Ecommerce retailer Online4Baby has taken another big step forward on its growth journey by rebranding and refreshing its website to emphasise its credentials as a caring yet rebellious disruptor fighting on the side of parents.
Online4Baby’s brand overhaul features a new logo, a ‘Power to Parents’ strapline and a new colour palette, while improvements to the website make it more mobile friendly and give it a more premium appearance.
The overhaul is already paying dividends, with year-on-year conversion rates up 64 per cent in the first two weeks since the launch. Sales have increased by 12 per cent year-on-year and the average order value is up by seven per cent.
The project is the latest phase of a multi-million pound investment programme to effect a digital transformation for the business.
Online4Baby sells a vast array of nursery and baby items directly to consumers across the UK. Its product lines range from prams, buggies and car seats to cots, high chairs, nursery furniture, baby walkers, swings and playpens.
It sells leading brands such as Joie, Graco and Cybex and has its own brands, Puggle and 4Baby.
The website has been re-designed to provide a more premium appearance and a better user experience, with a strong mobile-first emphasis
Managing director Christy Foster said: “Most of our sales come through mobile devices, to it’s important to get the design of the website right for smaller screens.
“Research shows how important visual content is when buying online, and therefore we have overhauled how products are displayed so shoppers can always see the product from all angles.”
Other features of the new look and feel for the brand include:
A new strapline of ‘Power to Parents’ as part of a strategy to position Online4Baby as a caring company with a rebellious streak – the ‘revolutionary’ fighting the good fight for parents;
A new logo which incorporates an exclamation mark in the number 4;
A brighter tone of voice, with a punchy new colour palette of cookie cream, candy pink, yellow and blue;
New graphics such as a banner, a flag, a placard and a megaphone – which are all items associated with revolution and rebellion.
Christy said: “Our mission is to bring Power to Parents through exceptional customer service and quality products. We’re building a community where parents from all backgrounds can share their experiences and find support from other parents. Online4Baby is their trusted, one-stop destination for all things baby.
“We aim to be the number one destination for high-quality nursery goods, all sourced by a team whose decades of experience and knowledge enable us to constantly evolve our offering to keep pace with changing consumer tastes and needs.
“Our goal is to ensure that we can be counted on to give our customers a helping hand at a time of great change in their lives, giving them one less thing to worry about when they bring new life into the world.
“We are extremely pleased with our new brand identity and website. They have been well-received by customers, judging by the feedback we have had as well as the improved conversion, revenue and average order value rates we have seen.”
Christy added: “This new brand identity gives us a strong platform for further growth but without losing our human, personal qualities. Customers will always be able to find a real person at the end of the line or over live chat, with product experts on hand to help demystify the world of nursery and baby products.”
Online4Baby, which has its headquarters in Oldham, hopes its investment will also help it achieve greater penetration of target market segments such as parents-to-be and grandparents, as well as reinforcing its standing among new parents.
As part of its digital transformation, the retailer has focused on increasing its number of followers on social media such as Facebook and Instagram, and last year launched a TikTok channel which is attracting over 1.2m monthly views.
Online4Baby has seen revenues surge from £11m in 2018 to £45m in 2021, and aims to reach £100m within three years.
New research from Digital River delves into online spending habits, payment trends, and what consumers now demand from online retailers
Digital River, an experienced global commerce enabler for established and fast-growing brands, has revealed how the cost-of-living crisis has affected UK consumer habits. The new research, conducted by Opinium, explores how UK residents’ finances and general spending have changed over the past six months.
eCommerce remains resilient
When surveyed, over one in six (17%) adults stated that they are struggling financially and more than a third (35%) are just ‘getting by’, yet surprisingly, this was found to have a minimal impact on their willingness to shop online. Only 8% of respondents said that they were looking to shop more in person, with over a fifth (22%) expecting to shop online more frequently in future.
With online retail remaining strong, in-person shopping looks likely to suffer the most with people tightening their budgets. A third (33%) of respondents have shopped online more frequently in the past six months, compared to just 9% that have shopped in-store more often.
Although 58% of UK adults have reduced their spending on non-essential items in the last six months, nearly half (47%) continue to make at least one online transaction a week.
Price comparison and payment flexibility play critical role
A critical factor is the resilience of eCommerce lies in lower prices and an ability to track and compare price changes. Almost three tenths (29%) of UK online shoppers state that it is easier to track prices online than in person, while 29% of those planning to shop online more claim that items being cheaper online is driving them to buy this way.
