By Alan Chester, VP of Ecommerce at Luzern
In this age of “Commerce everywhere”, brands need to be available to consumers on whichever channel they prefer to shop, be that on Amazon, a branded webstore, and/or on the many other big or niche online marketplaces emerging across the world.
According to a report from Forrester, 77% of brand decision-makers say that online marketplaces are growing faster than their traditional wholesale business. As brands were looking to replace sales due to closed stores during the pandemic, marketplaces represented an attractive route to online shoppers. That trend is set to continue, even as the brick and mortar retail world reopens, brands are continuing to optimise their digital eCommerce channels.
Adapting to this new competitive multi-channel landscape is one of, if not, the most pressing challenge facing eCommerce brands today, but it is not a straightforward expansion to make the leap from Amazon to the growing choice of specialist and regional online marketplaces. Going multi-marketplace requires agility, strong partnerships, and a clear strategy to turn opportunities into sustainable, profitable long-term growth.
So why would brands look beyond Amazon? it is undeniably the biggest, and wouldn’t it be easier just to stick with the market leader? Pre-pandemic, there may have been an argument for that, but Covid-19 has had a major impact on consumer behaviours. According to McKinsey, during the peak three months of Covid-19, the US e-commerce market saw ten years’ worth of growth. While Amazon is still the dominant force, several other key players in the marketplace saw explosive growth and customer acquisition on the back of the pandemic. Headlines such as ‘Walmart maintains growth with online sales up 37%’; ‘eBay reports better that expected results’ and ‘Best Buy’s incredible 2020 online sales’ underlined the phenomenon.
Customer buying behaviours have not only extended beyond Amazon but there is a real Covid-driven desire to support local and specialist marketplaces too, to spread the consumer spend more among smaller businesses rather than the behemoths.
Today, brands need to be where their customers are – these flourishing existing and new marketplaces give brands a unique opportunity to present their products to a massive new source of shoppers, to grow revenue, and to increase profitability. A wider range of marketplaces means a wider opportunity for revenue. Going multi-marketplaces also de-risks the dependency on Amazon, a platform that can be inflexible as brands grow. Even established brands can face challenges such as lost control of pricing, margin pressure, list suppression and the overhead of managing returns.
A multi-marketplace strategy means brands need to seize the initiative – to get in fast when new marketplace opportunities open up in order to get ahead of the competition. Brands must ensure best in class content, customer buying experience and visibility, with complementary targeted marketing campaigns and promotions.
Across multi-marketplaces, brands need to control their online brand presence, their image and their customers’ experience to ensure expectations are met, if not exceeded. It is of critical importance that the product is presented consistently in the most appealing way, with high quality images, comprehensive descriptions, and carefully chosen keywords for search engine optimisation. It’s essential to get the product optimised, to build rankings and listings in order to build new customer bases.
Selling products on multiple marketplaces gives brands a cost-effective – and sometimes free – way of testing and seeing which approach is most effective depending on the marketplace or the region. This also enables brands to learn about the marketplaces that are best placed to support their products and enhance their business. Marketplaces such as OnBuy and Debenhams in the UK, Allegro in Poland and Bol in the Netherlands are putting a great deal of investment into building their profile and their capabilities. Specialist sites like Zalando and ManoMano are expanding beyond their key markets and product offerings, building up a complete fulfilment infrastructure including warehouses and delivery mechanisms to become true competitors to Amazon and take control of the final mile of the customer journey.
It is a terrific time to be a consumer as there is an ever-expanding selection of sites to browse – akin to having a constantly extending high street, but without having to leave home. This means it is a hugely exciting time to be a brand that can be nimble and quick in order to keep pace with this online expansion – to be where the online shoppers are, wherever channel that may be, and to ensure conversion and profitability.
Customer expectations have been heightened by the increased competition online – in terms of price, ease of purchase, ease of return, quality of delivery – all need to be seamless and flawless. Moving into new marketplaces is complex and can be messy if not approached correctly. Brands need a complete go-to-market strategy to advance successfully beyond Amazon and stand out from the crowds.