Online sales prospects have grown dramatically these past few years. No surprise here, as online retail was already on a solid growth trajectory, even before the pandemic. The impact of the virus, with on-again, off-again lockdowns and closed borders dramatically improved ecommerce sales opportunities. In many cases, online ordering became the only viable method for purchasing products, goods, groceries, and prepared food. But is it true that online marketplaces are the new growing trend in digital shopping?
Most readers understand the basics of ecommerce—finding desired goods on the internet, with the ability to order those goods from an online product listing. Ecommerce sites often have product categories, descriptions of goods, pricing, and even customer-generated content, such as reviews and video demos.
Global online marketplaces are sites that aggregate many third-party sellers onto one site. The Amazon marketplace, eBay, Target, Walmart, and various others are examples of such sites. Marketplaces offer customers the opportunity to go to one location on the web to fulfill many of their purchase needs. These sites bring sellers and buyers together, often regarding niche topics (model makers, hand-crafted jewelry, painting, and so on).
A digital marketplace—like brick-and-mortar marketplaces—enables a company owner to expand product variety and client reach without incurring extra inventory risk. This is for the case for merchants that already have ecommerce capabilities with a defined customer base. Marketplace sellers often pay a fee or percent of their sales to the marketplace owner.
The marketplace operator has complete discretion over the brands it brings on board to sell products to the customer base, and what rights they would like them to have once on board. These operators must balance the customer experience and value garnered from third-party operators to create and maintain a compelling site. Marketplace technology is the ideal supplemental income channel for firms looking to test new goods or expand into new markets. This strategy allows companies to keep up with, and eventually outperform, their competitors.
Digital shopping, online marketplaces, and ecommerce at large are the trends that have dominated the business narrative during the COVID era. These trends are expected to continue far past the pandemic years. For example, Digital Commerce 360 uncovered that the top online marketplaces in the world sold $2.67 trillion USD in goods and services in 2020. In terms of gross merchandise value (GMV), the top sites grew almost 100% from 2020 to 2021. Hence the excitement that these sites and business opportunities inspire. In this regard alone, most would agree the answer is 'yes' when posing our original question 'is the future of digital shopping online marketplaces?'
But what must a good marketplace include in its offering? The world's top sites like Amazon, Taobao, TMall, Walmart, and Target already offer their versions of 'the everything store.' As such, new online marketplaces must carve out their niche. In other words, focus on niche market areas, with shoppers who will be loyal to a site offering uncommon goods and services. Today's lessons for success in launching and operating a new digital marketplace are all about focusing on a niche category and catering to this customer group.
This leads to a second consideration: customer service. Provide customer service that compels shoppers to return, repeatedly. This puts an additional onus on the operator to truly curate the third-party sellers allowed onto their market. Chosen well, the other merchants' offerings complement the selected niche offering of the market. Selecting haphazardly erodes the value that shoppers get from the niche marketplace. So, choose your vendors wisely.
Finally, consider the underlying technology for your site. Your site needs to be built on a robust ecommerce platform that can handle peak loads, with a large throughput of orders. Overprovisioning here makes sense. Think carefully about investing in premium systems like Salesforce Commerce Cloud-oriented solutions. Systems like Tealkart Marketplace (the only natively built Salesforce Marketplace) provide a robust full solution for an operator's needs.
For a deeper review of what to consider in a marketplace, read the free guide: Marketplace Fundamentals: A Guide to Building & Running Online Marketplaces. This guide provides you with the basics of what it takes to run such a site.
If you're thinking about firming up your online strategy by expanding to complementary marketplaces, get started now with this free white paper: “Marketplace Fundamentals: A Guide to Building & Running Online Marketplaces”.
Never get into a new sales channel without first setting your key performance indicators (KPIs). KPIs should be agreed upon and presented clearly to all stakeholders so that there can be no disagreement as to whether the marketplace is successful or unsuccessful. Naturally, this means also having clear discussions with your third-party vendors. They should have clear targets for their sales efforts.
As an operator, this is important to ensure your site is growing, and truly providing value to your existing and expanding customer base.
Revenue, sales, reach, and customer happiness are just a few examples of critical key performance indicators to examine. Make sure your selected platform and technology solution is capable of monitoring and demonstrating vendor results tracked against these KPIs.
The speed with which you introduce new features and functionalities is a critical element for the success of your digital shopping online marketplace. Especially important is the speed at which you stand up and get to market with your digital offering. Look for a partner with a track record of success at bringing ecommerce systems live, in weeks—not months.
If you are already using a robust system like the Salesforce CRM within your company, then there is no need to look for other solutions. Expand to the Commerce Cloud environment and bring in the marketplace technology on top of this powerful platform.
Look for a marketplace partner who understands large, advanced marketplace deployments, as well as core marketplace implementations. This gives you the choice of using the right technology for your current deployment. It also gives you peace of mind, knowing that this partner can also expand your offering in the future—as your online marketplace grows. If you are starting from the ground up in digital commerce, you want a partner that can provide you with flexibility and a robust growth path to meet your specific business needs and your shoppers' expectations. Think OSF Digital.