Additionally, payment methods have evolved to meet demand. Now, 15% of UK adults use buy now-pay later (BNPL) services for online shopping, with over half (59%) doing so to stretch their budget further. Two thirds of BNPL users have used this payment method more in the past six months, with half (49%) saying this is due to their tighter financial situation. Credit card use has remained steady in comparison, with 60% using this method the same amount as usual.
Time for retailers to step up
Although online shopping remains strong, 41% of online shoppers state that online purchases would be among the first things to cut if they needed to reduce their spending. With the cost-of-living crisis set to continue indefinitely, retailers need to be competitive and look for ways to help their consumers.
Half of UK online shoppers (50%) say they want more help from retailers to deal with rising prices. 32% cite delivery pricing as a barrier to online shopping and almost half (48%) state that free or cheaper delivery would offer the most help with the cost of living. Respondents also pointed to more online vouchers (38%) and easier price comparison (31%) as ways for retailers to step up to the plate.
“We’ve seen how inflation has impacted our economy: consumers told us they are decreasing their spending across the board, most notably on special occasions, including holiday shopping and vacations,” said Ted Rogers, Chief Revenue Officer at Digital River.
“However, our research has shown the pace of online spending isn’t expected to slow down despite the squeeze on finances. Brands must ensure they have optimized their digital stores to make the shopping journey as transparent and friction-free as possible, making sure consumers aren’t surprised by any extra costs.”
To learn more about how Digital River can help you meet evolving consumer demands, please visit here.
About Digital River
With more than 25 years’ experience, Digital River has mastered global commerce. An industry disrupter from the start, our Global Seller Services simplify global commerce expansion, enabling companies of all sizes to grow their revenue in 240+ markets worldwide. Global Seller Services combines payments, tax, fraud, compliance and logistics into a single integrated and flexible API based solution helping brands increase conversions, turning browsers into buyers across the world or around the corner. The chosen partner of thousands of brands across the Americas, Europe and Asia. Digital River is global commerce simplified.
Digital River is headquartered in Minneapolis with offices across the U.S., Asia, Europe and South America. For more details, visit DigitalRiver.com.
Digital River is a registered trademark of Digital River, Inc. All other company and product names are trademarks, registrations or copyrights of their respective owners.
The unpredictability of global economies, rising inflation pressures and the continued disruption of supply chains is making it difficult for retailers to predict performance this year. However, due to the rise in ecommerce, sellers in one country are no longer constrained to only reaching local consumers.
Tony Preedy, managing director of Fruugo, shares his advice on how independent sellers can adapt to changes in the market and remain competitive in unpredictable economic climates, making the most of cross-border selling:
“The last few years have been especially tough for retailers and, in the current cost-of-living crisis, sellers are facing a new wave of challenges. Market unpredictability will continue to impact retailers’ performance into the foreseeable future, but those who are effectively capitalising on cross-border ecommerce will have more opportunities to thrive.
“For example, while shopping around seasonal trends has declined, purchasing products related to cultural media phenomena has skyrocketed, with trends that occur in one country spreading rapidly around the world. These shifts in demand for goods can take place anywhere at any time, so it pays for retailers to keep abreast of what is popular to their target customers in order to capitalise on the opportunities they provide.
“With this in mind, a successful cross-border ecommerce strategy relies on agility and availability – regardless of where the consumer or the seller is located. This means localising sales and marketing, and rapidly synchronising inventory with search engines to be able to attract consumers to the right products.
“The challenges over the last few years have also highlighted the danger of only having one digital platform or route to market. For independent retailers to take advantage of cross-border transactions, they need to focus on generating more reach and visibility for their products by increasing the number of marketplaces where their product range can be discovered and purchased. Diversifying channels to market also helps to reduce the risks associated with being dependent on one.
“With the right support and tools, cross-border ecommerce can boost retailers’ growth in turnover and profits – if they go beyond a focus on domestic shoppers and tap into global demand for their products. Working with online marketplaces, sellers can connect with customers around the world at zero risk to themselves and jump on trends that are spreading throughout multiple regions.”
BetterCommerce, a leader in the provision of composable and headless ecommerce solutions for mid-market retailers and brands has announced a strategic partnership with AdYogi, a leading multichannel marketing agency with multi-disciplinary expertise across Google, Facebook and Instagram, underpinned by cutting-edge technology to accelerate sales.
