Get access to essential strategic content, in-depth reports, industry intelligence, and exclusive data.
Get access to essential strategic content, in-depth reports, industry intelligence, and exclusive data.
Get access to essential strategic content, in-depth reports, industry intelligence, and exclusive data.
Get access to essential strategic content, in-depth reports, industry intelligence, and exclusive data.
Forgot your password?
It’s important that retailers understand the online marketplaces that matter, the reasons for selling via marketplaces, and any perceived obstacles. Having strategies and plans in place for the coming year can also help set the right direction for sellers in the game and those considering entering the fray.
The reasons to sell on marketplaces can be classified into five distinct areas where customer acquisition and revenue growth drive marketplace initiatives. From a customer acquisition point-of-view, it’s all about reaching more customers, according to 77% of survey respondents. Ideally, 31% of these retailers also hope to target new audiences at a lower cost. Global reach is also on the minds of 26% who are looking to sell to international audiences.
Close to customer acquisition is revenue. Three in five of those surveyed are looking to grow sales. For 35%, that means extending sales beyond existing partners. Meanwhile, 25% are looking at selling across varied marketplaces, and 24% are hoping for growth beyond Amazon.
Marketplaces also provide branding opportunities. Expanding brand awareness (which 52% cited) tops the list of reasons for selling on marketplaces. Other tangential possibilities include increasing brand prestige due to marketplaces (19%), giving products/brands a greater sense of legitimacy (19%) and securing more reviews (19%).
Along with this brand awareness is the hope that there will be better discovery opportunities for 47% of survey participants. This is also an excellent chance to understand how products sell in a variety of different marketplaces (25%). Lastly, it also serves as a testing ground for products for 20% of those surveyed, as other companies appear to be selling similar items.
Lastly, as marketplaces have evolved, some sellers take advantage of their sophisticated infrastructure, according to 29% of respondents.
Topping the list and seen among 29% of sellers were the increased marketplace fees cutting into profits. Some have even waived shipping fees for consumers (13%), despite such circumstances.
Next in line were the 21% who have changed their product mix. Of course, 17% noted the supply chain had compromised efforts. 19% cited altering marketing strategies, including customer acquisition, and some have simply chosen to direct their marketplace business to their own ecommerce initiatives (17%). Other experiences, from logistics to assortments and visibility, were limited in scope among participants and seen in 10% or less of the surveyed sellers.
Amazon is a mainstay for sellers, outpacing the field at 60% participation. The next group includes a strong penetration for eBay and Walmart marketplaces at 35% and 29%, respectively. Social marketplaces saw strong efforts as well with Facebook (34%) and Instagram (24%). Other social marketplaces came in at 9%. Etsy seemed to be the most formidable specialty marketplace, with others in single digits.
Conversion rates tend to be higher on marketplaces, while remaining key performance indicators (KPIs) are about the same year-over-year. Increases in average order value (AOV) and conversion rates are highest among our survey respondents
The details below reflect the three positions from higher to lower and should be insightful.
It’s important to explore where growth is coming from. Retailers’ own ecommerce sites and Amazon Marketplace see the greatest growth. It’s instructive that 59% of respondents cite their own ecommerce site. Amazon marketplace came in at a respectable 43%. Behind these two were Walmart marketplace and eBay with growth at 24% and 22%, respectively.
Taking a look at start dates or proposed launches on both Amazon and Walmart tells an interesting story. Walmart Marketplace sellers are later to the game with strong current-year interest, while 34% of sellers have been on Amazon for 5+ years.
Retailers expect their marketplace business to see increases in 2022. Projected marketplace business change is as follows:
COVID-19, comfort with the marketplace model, internal focus and acquisition strategies propelled growth in marketplace business. As retailers learn the ropes and understand how to optimize marketplace initiatives, their performance should positively evolve as well.
Growth leads the adjustments, with 38% looking to expand the number of marketplaces. Sellers are also considering online marketplace innovations (29%) while offering more promotions to gain back customers (28%). Just 17% project investments in their marketplaces, but this seems low given other survey findings.
Of course, 22% will refocus on ecommerce given the business results they are seeing. Sellers will be revisiting their reliance on Amazon (13%) and similar numbers (12%) will seek to add Amazon Prime checkout on their own site.
There are also adjustments that are expected in the products/supply chain, as 19% will alter their assortments to keep more products in stock. 18% will revisit supply chain decisions, and 10% are looking to rely less on China.
Logistics are somewhat in play, and for 10%, that will mean changing their fulfillment network. Meanwhile, 8% may alter last-mile delivery partners.
2022 investments will be forthcoming especially for ecommerce websites
Digital marketing tops of the list of technology investments underpinning marketplaces. It is clear from this survey that there are many technologies that will be in play requiring investment that serve as the foundation for online marketplace selling.
Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.
Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.
Copyright © 2022 Digital Commerce 360 | Vertical Web Media LLC
Copyright © 2022 Digital Commerce 360 | Vertical Web Media LLC