The rise of the eCommerce marketplace has been steadily building over the past few years; Amazon, Etsy, and Asos are brands recognised by most of us. With the rise of new marketplaces, consumers have adapted their shopping behaviour to favour these sites purely for the convenience of both browsing and purchasing in one place. Today the marketplace economy is so established that they are thought to be a key component of any eCommerce strategy and set to shape the future of eCommerce for years to come.
What Is The Significance Of Marketplaces
An online marketplace essentially connects buyers and sellers in one place and advertises an array of products from multiple third parties. They enable the consumer to see a large number of products that are typically lower in price, and they are therefore a great resource for securing the best price. Research by Digital Commerce concluded that a phenomenal 93% of online consumers have shopped on an online marketplace. Amazon is firmly fixed at the top of the leaderboard, for now, but there is a movement away from this retail giant as brands start to recognise the importance of independent marketplaces that protect their margins and safeguard their online presence, price value, and brand ethos.
The Rise And Fall Of Amazon
A staggering 66% of consumers use Amazon as their first port of call when searching for new products. They have such a hold on the market that 50% of all e-commerce sales are generated through this online marketplace. The advantage Amazon has, is that consumers perceive them as the fastest and cheapest option, and it’s trusted by millions worldwide. But for brands it can be a raw deal; it’s impossible to establish a personalised connection with customers as Amazon owns the relationship. A brand is never allowed to redirect the consumer to their site, losing the opportunity to build customer loyalty. To make matters worse, once a customer has made a purchase Amazon will advertise competitors’ products to reinforce that they offer the best range and value but at the brand’s expense, which now has even less chance of reselling to the customer.
Due to this lack of autonomy, some large brands have been leading the way by leaving Amazon. Birkenstock left Amazon in 2016 due to counterfeit items and unauthorised selling of their products, Nike followed in 2019 after deciding to build stronger relationships with their customers, and IKEA followed suit most recently in 2020. Research by Modern Retail revealed that 41% of brands and retailers say Amazon isn’t a trustworthy partner. So what is the alternative?
The good news is that the global eCommerce market is projected to continue to grow; it is predicted that Covid-19 has accelerated the digitalisation of marketplaces by as much as 7 years. Although Amazon doesn’t seem to be the most business savvy choice, 47% of shoppers still prefer to make repeat purchases on marketplace platforms, so the future for online marketplaces is bright!
In the past, department stores were favoured as multi-brand retailers. With a significant shift to shopping online we are beginning to see more online marketplaces setting up shop to meet demand. It’s clear that Amazon, eBay and other large retailers will maintain power as marketplaces for products in numerous categories but a whole new niche of marketplaces has opened up. Product specific marketplaces.
If you want to sell your products and gain visibility, both locally and globally, then a product specific marketplace can offer this. Good examples are Etsy, a global directory of unique and creative goods, and Not On The High Street, which is home to the UK’s best small creative businesses. 2021 is set to be the year of the marketplace with new platforms launches bringing greater opportunity to reach a wider customer base and get a foothold in new markets.
Integrate with roseta.io
Integrating with roseta.io can open up your business’s potential by increasing sales and enabling you to keep an eye on your order and stock movement at all times. We currently offer integrations to Etsy and NOTHS and have a number of marketplaces that we will be launching in 2021. Get in touch with us to find out how we can help you scale up your business and reach more customers.