The global partnership will support BetterCommerce customers in both India and in the UK, by working with a leading performance marketing agency whose expertise is in delivering personalized ads with automated prospecting, retargeting and cross-selling.
AdYogi, headquartered in Gurgaon, India, will work closely with the BetterCommerce team as a consultant partner to deliver unique and seamless customer experiences across all sales touchpoints for D2C brands looking for more flexible, headless and composable commerce architectures. With BetterCommerce’s current modular-based ecommerce proposition, the partnership will help retailers and D2C brands build unique offerings for their end customers both online and offline.
By partnering with BetterCommerce, AdYogi gains access to a composable and headless commerce platform that powers some of the top Indian and UK brands today. With BetterCommerce’s composable approach, AdYogi customers will be able to re-platform or optimize their business use cases at the speed they choose. BetterCommerce brings flexibility, agility and speed to businesses who want to innovate and upgrade their brand’s image with a modern, headless commerce solution. AdYogi has previously worked with brands including: The House of Rare, Kaff and Dr. Vaidya’s.
Rohin Mittal, Co-Founder, AdYogi, said: “We are very excited about this new partnership with BetterCommerce, who are the perfect headless eCommerce partner for AdYogi. We advocate headless eCommerce to our clients and their ability to offer flexibility as a strategy is incredibly well-suited to our approach to achieve faster growth with rapid deployments. Our partnership will combine a best in breed growth strategy through the combination of BetterCommerce’s technology and AdYogi’s Growth Platform.”
Vipul Aggarwal, Chief Revenue Officer, BetterCommerce, commented: “We’re committed to positively impacting the mid-market segment. Scaling up a business after meeting the initial threshold is challenging and it not only requires growth marketing but also enterprise grade technology and operational efficiencies, which BetterCommerce is committed to bring to the Indian and UK D2C eco-system.”
One the major partnership benefits is the creation of bespoke commerce solutions for large enterprises who want to invest in technology but refrain from hiring a huge IT team or do not want to work with multiple vendors that create fragmented solutions. By combining growth marketing and modern ecommerce technology AdYogi and BetterCommerce are determined to address this core issue for mid-market retailers and brands.
61% of US and UK consumers say seeing visual user-generated content (UGC) from other customers can reduce the growing number of fashion ecommerce returns which is hitting retailers’ profitability and sustainability goals. And around half of consumers now accept that returning online fashion purchases is bad for the environment
NEW YORK and LONDON (July 14, 2022) – 61%[1] of consumers questioned in a new poll think fashion retailers can cut rapidly rising ecommerce product return rates by including more post-purchase photos and videos from other customers—to help shoppers see how clothes look on ‘real’ people, not just models. 59% say virtual try-on tech that allows shoppers to picture themselves in outfits they find online will also help to rein back returns.
The findings come from a survey of just over 2,000 US and UK consumers commissioned by Nosto, the Commerce Experience Platform, which is used by fashion brands such as Patagonia, Paul Smith, Pangaia, and Todd Snyder.
The new research coincides with rising returns volumes reportedly hurting the profitability of online fashion brands such as ASOS and Boohoo. In the US, average ecommerce return rates jumped to 20.8% in 2021 with an estimated $671 billion worth of goods being returned.
Escalating ecommerce returns reduce profits by hiking up retailers’ delivery and warehousing spend (increasing costs by as much as 21% of a product’s order value). And there’s also the problem that returned inventory negatively impacts the environment, with annual carbon dioxide emissions from transporting returned goods in the US estimated to equate to having 3 million more cars on the road.
Fashion retail brands are also increasingly conscious that performing poorly on sustainability and protecting the environment can damage their credibility. Recently, several brands including H&M stopped using a tool that tries to measure the sustainability of garments over concerns about greenwashing.
Importantly, respondents to Nosto’s survey were more than twice as likely to agree that returns are bad for the environment than disagree (49% v 17%[2]) on the basis that returns waste fuel, packaging and other resources.
“Polished, studio imagery has been the default way to show clothes off on ecommerce stores. But supplementing this with customers’ own imagery gives shoppers a more accurate reflection of how products are worn in everyday situations, and by ‘everyday people’ who also own the items,” says Damien Mahoney, Chief Strategy Officer of Nosto.
