Last updated: Online marketplace benefits: The multiplier effect

Online marketplace benefits: The multiplier effect

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Customer expectations for commerce are constantly changing. Technologies and methods of digital engagement that once seemed cutting edge have become commonplace across industries. The result? Today’s next big thing is tomorrow’s no big deal.

In this environment, your brand’s commerce strategies, channels and capabilities can’t just move at the speed of business. They need to move at the speed of want.

So what are brands doing to become more indispensable for customers —and more agile and resilient as businesses? Today, online marketplaces are a top digital commerce trend driving business success.

The benefits of online marketplaces are tremendous, helping brands activate a rapid path to growth without increasing inventory.

Wow! The digital marketplace boom

Did you know? More than half of all online sales in North America last year were conducted on marketplaces, according to Digital 360 research.

Even as restrictions on physical retail locations eased, sales via online marketplaces continued to grow at twice the rate of overall e-commerce, Mirakl research found.

Setting up a marketplace need not be complex, and when done right it sets all kinds of benefits in motion. It creates a multiplier effect that helps brands stay agile to the customer’s evolving needs and wants. Products from third-party sellers provide more choice (assortment and price points) quickly, driving higher traffic and sales, which attracts more sellers and expands buyer choices.

Companies of every size and industry vertical are launching online or digital marketplaces—where they sell their own inventory alongside a continually curated selection of complementary goods from third-party sellers.

The result—as customers discover more from you and turn to you more often—is more sales and higher loyalty.

4 online marketplace benefits

The marketplace trend accelerated during the pandemic, and it shows no sign of tailing off. And no wonder.

There are countless benefits a brand can gain with a marketplace:

  1. Rapidly expand your range of offerings without taking on any inventory risk. With a marketplace platform in place, a B2B manufacturer that produces and sells chemical sealants, for example, could quickly and efficiently introduce third-party products in a related category such as dyes and pigments.
  2. Experiment with new categories without allocating warehouse space or hiring new buyers for the category. A swimwear brand, for example, could offset its seasonal ebb and flow by introducing new categories in beauty or footwear. This is an easy, cost-effective way to see what resonates with current customers—and attracts new ones.
  3. Unlock customer insights by capturing data traditionally held by distributors. Marketplaces can give manufacturers a direct customer connection—without getting entangled in last-mile logistics because orders are still routed through existing distribution partners.
  4. Manage seller relationships with digital ease. Onboarded third-party sellers simply log on to your portal to upload products, fulfill incoming orders and respond to customer questions—which means you can focus on curating and displaying everything so that it’s true to your brand.

Walk, don’t run 

Given all the benefits of online marketplaces and the ability to implement one through modern, cloud-native solutions, you may be inspired to rush toward the future. Resist that impulse. The business implications of adopting a marketplace model are complex—and worthy of thoughtful consideration.

A marketplace requires a new operating model—one with different rules than traditional commerce. Areas of your organization like tax, legal and finance that are accustomed to old ways of interacting with commerce may need to alter their operations.

Processes within existing commerce-focused areas like digital marketing, editorial, customer care and omnichannel operations will need to be adapted for an agile marketplace too.

Beyond internal processes, consider the logistics needed to deliver a cohesive experience for customers who return or need support on third-party goods. For example, if you have physical stores, will customers who buy on your website or app be able to return purchases to a local store? If so, you’ll need a well-oiled plan for how to get those items back to sellers.

Get your marketplace model right, and the “more” effect will drive sustainable growth that’ll be hard to miss. You gain the agility to give customers more choices—and more choices will keep them coming back for more.

The future of commerce is:
Agile.
Lean.
Connected.
Adaptive.
Are you ready for it?
Get going HERE.

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