Purchasing behaviors have evolved as a consequence of the health crisis. In 2020, e-commerce sales increased by 140% worldwide[1]. Online shopping is now part of consumers’ daily lives. To align with these new behaviours, retailers must adapt by offering a digital shopping experience that complements their physical stores. And marketplace model seems to be the best suited to meet / to match customer’s expectations.
As a platform for selling products or services online, the marketplace directly connects buyers and sellers, whether they are professionals or individuals. The difference with a classic e-commerce website is that the consumer has access to a multitude of e-merchants in a few clicks on the same online space. Sellers on theses platforms benefits from the marketplace’s web traffic and wide range of customers.
Globally, more than half of all e-commerce sales (62%) were made on marketplaces in 2020[2]. Why such a success? Because this business model meets perfectly the needs of consumers to have an almost unlimited choice of products and brands in one place, at competitive prices and And delivered straight to their doorstep.
This is the promise of the marketplace model in years to come: to enhance the phygital shopping experience through a unified commerce approach.
Towards a unified phygital retail
Habits have changed, so have priorities. Website, mobile application, social selling, connected store, virtual or augmented reality, click-and-collect… Welcome to the phygital era: the perfect combination of physical commerce (retail) and digital commerce (web) to which the marketplace will bring a new dimension. How is this done? By offering customers a platform available 24 hours a day, allowing them to access products and choose the delivery methods that suit them best.
Perfectly integrated in this phygital model, the marketplace combines the best of both worlds: The depth of range of an online catalog along with the proximty and relationship aspect of physical commerce. As a retailer, it’s a unique opportunity to fit all your customer’s needs and become leader in your market. By giving consumers all the products they could be looking for in one place, you reduce the risk of seeing them go somewehere else.
However, to stand out from the crowd and stay ahead of your competitors, you need to offer A seemless end-to-end shopping experience: intuitive and easy to use interface, a wide range of product, multiple delivery options, excellent customer service, etc. These are all necessary requirements to offer vendors the perfect digital extension of their offer.
The more you anticipate, the more you’ll ensure that your offer meets customers expectations and fits with your brand’s DNA. Opening your catalog to new vendors doesn’t imply changing your position, quite the opposite! The marketplace will allow you to develop your business by expanding and completing your portfolio with products that are completely in line with your brand universe.
The marketplace, creator of trends
Launching a marketplace marketplace is part the brand’s phygital strategy. By opening the field of possibilities through an almost unlimited offer of products and services accessible in a few clicks, you will meet the expectations of today’s consumers. But even more than that, you will give a second wind to your business: by expanding your current offer with new products, reaching new customers and develop ing new markets sometimes beyond your borders.
Another plus: you strengthen the links between your brand platform and your physical stores. An order placed online can be picked up (and tried on) in-store for example. Or an option (size, color…) unavailable in store can be ordered directly on your marketplace without having to browse the web to find the right item.
The marketplace then becomes your best asset in a completely disrupted market. The model forces you to listen and be in tune with the expectations of consumers, whose demands in terms of digital experience are constantly increasing.
By giving third-party sellers the opportunity to complete your own product offering, you meet customers need, even further with increased visibility and products range. You also optimize your price positioning by introducing competition into your own ecosystem. In short, you become a leading destination site and a leading brand.
Gone are the days when retailers used to develop their strategy in a reactive fashion, based on their sales history. The marketplace is now causing a profound shift. By referencing an extremely large product catalog,the choice is now on the customers hand, pic khis own products and therefore, create trends. The ability to createand enhance these trends will be key to your marketplace’s success.
The marketplace enriches the shopping experience
The platform model therefore completely redefines the purchasing journey, from an online order to a last mile delivery, which is of paramount importance for customer satisfaction. The product offer is no longer enough to win: 76% of consumers want to be able to track the delivery of their purchases in real time [3].
A requirement that can be difficult to meet for a vendor whose core business is not logistics. Seven out of ten retailers consider the supply chain to be particularly complex, with the routing of a parcel internationally involving more than twenty-five people and two hundred interactions[4]. As a result, 94% of companies do not have full visibility into their entire supply chain[4].
By ensuring end-to-end traceability, regardless of the delivery method chosen by the customer, you have a truly differentiating competitive advantage: 92% of European e-buyers are more inclined to order online if they have a choice of delivery method[5].
A la carte delivery is no longer an option but a key success factor! So make sure you offer the best possible experience. Free delivery, express delivery, drive to store, respect of deadlines, package tracking, return management, etc. are all features to consider to ensure complete customer satisfaction.
The health crisis has marked a turning point in the way we consume and it is becoming urgent for all retailers to start their digital shift. The marketplace offers a unique opportunity to transform with a moderate investment and a business model mainly based on variable costs.
However, if lauching a marketplace opens the way to new era in e-commerce, it also brings many challenges to retailers, such as the need to come up with a global strategy involving all stakeholders – marketing, vendors, offer range, financial cash flows, etc – and above all your employees.
A lasting and sustainable tranformation of the way commerce will be possible only with the commitment of all retail stakeholder!
[1] According to the report «2020, the year of ecommerce», Wix, December 2020.
[2] Digital Commerce 360, march 2021.
[3] Selligent Marketing Cloud global study on «Consumers and brands, what the pandemic has changed»,september 2020.
[4] GEODIS unveils its 2017 Supply Chain Worldwide survey
[5] According to DPDgroup E-shopper Barometer 2018 study, conducted by Kantar TNS in 21 European countries.