“That’s why fashion retailers are leveraging customers’ visual UGC on their websites, such as the post-purchase selfies they encourage customers to share on Instagram. The savviest retailers are also encouraging their customers to comment on the likes of products’ fit or share their measurements within captions, so others can make comparisons that better inform purchase decisions and therefore lessen returns.”
Separate research conducted last year by Stackla, the visual UGC platform (now a part of Nosto) indicates that consumers are very happy to let fashion retailers use their post purchase selfies – 58% would give permission to a brand to use images of their fashion purchases as part of their marketing.
Alongside using more UGC, nearly half (49%) of consumers questioned in Nosto’s survey agreed that charging customers for returns—or stopping free returns, as Zara has started doing recently—can stem the flow of products fashion shoppers send back by making them think more carefully about whether they’re going to keep a product before they place an order.
And the research suggests that retailers must continue to pay close attention to some of the more basic tactics to help keep returns down. This includes taking steps to ensure online information is clear, accurate and detailed (66%), orders are not damaged before being sent and that correct items are packed (also 66%).
Read more insights from Nosto’s research on the company blog article. These are the initial findings from a broader survey on consumer attitudes to sustainability in fashion retail which will be released by Nosto later in 2022.
[1] Respondents were asked if they Strongly agree, Somewhat agree, Neither agree nor disagree, Somewhat disagree, Strongly disagree with a list of statements. Almost throughout the press release ‘Strongly agree’ and ‘Somewhat agree’ answers have been added together when referring to results.
[2] Combining 17% of respondents who answered ‘Somewhat disagree’ or ‘Strongly disagree’ to the following: I believe that returning fashion products purchased online is bad for the environment because it uses up fuel, packaging and other resources
Written by Nick Watson, VP Client Success EMEA, Cheetah Digital
Whether due to the rise of e-commerce, the disruptions of the pandemic or other factors specific to a given industry, the old patterns of consumer behaviour no longer hold true in the current marketplace. According to Cheetah Digital’s recently published 2022 Digital Consumer Trends Index, even the 76% of UK consumers who define themselves as loyal to certain brands say they’d still buy from competitors if it was cheaper or more convenient to do so. In this article, we take a look at the most critical consumer facts and statistics that are changing the way we approach customer loyalty today.
Today’s consumers are highly opportunistic. And why wouldn’t they be? Thanks to advancements in technology, they have all the tools to act on better offers or easier fulfillment options at their fingertips.
What’s more, modern consumers are also highly protective of their data and how it’s used. And they expect the brands they do business with to reflect their values. However, even that doesn’t guarantee that they’ll pledge their loyalty.
The results of Cheetah Digital’s recently published ‘2022 Digital Consumer Trends Index’ highlight some eye-opening stats affecting customer loyalty today.
Habit vs Loyalty
70% — the percentage of UK consumers who frequently buy from the same company, yet say they’re not necessarily loyal to the company
Are your repeat customers loyal, or simply habitual? People are creatures of habit and tend to stick with what they know and trust in the absence of any compelling reason to do otherwise.
Oftentimes, brands will mistake habit for loyalty. But the two are definitely not synonymous: habits are developed, whereas loyalty is earned.
In fact, 70% of UK consumers who frequently buy from the same company say they’re not necessarily loyal to the company. Our report also indicates that 76% of UK consumers who define themselves as loyal to certain brands say they’d still buy from competitors if it was cheaper or more convenient to do so.
Emotional and genuine loyalty is an outcome. It’s a goal that can only be achieved by truly knowing and understanding your customers. And that comes from carefully nurturing every relationship you have. That means, every action, input and communication a customer receives needs to make them feel valued and respected.
Product vs Trust
110% — The YoY increase in consumers citing “the ability to understand me as an individual” as a factor of brand loyalty
There are many factors that drive brand loyalty. However, the one that beats them all is the recognition of the individual. There’s been a 110% YoY (year-on-year) increase in consumers citing “the ability to understand me as an individual” as a factor of brand loyalty.
The other drivers of loyalty are fairly simple and probably ones you already know, like great product or service (55%), great customer service (38%), useful loyalty program (34%) and convenient to use (31%).
This rise in conscientious consumerism, where customers proactively educate themselves on a brand’s corporate, ethical and environmental values, is also a burgeoning loyalty driver with staying power.
