By Dominic Portman, below, founder of marketplace seller, Boulevard
Over the past 30 years, we have seen how the Internet has forever changed the way we shop. Online spending has increased year on year since 2011, while the pandemic undoubtedly accelerated this trend. According to the latest statistics, a staggering £250 billion was spent online in the UK in 2021 alone.
In the late 90s and early 2000s, it was the brands that were able to recognise and capitalise on the growing trend of online shopping who carved out a space for themselves early on. This gave them an immense competitive edge at a time when shoppers were moving away from the high street and increasingly into online spaces. Now, we are seeing a similar trend happening with online marketplaces, providing brands with a chance to capitalise on this opportunity and grow their business.
The shift to marketplaces
From the dawn of Internet shopping, we have seen a gradual shift in business models, from single-vendor online stores to multivendor marketplaces that provide nearly any product across multiple product categories. eCommerce giants such as eBay or Amazon are some of the most well-known, and are only set to accelerate their reach even further.
Marketplaces currently account for 40% of the total spend online, representing nearly $1 trillion. Forecasts predict growth in this space of 15% over the next year, which will continue to drive one of the most fundamental changes in consumer spending habits since that initial shift to online shopping. Clearly, if brands want to remain competitive, they must move to marketplaces.
Advantages of marketplace selling
Marketplaces do not only benefit consumers, they also come with a host of benefits for brands too. One of biggest advantages being that by moving to an online marketplace such as Amazon, you are naturally broadening your potential customer base, loosening the geographical limitations of a brick-and-mortar store, or positioning yourself in front of a much wider audience than would be possible from your own online store.
For sellers, a one-stop destination that attracts huge numbers of customers is key, which leads to the next benefit of marketplace selling: visibility. Growing your brand and business requires building brand awareness. Not only do platforms like Amazon allow you to tap into that huge customer base, but they also allow for better marketing, all with the result of making your products and brand more visible to more people.
Building up your brand awareness on a large marketplace should be a key component of any omnichannel strategy, and with the data-driven insights that such platforms provide, you can better target and cater to your customer base.
Making the most of marketplaces
Moving to marketplace selling, and ensuring you have a strong presence on large marketplace platforms means being able to meet your customers where they are, and where they go for product and brand discovery.
Building this awareness is important to maintaining a strong brand, and requires companies to be strategic about their approach to their marketplace presence if they want to get the most out of it.
Optimising your offering to your target customers is critical. Developing and improving product listings is something that is all-too often overlooked, but is key to attracting a large segment of your target audience and driving both clicks and purchases. Likewise, getting a handle on advertising and marketing your product is equally important, as marketplaces, for all the benefits they offer, are also highly competitive environments. This means keeping an eye on your competition, and giving your brand every possible edge over them.
We are already seeing how marketplaces are rapidly replacing multi-brand retailers, offering a greater degree of convenience and choice to increasingly discerning customers. Even more importantly, they also facilitate those all-important matches between buyers and sellers.
Brands that adopt this streamlined approach to online selling are faced with so many opportunities for growth, cost-savings, and the ability to expand into new markets with ease.