Seizing ecommerce opportunities in a bustling environment
An e-Commerce Marketing Director's view on Marketplace sales and Market Expansion
By Orla Power, Marketing Director at Luzern eCommerce, as seen in EcommerceAge
Described as a goliath, ecommerce sales are expected to reach an eye-watering 5.4 trillion by 2026. Even with its continued upwards trajectory, attracting, acquiring, and retaining customers it has never been fiercer. Brands are finding it increasingly difficult to develop and manage an ecommerce site that can drive sales, achieve high customer return rates, and consistently deliver a profit. However, amid the increasingly crowded ecommerce landscape, there is a massive reservoir of opportunity just waiting to be exploited – marketplaces.
In the last two years, sales from marketplaces accounted for 62% of global ecommerce revenue and grew by 29% – five percentage points higher than overall ecommerce growth. While selling on multiple marketplaces gives brands a broader range of opportunities to reach and convert customers, promote specific products, and create new offerings that can be used as competitor differentiators, the transition to marketplaces and market expansion is not without its inherent challenges.
Considerations for marketplace sales
In the age of total commerce, adapting to the competitive omnichannel landscape is the most pressing challenge facing ecommerce brands. This new environment has required brands to shift their approach and accelerate plans to expand into multiple marketplaces, as well as new markets. Developing a marketplace presence isn’t as straightforward as one would hope. There are several factors that brands need to consider before taking the leap. For instance…do you know which marketplaces will attract your target buyers? Do you have the resources to successfully manage multiple marketplaces? What logistics and delivery model(s) are right for your brand? How can you gain competitive advantage and still reach margin goals? How will you keep customers engaged without losing control of the marketplace?
While not an exhaustive list, there are other factors that are equally as important. Brands looking to move to marketplaces need to know and understand the quality of the back-end processes. This will ensure that the front-end – from marketplace to the branded storefront – is always up to date and well stocked. Further, brands selling across multiple marketplaces need to ensure compliance with the rules for order processing and product formatting. Finally, an in-depth understanding of the marketplaces’ key operating metrics such as average ticket, conversion rate, number of sellers, number of SKUs, and the fees and/or commissions charged is critical.
Achieve 10x growth with proven ecommerce strategies
Among marketplaces, competition for the buyer’s attention is fierce, making it crucial for brands to properly manage their online presence so they can deliver exemplary customer experiences. The crowded playing field has made standing out and rising above the competition a key factor to achieve marketplace success. This means that brands need to embrace proven ecommerce strategies, including adapting to changing customer demands, using resources and budget to achieve digital transformation, building and retaining brand trust, expanding into international markets, and having the right people and partnerships in place.
Customers can be uncompromising, impatient, and disloyal, making it a priority for brands to not only reach and convert prospects but deliver an exceptional experience – down to ease of returns. Doing this requires brands to elevate their value proposition beyond simply displaying products and prices online. Successful marketplace brands go the extra step to ensure the end-to-end customer journey provides a personalised and seamless experience. This commitment to excellence not only ensures customers receive the best value for money spent, it also helps build brand trust that turns shoppers into loyal customers.
While expanding across borders can be lucrative, it comes with its own set of challenges such as cultural nuances, localised regulations, taxes, currency considerations, and data compliance. Even with these issues, 80 per cent of retailers worldwide agree that cross border trade has been profitable or that sellers have successfully increased sales by as much as 1,000 per cent after expanding their marketplace presence. A study, conducted by Luzern, found that 75 per cent of respondents determined that adopting a more global approach to selling is an important shift in their business strategy. Getting to this point, however, requires brands to localise online sites for language and payment options, as well as be culturally appropriate. Additionally, back-end localisation is critical to support ‘in-country’ transactions.
While marketplaces provide additional channels to market to sell products and services, achieving 10x growth in this crowded and complex environment requires brands to make the most of their online presence by selling on the right marketplaces, handling logistics, fulfilment, and inventory with precision, expanding internationally in the most efficient and profitable manner, and ensuring customers consistently receive a seamless purchasing journey. Digitally native resources and an experienced ecommerce partner make it possible for brands to not only successfully implement growth strategies but help to accelerate their marketplace presence for long-term success.
ABOUT LUZERN ECOMMERCE
Luzern eCommerce helps brands grow their eCommerce businesses—across platforms and channels which include Amazon, webstores, social media and other marketplaces. With Luzern eCommerce, your brand can meet buyers where they like to shop. We excel at the execution end of eCommerce, bringing speed and agility to ensure fast time to value for the businesses we service.
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