Of course, investments in those areas will ensure a long-term return and will help you differentiate from competitors. But there comes a point when a product can only be so good or so cheap. Eventually, there needs to be another level of effort to keep consumers loyal once all of the other factors equalise.
That’s where relationships come in. It’s vital to understand how consumers feel not just about the product they bought, but the experience they had when they bought it, including who they bought it from.
Customer Acquisition vs Retention
40% — The percentage of consumers who would remain loyal to brands that provided extra value other than product or price (a 67% YoY increase)
When it comes to loyalty, the cheapest price point isn’t everything. Brands who foster loyalty do so by creating emotive bonds, fostering community and recognising the customer as an individual.
Marketing departments are continuously working to envision new and interesting ways to keep their customers engaged, retained and loyal in a world full of infinite choices. In this new era, where the consumer is digitally savvier than ever, traditional loyalty programs just won’t cut it. They’re too transactional, stale and ineffective at significantly changing consumers’ perceptions and behaviours.
In fact, just over a third of UK consumers (35%) say they’re not loyal to any given brand because the brand did nothing to encourage their loyalty, even though they’re frequent shoppers. Brands need to do better than that. And they can by offering more to remain in consumers’ good graces.
Things UK consumers say brands can offer in exchange for their loyalty:
Recognition
Rewards Points
Exclusive/Early Access
Personalised Recommendations
Discounts
Contests
Community Features
Few companies would argue against the value of loyal customers. But far too many are spinning their wheels trying to nurture customer loyalty, using outdated and ineffective tactics. Fresh data on the rapidly changing mindset of today’s consumer is critical to ensure an effective strategy 100% of the time.
These stats are just the tip of the iceberg. Deep dive into more research, analysis and insights on customer loyalty today by downloading your copy of Cheetah Digital’s 2022 Digital Consumer Trends Index here.
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About Cheetah Digital
Cheetah Digital is a cross-channel customer engagement solution provider for the modern marketer. The Cheetah Digital Customer Engagement Suite enables marketers to create personalised experiences, cross-channel messaging, and loyalty strategies, underpinned by an engagement data platform that can scale to meet the changing demands of today’s consumer. Many of the world’s best brands, including Starbucks, Hilton, The White Company, Levi’s, and Williams-Sonoma trust Cheetah Digital to help them drive revenue, build lasting customer relationships, and deliver a unique value exchange throughout the customer lifecycle. To learn more, visit www.cheetahdigital.com.
With eCommerce now the dominant channel for retail, consumer expectations surrounding cost, choice and convenience are at an all-time high. 2022 research from PFS showed over half (56%) of consumers are most likely to purchase leisure/non-essential items online, and this is not changing. Consumers of all generations have become very digitally-savvy, and marketplaces such as Amazon – with the availability of one-click and same-day delivery offerings – are setting the stakes higher than before. In fact, PFS findings has also revealed that 54% of consumers today prefer to have a variety of delivery options, with free delivery/shipping making up the ultimate shopping experience for 66% of consumers. Never has the retail landscape been so competitive, with many shoppers turning their backs on retailers if their ideal online experience isn’t fulfilled.
By operating online, brands are already on the right track for keeping customers satisfied. 42% of respondents agree they receive a more personalised experience online than in stores, as they receive benefits such as personalised recommendations, sizing predictions – which continues to be a key differentiator.
Here we explore how retailers can use big data and the areas it can be leveraged to drive growth online.
Big data and real-time inventory management
One of the most impactful cases for big data is its ability to transform inventory management – reducing costs and improving efficiency whilst increasing customer satisfaction. With industry shortages taking their toll on the retail supply chain and effective stock management, being able to anticipate customer needs and forecast demand has never been more important. With customers growing increasingly fickle, an out-of-stock item can be enough to not only miss out on a sale to a competitor now, but potentially lose out on a future customer.
Real-time inventory management systems work in conjunction with big data to provide retailers with the ability to not only track but notify retailers of stock volumes – something that is crucial when maintaining customer loyalty. Monitoring stock levels in this way and ensuring that new product is ordered accordingly, not only avoids the risk of disappointing customers and losing sales, but also creates the opportunity to spot purchasing trends. This is particularly important during periods of peak trading and seasonal holidays such as Christmas, Valentine’s Day, and the summer (especially when it comes to sportswear), to ensure adequate preparation and inform decisions made around promotions.
