Fast shipping, the vast selection of products, and high-quality customer service add to consumers’ growing attraction to online retail marketplaces, our analyst Sky Canaves said. “If there are any issues with the order, for example, there’s a trusted intermediary between the buyer and seller, which is why consumers may often feel that they have greater trust in marketplaces,” she said.
Next year, US retail sales on marketplaces will reach $516.48 billion, accounting for 39.1% of US ecommerce overall, according to our May 2024 forecast. However, for brands to seize the increasing importance of marketplaces, they’ll face heated competition, intricate operations, and a need for more defined business goals.
The proliferation of marketplaces makes it harder for brands to optimize sales across channels and reach consumers effectively, Canaves said. Even though Amazon will claim 70.1% of US retail marketplace sales this year, per our July 2024 forecast, newer disruptors including Shein and Temu have shaken up the landscape, giving brands even more avenues to sell.
The solution: Each marketplace has its own rules for product listings, different fulfillment processes, and varying advertising opportunities, which is why Canaves says so many brands lean on third-party partners. Ecommerce accelerator companies can help establish your presence on marketplaces and manage everything from inventory planning to retail media advertising.
“Amazon Prime’s features have shaped consumers’ expectations in a lot of ways,” Canaves said. Consumers are not only accustomed to fast deliveries and flexible returns, but also a seamless experience with the product they receive.
The solution: To reduce the risk of an unsatisfied customer, which can reflect poorly on both the retailer and the brand, brands should improve product listings with more accurate descriptions, sizing information, photography, and more so there aren’t any surprises upon receiving the item. Generative AI can help tailor product listings to the marketplace, especially if resources are limited, by emphasizing value on discount retailers or displaying more relevant photos on specialty retailers, for example.
“Brands have to consider what their objectives are in marketplace participation,” Canaves said. For example, nearly three-quarters (71%) of retailers in North America believe a benefit of selling products through a marketplace is access to a wider customer base, per November 2023 data by Retail Touchpoints.
The solution: Whether brands are turning to marketplaces for exposure, fulfillment support, or a boost during the holidays, it’s important to define these objectives. From there, brands can make informed decisions on their marketplace strategy, including product distribution (for example, making only top-selling items available to capture consumers’ attention).
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