The Expert view:
How marketplaces help fashion retailers branch out.
By Ian Jindal
29 March 2017
It’s clear to see marketplaces are exploding across the globe with more than half (55 per cent) of US shoppers starting their searches on the Amazon website. Additionally Alibaba, the world’s largest online and mobile commerce company in regards to gross merchandise volume, made total revenues of $15.7 billion in 2016. So, it’s inevitable that every retailer, from small local fashion boutique to global brands, such as Topshop and Diesel, are capitalising on marketplaces such as ASOS to gain a global market.
SMEs, Big Business and the Marketplace
When marketplaces first began online there was a reluctance from big brands to use them to sell their products. This was because major brands felt selling through third-party sites would lead to a loss of control over the way the brand would be presented to potential customers, and a reduction in loyalty would come from consumers being able to swap and change between brands on one site. When previously a consumer would go to one site and buy a head-to-toe outfit from one company, they could now buy shoes from Kurt Geiger, a dress from Karen Millen and a bag from French Connection all on one site.
Inevitably, this was a concern for brands, coupled with a belief that incorporating third-party sites into their selling strategy would result in a loss of data and insight which was gathered through their own websites. Major retailers were avoiding marketplace selling as much as possible.
But, times have changed. Top brands are seeing the benefits SMEs have had selling through marketplaces, being able to expand their businesses from local boutiques only capable of selling a few items to regular customers each week, to selling their products far and wide around the globe.
Big brands started to see how valuable marketplaces are in consumers’ eyes because of their: unparalleled choice, competitive price and convenience. With potential buyers being able to order, and then re-order, products in a single smartphone click anywhere in the world, big brands are finding value on marketplaces.
Brands are starting to open their own branded stores on third-party sites as they make the most of the opportunity to sell to new audiences. US fashion retailer Gap, for example, started to sell on fashion marketplace Zalando as it looked to reach a European audience that didn’t visit its own website in great numbers.
Why do consumers love marketplaces?
In general, marketplaces have attracted consumers due to their ease and efficiency, including a range of purchasing options which largely influence buyer’s purchasing decisions.
Additionally, consumers are finding these platforms more consumer-friendly and tailored to their needs, with marketplaces introducing more ease of use when ordering products, such as Amazon’s one-click reorder button. In the age of fast-paced lives and demand for everything to be done yesterday, it is marketplaces who are winning consumers based on their efficiency.
Therefore, it’s time for retailers to make the leap and engage in marketplaces. By doing so they provide consumers with easier access to merchants’ products. They also allow a wider consumer audience to be exposed to the brand, compared to a company website alone.
Retailers may not gain the insight into customer behaviour that they value, initially, but they’ll gain the contact details for shoppers that they can then target and persuade to shop directly on their own websites, and in their stores. Marketplaces – could be a win-win situation.
Marketplaces, international strategy and latest ecommerce trends are some of the themes that will be addressed in this year’s InternetRetailing Expo, set to unveil the future of the retail nation.
Taking place on 5th and 6th April at the NEC Birmingham, the event will showcase latest innovations, initiatives and technology, as well as world-class speakers from brands such as Alibaba Group, Lululemon, Google, Harrods, LEGO, John Lewis, Volkswagen, Schuh, GAME and Made.com.
Ian Jindal is an experienced multichannel retailer and Editor-in-Chief of InternetRetailing.
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