By combining data gathered from purchases and searches made on the site, retailers can create a clearer picture of what items are in high demand, and therefore which items and stock-keeping units (SKUs) they should reorder. Insights into sizes and other variations of the products can be particularly helpful and provides retailers with the opportunity to maximise sales and profit margins by cutting their losses on any items that aren’t performing well and ensuring ample stock of those that are. Operating this way can reduce costs regarding warehouse and logistics costs, reducing the amount of stock held and possibly reducing returns.
Digging deeper into the supply chain, big data can also provide brands with transparency around where product shipments may be lagging, and potential bottlenecks occurring. Such information, when passed on to the customer can be extremely effective. Customers appreciate being kept informed, and the more detail and personalisation brands can provide, the better.
Leveraging data to inform and transform business processes
By using these insights, retailers can improve their current operation, including which delivery options to provide, subscription, free delivery, as well as return processes.
There is a wealth of information that can be gathered from returns forms and other feedback streams, including contact centre engagements and even social media posts – the fulfilment operation can even inform the customer service function, if under one roof. Doing this will create a subliminal message with customers that their needs are being acknowledged, and efforts made to meet these.
Using big data, online brands can also add a layer of protection against payment fraud and strengthen other cybersecurity practices – protecting themselves and customers. By enabling real-time detection, analysis and collecting information based on previous purchases, retailers can trace repeat patterns to discern between legitimate and suspicious transactions.
A data-driven future
There is no denying that consumers expect more from brands than ever before. With 20% of customers admitting to not feeling any emotional connection to any retailer at all, those operating in the eCommerce space should be placing loyalty and the strategies needed to harness it at the forefront of everything they do – using real-time big data to establish better relationships with their customers. With multiple delivery options and offering sophisticated personalisation services named as top priorities for today’s convenience-craving customer, implementation of these is essential to ensure loyalty is maintained.
If your business extensively uses barcode scanners, you shouldn’t be too surprised to see either a Zebra or Motorola logo feature on any of these devices you wield. That’s because, in recent years, both brands have been prominent in making barcode scanners.
How can you keep on top of software updates for Zebra scanners?
Here, the term ‘Zebra scanners’ can include Motorola scanners, too — as, today, those devices still in line for software updates will be supported by Zebra. Even if any particular Zebra or Motorola barcode scanner you own has been discontinued, it might still be supported today.
As a result of subscribing to the Zebra Evolution Update, you can receive quarterly notifications on firmware updates as well as bug fixes. However, there are two different means through which you can have software tweaks delivered to your scanners.
You could update barcode scanners via your PC
Enhancements to your scanners’ onboard software can be made available through two distinct routes. One is Zebra’s 123Scan utility, the PC-based configuration tool that enables Zebra scanners to be set up quickly and easily.
You might be long past the setup stage for your own Zebra scanners, but also not have realised how much 123Scan simplifies the process of updating their firmware, too. From the Zebra website, 123Scan can be downloaded for 32- and 64-bit versions of Windows 10.
Another advantage of having this application installed is that it would be able to show you release notes for the latest updates supporting Zebra scanners.
Zebra barcode scanners can also be updated remotely
It goes without saying that updating multiple barcode scanners over a wired connection to a PC could feel somewhat time-consuming. If your business has many different Zebra scanners in use, it would be convenient if you were able to update their firmware remotely.
Fortunately, you could do exactly that by drawing upon either Scanner Management Service (SMS) for Windows or Scanner Management Solution (SMS) for Linux.
For a computer running either Windows or Linux, the relevant SMS version can be downloaded via the Zebra website. Both SMS tools are examples of the various remote management applications that can be used for managing Zebra barcode scanners from a distance.
What if you are still struggling to update your Zebra scanners?
Have you found yourself repeatedly trying and failing to get the latest updates onto a Zebra scanner, even though you can’t figure out what you are doing wrong? The real culprit could potentially be some kind of fault deep within the unit’s enclosure.
If this does turn out to be the problem, you obviously wouldn’t want that scanner to be out of action for too long. Fortunately, the right Motorola scanner repair service could get your device fixed and then back to you within days — enabling you to limit the impact to your workforce and return to the job of installing a steady stream of software updates.
According to Marketplace Pulse, in 2021, Amazon generated $390 billion GMV (Gross Merchandise Volume) through third-party sales, compared to $220 billion selling directly to customers. This is a staggering amount and illustrates the power of a marketplace.
