find out more here.