Customer expectations continue to evolve at a rapid pace.
Not so long ago, if you wanted a product you would have to make the effort to visit a physical store. It seems only a few short years ago that the Internet allowed us to shop from the comfort of our home, giving rise to a generation of ‘everything stores’ such as Amazon, which bring almost limitless choices all to one website. But the revolution is only just beginning. What lies ahead is the Effortless Economy, offering even greater convenience. In the future, commerce will increasingly come to you, wherever you are.
A retail opportunity can now occur in any number of settings. A moment of entertainment or digital distraction can instantly become a moment of brand discovery. As a result, we’re seeing platforms such as Facebook, Instagram, Google and YouTube all becoming commerce enabled. Whatever stage of the shopper journey a particular touchpoint is, the customer expects the experience to be frictionless and effortless – from discovery to purchase to delivery. The whole experience is on the customer’s terms, be it the device they wish to use or the time and place they want to receive their purchase.
This new, Effortless Economy presents brands and retailers with a multitude of challenges but at the heart of this competitive landscape is the age-old importance of understanding your customer. Knowing where your customer spends their time, what their expectations are and connecting your commerce channels to deliver to those expectations are crucial in developing a competitive advantage. Fortunately, there are tools and systems to help retailers learn about their customers in more granular detail than ever before.
Among the various channels of physical stores, websites, mobile apps and social commerce, one of the most important fastest growing areas is online marketplaces. According to the latest Linnworks consumer research, 90% of shoppers start their product search on marketplaces. The channel has grown to represent 62% of global online retail sales and that share is increasing. Marketplace growth was 80% year-on-year in Q4 2020, double the rate of general ecommerce growth. Very few brands and retailers can ignore access to such a pool of existing and potential customers.
A new breed of marketplaces.
A wide range of specialist and challenger marketplaces are emerging to take on giants such as Amazon. Onbuy launched 4 years ago and now has 8 million customers and over 35 million products for sale with plans to go global by the end of 2023. They expect this growth to continue ahead of wider market trends. One of Onbuy’s attributes is that it doesn’t compete with its sellers by offering products itself, as some of the leading global marketplaces do. Instead it focuses on partnering with those sellers and helping them grow their businesses. This can be particularly reassuring to retailers entering marketplaces for the first time.
A huge number of brands have already started to sell on marketplaces, but for many traditional retailers this is a step into a whole new channel. Some fear that selling via marketplaces may cannibalize their sales elsewhere. However, that is rarely the case. In fact, marketplaces often offer access to a new source of consistent and loyal shoppers, enabling retailers to reach new types of customers and grow their audience. Onbuy is not unique in offering on-boarding agents and seller teams who can help new entrants quickly find what works best for them.
Keys to successful marketplace selling.
It pays to know some simple yet important steps to effective selling on marketplaces. There are niche platforms that may fit closely to some of a seller’s existing audience. Broader marketplaces like Onbuy, which offer 6,600 categories of product, highlight that sellers may discover new groups of customers in an audience that value the convenience of shopping for a range of products in one place. A wider range of interactions can also give a greater degree of insight into the customer too, helping the seller understand their customers’ needs and wants in much greater detail.
Marketplaces operate a bit like a search engine and so sellers need to ensure their products are discoverable. Price is important, of course, but marketplaces like Onbuy also highlight aspects like delivery time, positive reviews, and warranty and are tailoring their algorithms accordingly. Product videos, rich content and better data available to shoppers are all likely to lead to a successful transaction more than an approach based on price alone. Focusing on the entire customer experience is a primary reason that this new generation of marketplaces are growing so robustly and seeing such a dramatic rise in sales volume.
Scaling your operations for new selling channels.
For the retailer too, the transaction is just the tip of the iceberg. Adding marketplace sales alone does not ensure a seller is able to scale their business profitably for the long term and so take maximum advantage of all opportunities. Companies need to also consider the operational challenges. Linnworks helps clients address issues like inventory management, order tracking and post sales service needed to meet ever-rising customer expectations. This operational backbone is necessary to deliver on the promise of the Effortless Economy.
We still may make the occasional journey to the physical store, but the centre of gravity continues to shift from traditional brick-and-mortar retail to a multi-channel approach with marketplaces a key part of the mix. Each retailer will have their own blended approach based on their products, customers, and channel but, with their cost base aligned to sustainable growth, the Effortless Economy offers huge potential. With the help of technology systems such as Linnworks, and with burgeoning marketplaces like Onbuy offering access to existing and new audiences, retailers need to be agile, embrace the chance to learn what works best for them, and seize the opportunity to take their business to the next level.