As enterprises look towards their post-pandemic future, they are asking how their businesses should evolve. The commercial landscape they are trading within has also changed. Consumer expectations have expanded. Retailers have witnessed these changes accelerating for several years. Focusing on your own business, products, and customers, offering a marketplace experience could lead to increased market share, superb customer experiences and a platform that can be adapted as your business changes.
Branwell Moffat
What is a digital marketplace?
It can sometimes be hard to distinguish between an online retailer and a marketplace. Amazon has somewhat blurred this line where they sell and deliver their own inventory. They also hold and deliver other sellers’ inventory; and sell other retailers’ products which the seller then delivers directly to the customer.
Like many terms within e-commerce, there isn’t an official definition of a digital marketplace, but you can easily view it as an e-commerce website that allows multiple third-party merchants to sell their products or services through it.
This may be open and relatively uncontrolled, such as eBay, where almost anyone can create a store and start selling, or curated, such as Zalando, where a seller must be vetted or invited to sell through the platform so that the marketplace operator can dictate which brands are sold through it.
Crucially, marketplaces are not restricted to retail. Brands selling to other businesses can benefit from building a digital marketplace too. For example, Amazon Business is expected to generate an annual GMV (Gross Merchandise Value) of over $50 billion by the end of 2023. In addition, the way businesses purchase digitally is evolving – arguably faster than retail. Therefore, B2B brands can potentially generate substantial growth through digital marketplaces.
Marketplaces put customer needs at their heart. Customers want a frictionless buying experience. If they can find all the items they need in one place, this is a significant differentiator and will lead to increased levels of loyalty and advocacy. Long-term customer spending can be massively enhanced with a marketplace, but only if the marketplace is constructed on well-defined foundations.
Why your business should build a marketplace
While the pandemic caused a massive increase in online revenue for many businesses, we now see that growth falter. As a result, companies must work increasingly hard to gain or maintain market share.
Many brands with established digital platforms are now looking at building marketplace capability into their e-commerce websites to enable them to scale quickly, appeal to more customers and increase their AOV (Average Order Values).
The business case for building a marketplace is to evolve your existing e-commerce platform and sell a carefully curated group of products your customers would appreciate being able to buy in one place.
While there are multiple reasons why a business may look to build a digital marketplace, there are some that apply to almost every business, no matter their industry or market sector:
1. Expanding your range
A key driver for building a marketplace is to quickly and easily expand the range of products your business sells digitally without the typical cost and effort of sourcing, stocking, and delivering those products.
Consider the example of a bed retailer with both physical stores and a good-sized e-commerce business along with an existing and established supply chain for beds and mattresses.
Several product lines, such as bedroom furniture or home accessories, are naturally complementary to the products they already sell, but the effort and cost involved in sourcing, purchasing, manufacturing, and stocking these products are very high.
They also will be constrained by the size of their stores and, therefore, may be unable to display the additional product lines. However, if that retailer adds marketplace capability into their digital offering, they could sell these products to their customers with a lot less effort, cost, and risk. This approach has many examples of retailers doubling their product range overnight.
2. Test new product ranges
Launching a new product line can be an expensive business for a brand and fraught with risk. For many reasons, the brand may not be able to sell the product at an acceptable margin and could be left with inventory that they struggle to sell.
Testing new product lines through a digital marketplace is a way to reduce potential risks. Also, using the marketplace approach can also reduce the investment needed. If the tests are successful, the brand is much more likely to invest in selling that product line directly themselves as they have proven that they can sell at an acceptable margin.
3. Drive traffic to website and stores
By offering an expanded product range, a retailer will have the opportunity to drive more traffic to both their website and physical stores. For example, suppose a customer visits a retailer’s website to purchase a third-party marketplace product. In that case, the retailer has the opportunity to sell additional products to that customer, including those that it sells directly. In addition, one of the great benefits of click and collect is that it often involves the customer visiting a retailer’s physical store. So, again, this represents an opportunity for the retailer to sell additional products or services to the customer.
4. Complementary services
Marketplaces are not just about products. There is often an opportunity to sell complementary services to customers, but this may be challenging for a business to do directly. These could be services such as installation, insurance, training, and many others. While the brand may not make as much margin on the service as they would if they provided the service themselves, they could offer the services to customers without the significant investment and risk required to provide the service themselves.
