E-commerce is growing faster than any other market. And marketplaces are leading this sphere. That’s why having your own marketplace is a trend. But often, companies wishing to create their marketplace do not fully understand what they will have to face when they launch a marketplace. Not everyone is ready for this model, and not everyone needs it. Experts of Scallium – marketplace operational platform share their advice – what you need to know before you launch a marketplace.
First – it is wrong to see a marketplace a-la Amazon
We believe that marketplaces go beyond this e-commerce giant. There are various other business models for marketplaces – marketplace as a mobile app with cashback or marketplace with one type of product, B2B marketplace, etc.
During pandemia, we all witnessed that Amazon wasn’t the most effective model. We would follow the smaller companies rather than giants. Major retailers are going to grow and strengthen. Moreover, it’s hard to survive in this competition. But when it goes about competition, why do we always focus on old ideas and turn to already established parts of the market. Let’s analyze the market’s potential. Let’s try to look forward. Imagine that you will compete not with Amazon but with a no-fully shaped segment of the market. Sounds like more fun?
You have no doubts that there is potential, correct? Let us take a look at the results of the “FUTURE SHOPPER REPORT 2021” research. Scholars asked customers to define what motivates them to choose another player of e-commerce instead of the usual well-known leader at their location. 46% of users named the lower price list the main reason, 20% chose more convenient delivery options, and 19% said it is about a better or more specialized product range. This statistic is an excellent clue for anyone planning to launch their marketplace.
Second – an actual marketplace is not pure e-commerce
The key advantage of the marketplace lies in making the company omnichannel. Omnichannel is when customers receive the same experience wherever they buy a product. They can select a product online, receive it at the nearest physical store and then return a purchase to the brand corner at a mall. Most people avoid visiting the shopping center and at the same time do not want to wait 2-3 days for the goods to be delivered to the post office. It is easier to use different shopping channels: it is convenient and fast. The selected product, as a rule, is already in stock, and therefore you can pick it up on the day of order.
9 out of 10 consumers choose an omnichannel company. Therefore, it is important to let people choose between channels.
It’s not so easy to implement the concept of omnichannel. First of all, you need to synchronize the IT systems responsible for each channel with each other. Otherwise, there is no connection between the communication channels. As a rule, marketplaces have an advanced IT platform that allows the business to use many channels. Solutions for marketplaces also help manage difficulties with the correct display of the assortment, taking into account the data on the balances of goods in the store, switching between channels, and processing returns. You can avoid these complexities by implementing an omnichannel-enabled automation platform. This will solve the problems with product content management and order processing at different sites.
Third and most fundamental – You shouldn’t rate the marketplace as a separate business unit
Why do businesses need a marketplace? To make clients’ choices better? Yes. To extend the range? Definitely. To break through the traffic ceiling? Sure. And we have more answers depending on our customer’s basic needs they want to meet.
The main benefit of the marketplace lies in its ability to make business flexible, adaptive thus able to survive in rushing globalization. A marketplace is a perfect solution that allows such a large system to embrace maneuver and be able to turn. The lockdown made an ideal demonstration of how important this ability becomes. Look at the winners of the crisis; they could reform. Fashion-retailer started to sell basic foodstuffs. Discounter focused on sports goods for home fitness. In this way, we see that the marketplace is a highly flexible model designed to adapt quickly to rapid market changes.
However, each company should be ripe for creating a marketplace because it is more of a “turbine” for business. If the owner already has a project related to retail, then the marketplace will give him a large influx of traffic, new customers and will also check for the strength of the entire system of processes.
Looking at the marketplace from an “Amazon perspective” hides its strong sides. A marketplace is a platform for interactions between retailers, customers, and other participants, which creates new opportunities, demands, and rules for all of them. That is how we see the key value of this new normal.
Looking ahead, we see the marketplace is becoming a unique ecosystem and a home for a major part of many businesses. The items above are key essentials to be implemented when you launch a marketplace. We would dare to say that the marketplace is the main characteristic of e-commerce 3.0.
- Mike Gingerich
- United States