Marketplaces have become go-to destinations for consumers to browse a vast breadth of products and brands. For many, it’s the first place they go to search for items related to a specific keyword, phrase or trend. In fact, Amazon has officially surpassed Google as the top place where U.S. consumers begin their product searches, according to Jungle Scout.
For this reason alone, marketplaces have become crucial partners for small businesses looking to acquire more customers and expand brand awareness.
“It’s crucial that retailers bake a marketplace strategy into their overall commerce strategy; otherwise, they’re missing out on being the first stop along the path to purchase,” explained Melissa Minkow, Director of Retail Strategy at CI&T in an interview with Retail TouchPoints. “For brands where the name recognition isn’t as high as it could be, marketplaces are a key opportunity for trial.”
And now there are more marketplaces that brands can leverage to get found. Not only can they partner with the big players that are bolstering their services for small businesses (think Amazon, Walmart and Alibaba), they also can collaborate with smaller niche players that align with their unique target audiences and values. But what are the keys to finding the right fit? Marketplace and ecommerce experts offered their detailed best practices for a Retail TouchPoints Special Report. Although there are a total of six best practices that brands should use to build their playbook, the first three steps are foundational for success.
- Conduct customer journey analysis: Because there are many mass and niche marketplaces to sell through, Minkow recommended that brands begin by conducting customer journey work: “I cannot stress enough how important this is when designing a marketplace strategy to bake into an overall commerce strategy,” she said. “The key question to ask is: ‘Where does my customer most often hope and expect to find my brand when initiating their shopping journey?’ Once that data comes back, it will be clear if a mass marketplace or a more targeted entity is the right choice. Most of the time, though, a mass marketplace is likely the right move.”
- Understand the unique operating model of each option: “Each marketplace has its own policies (e.g. data ownership, Service Level Agreements (SLAs), support processes such as product set-up, analytics, fulfillment, customer service and seller requirements such as mandatory promotions, inventory availability and customer reviews,” explained Shannon Warner, a partner in the consumer and retail practice of Kearney, a global strategy and management consulting firm. “Brands need to evaluate whether they’re able and willing to work within that operating model and if they have influence to adjust it if desired.”
- Gauge the breadth of marketing and advertising services available: All marketplaces, both mass and niche, have different retail media and advertising offerings. Kiri Masters, Head of Retail Marketplace Strategy at Acadia, said in an interview with Retail TouchPoints that an increasing number of marketplaces also have brand-building capabilities. These allow sellers to target specific customers and activate campaigns at certain days and times and to specific geographies. Although Amazon was previously the clear leader in this area, more retailers and marketplace destinations have focused on building out their retail media and advertising offerings.
Brands should understand what’s available across channels and use data and analytics to prioritize their investments, according to Warner: “Brands should evaluate their marketing ROI for marketplace ads, other digital advertising tactics and traditional advertising tactics to determine the best marketing mix. Today, most marketplaces provide access to robust data and tools that can help brands to make well-informed decisions. If data and analytics are not available, it’s probably an indicator that the ads are not optimized.”
Once brands get the lay of the land, they have to do more in-depth work to fine-tune their strategy and ensure they’re resonating with marketplace shoppers. Download the Special Report now to learn how you can build upon this solid foundation to maximize your reach.
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