Change is hard but can be rewarding
While marketplaces offer a great deal of opportunity to some brands, building a marketplace (as opposed to selling through an established marketplace) is a more significant challenge but one that could ultimately transform your business.
Building a marketplace for your e-commerce business is not just a technical IT project but can also involve making fundamental changes to your business processes.
Like any business initiative, doing it badly or half-heartedly can be very costly. Therefore, a strategic approach to a new marketplace deployment is essential. Taking the time to understand the mechanics of your marketplace and how this will integrate into your existing business is critical to ensuring the development of your marketplace platform is successful.
Building a digital marketplace involves a fundamental change to the way a brand engages with its customers. The way products or services are delivered or supported will change as it is common for third-party sellers to provide and help the products and services themselves. As a business and brand, you will need to consider whether or not to allow sellers to offer competing products and, if so, how these are presented to the customers.
The brand also needs to recruit, support, and manage its third-party sellers – a ‘build it and they will come approach is bound to fail. Managing sellers is vitally important as poor service from a seller can cause damage to the marketplace operator’s brand. It is also likely that sellers will provide data for the products they sell. Again, the marketplace operator will need to carefully manage this, especially if multiple sellers offer the same products.
To succeed, the marketplace operator should consider building a dedicated team, including marketplace managers, merchandisers, and seller account managers. The development of a digital marketplace can be expensive and will not achieve the potential return on investment if it is not managed effectively.
The future of digital marketplaces
Over the last year, we have started to see a race toward marketplaces emerge. At KPS, we are engaged in multiple digital marketplace projects.
Many are now investing in marketplaces in areas where it is becoming increasingly challenging for brands to gain market share, improve KPIs such as AOV and conversion rates. In some instances, we have seen the top two retailers in a specific market race to launch a digital marketplace before the other through the fear of being the one left behind.
This potential is illustrated in the recent valuation of marketplace technology leader Mirakl. In September 2021, Mirakl completed a round of funding that valued the company at $3.5 billion (up from $1.5 billion the year before). Mirakl technology supports over 300 marketplaces, many of which are businesses that sell to other companies. This valuation illustrates the vast opportunity within this area.
While building a digital marketplace is not suitable for every brand, there is a significant opportunity for many enterprises to radically evolve their current e-commerce platform. The rewards can be enormous if the implementation and required business change are managed well.
Get in touch to see how your company could take advantage of a marketplace and discover how KPS can support your business through every stage of its marketplace design and implementation.
As ecommerce continues to evolve at rapid pace, it is only businesses that react now and adopt a MACH approach to website development that will be able to deliver the levels of multi-channel experience that customers of tomorrow will come to expect as standard. Others, in the meantime, will be left behind. This was the stark message from customer experience expert, Tim McMillen, ahead of a MACH Adoption Bootcamp taking place at London’s Shard on 6th or 7th July.
“Retailers, manufacturers and FMCG businesses should be aware that MACH transformation is not straightforward and cannot happen overnight”, McMillen continued. “Its adoption, however, is the only way forward to achieve a truly agile and scalable digital capability that can facilitate the rate of change and experience innovation that businesses will need in order to keep up.”
MACH stands for Microservices based, API-first, Cloud-native SaaS and Headless, and underlines the key components of a development architecture that enables organisations the agility to update and rollout new features at pace.
It’s an approach that has seen global retail giants such as Amazon steal a march on the competition in recent years with the ability to continuously update and improve services, but it is now widely seen as the future of successful ecommerce innovation for all types of business.
“Thanks to the development of this architecture in recent years, it’s now possible to place the experiential element of ecommerce ahead of the technology requirements, and this opens up fantastic opportunities,” McMillen said. “Our Bootcamp will be offering insights into exactly what this means for customer experiences of the future, and how you can get there.”
Designed to help businesses unlock the full potential of their online sales channels, the MACH Adoption Bootcamp is aimed at IT, ecommerce and digital decision makers. It will provide interactive sessions to demonstrate the adoption measures required for MACH, as well as share insights on how to futureproof digital operations by reimagining customer experiences in a way that other technology architectures cannot.
McMillen, founding director at Profound, the award winning experience design agency hosting the event, will be joined by a team of digital experts in presenting sessions on how to set your business up for success, proven strategies for navigating MACH, what the new experience opportunity for customers looks like, and how to measure its impact on your business.
