E-commerce has emerged as one of the biggest boons of all time now. Gone are the days when apprehensions about “everything internet” gave cold feet to people. Today, people or consumers are opening up to it. They are exploring this space. And consumers are now moving to marketplaces. When we say this, we have already observed that marketplaces make up for 50% of their online shopping!
The penetration of marketplaces is such that novel methods by e-commerce stores to leverage its use are rising. In this blog, what we attempt to deliver is: The understanding of this shift to marketplaces and how the retailers can shape their journey onward.
Before we proceed any further, here’s a glance at all that’s covered in the blog.
- Defining a marketplace
- Why marketplaces?
- Factors causing marketplace boom
- Reasons to choose marketplaces
- How to ace the marketplace space?
- Considerations for strategy building
- Customer experience
Defining a marketplace
A widely known marketplace is a commonplace that let’s third-party users sell their range of products to a wide range of buyers. This multi-seller, physical world-inspired “marketplace” eases the buying for consumers by providing everything in the virtual space.
A marketplace is now a necessary place for retailers and buyers. Thanks to the pandemic, growth has been onwards and upwards. If we talk of the U.S consumer base, then the shopping traffic has surged from 42% in 2019 to 57% in 2021.
Not only have the shoppers turned into “power shoppers,” but retailers have also tightened their grips. The thing with virtual shopping spaces is that consumer behavior is constantly changing. But the major magnet that keeps pulling everyone-alike is the factor of “convenience.” Marketplaces cater to a very large audience today, and everyone is jumping into the space for this.
Now coming to the next segment, we have
Factors causing marketplace boom
While convenience is a driving factor, many other reasons also play a central role in causing the marketplace boom. To list out a few, the considerations which consumers are eyeing today include:
A seamless experience,
and fast delivery
All these count a lot for the idea of why consumers are moving to marketplaces. Apart from these,
Competitive quality and price-
People get offers and deals that are amiss with individual stores and brands. With marketplaces, they get what they want. Where pricing and quality serves advantageous to them. E-commerce services are now getting in line to aid sellers in integrating their stores into these marketplaces. Thus, bringing the best of price and quality to customers with ease.
Helping in locating their trusted brands-
Marketplaces lead customers to the brands they favor and ensure secure shopping experiences. For example, if a marketplace assures a product or brand, the consumer trust deepens in them. After one plunge and successful experience, consumers dive more into the brand. While also providing them with their experienced trusted brand range. Thus, creating trusted brands and partnerships for marketplaces.
Seamless shopping process-
Millennials account for 79% of marketplace shopping today. Therefore ensuring an easy and hassle-free purchase experience is a must for the tech-advanced. Life after internet expansion has become too worked up. People now look for easiness in whatever they can. In addition to this, marketplaces can win over their customers by providing multiple but secure payment options. They can help them by saving their purchase data to ensure they don’t have to repeat it the next time.
These things might look simple but have the strongest impact on a buyer’s decision-making ability. The marketplaces that are providing these are therefore winning and booming.
By the way, did you know that Walmart saw a doubled number of sellers since 2020? Yes, that has happened. And as far as predictions go, B2C marketplace sales may reach 3.5 trillion dollars by 2024!
Omnichannel strategic plan-
Since the pandemic or before it, marketplaces have been catching up on this strategic fold. With added convenience and a plethora of options available, people hoarded the space. During lockdowns, this marketplace browsing saw a jump. Thus, becoming an audience favorite for product research regarding purchases.
Reasons to choose marketplaces
So far, we have seen the factors that led to the boom. Moving on, we will see the reasons for choosing them by retailers.
Growth is phenomenal in retail-
Since the world desires everything at its fingertips, having marketplaces now guarantees a good growth rate for sellers and retailers.
SEO relevant marketplaces-
With apt usage of tags and descriptions. Proper SEO-oriented strategies being in place, marketplaces help in better propagation and reach among the audience.
Helps in free product research-
Looking for your desired product category or type is inexpensive over marketplaces until you make a purchase. Therefore, people relish these spaces more for doing in-depth research that doesn’t cost them extra. Because as per Forrester Research, around 95% of consumers agreed to have used at least one marketplace. Now figure out yourself the magnitude of impact.
How to ace the marketplace space?
Tips for brands
So far, we have seen why consumers are moving to marketplaces. In the following section, we will look at aspects that can be worked to improve that further for them.
The tips for brands include:
Work on the native turf before going international-
This is important because not all international forums will have the same demands. Therefore as a seller, it is critical to begin the groundwork from local zones. Once the gripping, management, and supply are maintained, go targeting the bigger markets, i.e., only if you wish.
Be quick and responsive with data provision-
It is necessary that you provide all your product information to marketplaces. When you do that, make sure it is consistent everywhere, and you know how and when to respond to the demands and stock.
Choose marketplaces on the basis of the sector-
When you do this, you ensure reaching the right target audience. For example, if you are a through and through cosmetic specialist, try rooting for marketplaces known to people for this. It will help your brand name.
Research marketplaces for market conditions-
You cannot jump into any marketplace without knowing the type of audience it holds. Along with this, learn about the conditions of the market that you will be exposed to.
Considerations for strategy building
- You need to ask certain questions before formulating the marketplace strategy.
Is it appropriate for your brand?
What is the growth rate of the marketplace?
Who is the consumer, and are they coinciding with our target audience?
What are the requirements to succeed in the marketplace?
These would then help in designing a suitable ecosystem for working,
- Following this, decide on the operating model or how you would like to work with the marketplace. So that both of you reap the benefits of association.
- Define a pricing strategy for the marketplace. This is important to avoid pricing conflict/ clashes from elsewhere.
40% of buyers are making more online purchases than before after Covid-19. Also, customers bought in heavily from marketplaces for many advantages like;
Consumer experience, therefore, is now heavily laid on;
Therefore, enriching your consumer experience based on these factors will help you ace the space of the marketplace.
With this, we have reached an end to our blog. We hope that the pointers shared here help you understand why consumers are moving to marketplaces. We have attempted to bring in the most consolidated and brief overview for your understanding. Suppose there’s any doubt or question that lies at your end. Then please drop us a comment below or connect here for further queries.
Hoping the blog served you well. For more information, you may check out our venture at cedcommerce.com. Thank you.