‘Marketplace’ is a bit of a buzzword in the ecommerce space at the moment, and it’s not hard to see why. One-third of all U.S. business now flows through e-commerce, and 63% of that is through marketplaces. While in the UK, marketplaces currently account for around 40% of total online spend.
Marketplaces are not necessarily replacing traditional ecommerce channels like brick-and-mortar stores, or even websites. Instead, they’ve expanded how retailers connect with customers, increase revenue and deliver data-driven omnichannel experiences.
In this article, we’ll discuss why established ecommerce stores embrace online marketplaces, the common challenges you might face if you decide to adopt a marketplace business model, and how Amplience can support you in delivering content at scale.
Why are traditional ecommerce retailers adopting the marketplace business model?
Low-cost expansion, data-driven omnichannel marketing, and digital-first consumerism are driving the rapid adoption of ecommerce marketplaces. The marketplace business model allows companies to streamline production processes while offering a broader product range, to include third-party merchants as well as the retailer’s own products.
Low-cost expansion
The marketplace business model helps traditional retailers to capture new markets at a fraction of their typical customer acquisition costs.
It provides the core infrastructure for ramping up sales in a new market — such as access to ready-to-buy customers, product visibility, and logistics support. This saves the time and money you would have otherwise spent building your brand presence and business operations from scratch.
Data-driven omnichannel marketing
Despite 56% of ecommerce professionals allocating funds to data and analytics, many retailers still lack the time and resources to track customer behavior across multiple channels.
The marketplace business model allows companies to collect in-app data as shoppers use their platforms, and collate and analyze these data sets into meaningful insights that help you understand how your customers think and act and what influences their purchasing decisions.
With this information, traditional retailers can refine their omnichannel strategies to meet ever-changing customer expectations and drive repeat purchases.
Digital-first consumerism
Since the pandemic, more shoppers have turned to marketplaces for up-to-date product information before placing an order. For example, 63% of customers in the US conduct initial product research on Amazon or compare products and prices on Walmart.com before buying, per a 2020 Catalyst and Kantar survey.
To keep up with this trend, retailers are building their presence on the key marketplaces where their target audience is more likely to search and buy. Amazon alone captures about 3% of all consumer spending, demonstrating the huge opportunity that marketplaces facilitate when it comes to accelerating sales.
The challenge with implementing the marketplace model
To successfully implement the marketplace model, you need a system that delivers content fast and at scale. However, most traditional ecommerce stores rely on legacy content management systems that are too complex and too slow to support agile, reactive content delivery.
Legacy content management systems like WordPress and Drupal are built to deliver content to one channel at a time — usually your website. This means that they cannot support the marketplace business model effectively, or the growth of your ecommerce strategy to deliver content to multiple different channels and platforms. If you want to set up a store on a marketplace while maintaining your own website, you will need a separate CMS.
This setup complicates your content management process quickly. First, it’s almost impossible to deliver the same content experience across all channels, while running on separate legacy content management systems. Due to their complex, monolithic structure, product and content updates take a long time, and don’t allow you to be reactive to market and consumer demands. In addition, you pay more for system maintenance, which will increase business operation costs.
Deliver content at scale with Amplience
As the ecommerce industry evolves, shoppers increasingly prioritize convenience and discovery in their purchasing decisions. Innovative ecommerce stores will increase their visibility on cross-marketing platforms to meet these expectations, and to increase engagement and conversions.
To successfully implement the marketplace business model as part of your ecommerce expansion strategy, you need a content management system that rapidly integrates new channels into your omnichannel workflow, helping you to connect with your customers at every touchpoint in their buying journey. With Amplience’s pre-integrated CMS, DAM and optimized media delivery capability, you can create compelling, multi-channel commerce experiences in one single platform, increasing customer acquisition, and ultimately increasing conversions.
Want to know how Amplience can support your adoption of the marketplace business model? See how Amplience works here.