Marketplaces have gradually evolved into search engines. Consumers and business buyers now tend to start their product search at one of the larger marketplaces. Allowing external vendors to their platforms has been a very lucrative step for marketplaces. Popular marketplaces such as bol.com, Amazon, Zalando, Helloprint, Beslist, and the Belgian company Vanden Borre have a very high level of returning visitors. This has made them an attractive venue for other retailers to sell their products.
Of course, an important argument for entering a marketplace is the extra sales volume it will generate. Although the market place's commission on each sale will reduce the margin, many retailers are attracted by the extra turnover. Many brands also use a marketplace to reinforce customer loyalty. Without a brand presence, customers are more likely to switch to a competitor. Of course, some companies are convinced that they need to put all their energy and resources into their own channels. We prefer to see the two as complementary: a marketplace is a valuable addition to a company's own online store.
Certain questions to ask in advance
- Which products are suitable for marketplace selling? Generic products that are also offered by many competitors are particularly difficult to sell without huge price reductions or a big advertising budget. It is therefore important to carry out extensive market research to determine what you can use to compete as a retailer.
- Extensive keyword research is a must in that regard. For instance, three-quarters of Amazon searches do not include a brand name. Consumers tend to start their search by entering 'men's jacket’ rather than 'The North Face jacket’. If such a search term is already saturated, it is a good idea to look at the chances of long-tail keywords. A key phrase such as 'men's waterproof jacket' may be a little less popular, but if it has less competition, it may be interesting to focus on this slightly longer option.
- Which marketplaces are interesting? Many marketplaces offer a wide range of products to consumers, but a growing number of B2B marketplaces are now emerging as well. Adobe calculated that 70% of business buyers do extensive preliminary research. Gartner is expecting a radical shift: the majority of new marketplaces will soon be aimed at the business market. These will also be complementary to companies' own channels. Of course, manufacturers can also develop a strategy for the business market and adopt a direct-to-consumer (D2C) model.
- As a retailer, how will you handle the logistics? The question is whether your own logistics infrastructure can cope with the rise in customer demand. If not, various marketplaces provide fulfilment services to guarantee the customer service level. Now that consumers are becoming ever more demanding, this has become an even more important argument. For example, next-day delivery is now a standard that marketplaces can easily provide.
Working on customer experience
Many retailers feel it is important to keep the customer experience on the marketplace in line with their own online store or other sales channels. Product information is an important aspect of this. Many vendors rely on Master Data Management (MDM) or more specific Product Information Management (PIM) software. Both solutions bring together data from different systems and make sure that each item's record is as complete as possible. A combination of supplier and product information, characteristics, visual materials and so on is then published on the various channels, such as a marketplace and web store.
This enables the retailer to lay the right foundations for online findability and competitiveness. A manufacturer rarely provides a complete set of data, so the product information must be enriched in a central location to offer added value over the competition. This requires the right product descriptions, facts and characteristics, but the visual materials are just as important. The traditional product view is often complemented by an exploded view or 3-D model. The retailer uses these to offer added value that boosts conversion and reduces the number of returns.
An MDM or PIM system helps the retailer to update marketplaces with the right information. An online marketplace management tool such as ChannelEngine allows the exchange of information to be fully automated so that you can manage the pricing strategy, stock, and fulfilment. The challenge is that each marketplace has its own requirements. Every marketplace has a specific internal structure (for example the categorization) and data consistency (for example the color names). A marketplace management tool automatically converts the data to ensure that you always meet the requirements, your customers will find you and you will meet your own customer experience standards within each channel.
Think about keyword research and listing optimization
Compared with your own web store, most marketplaces offer relatively few opportunities to make your brand really stand out. Fortunately, big players such as Amazon and bol.com are steadily expanding their brand page options. This gives the retailer the opportunity to start a mini-store within the store with room for distinctive content and product information.
The visible product information will always be fairly concise, so it is all the more important to pay a great deal of attention to keyword research and listing optimization. Keyword research reveals which keywords will convert at a high rate. Based on this, you can adjust your product information and consistently use the right terminology in titles and product descriptions. Also remember to draw on the previous customer reviews in this regard. If many customer reviews refer to specific product features or benefits, it is obviously advisable to include these in your communication. The retailer can use A/B testing to continue to optimize the listings' findability and conversion ratio.
No complacency after a product launch
The first few weeks after the go-live, which Amazon refers to as the honeymoon period, are particularly decisive here. You can make most ranking progress during that period. It is important to generate as much traction as possible at that time: resources such as pay-per-click campaigns (PPC), couponing, and giveaways will encourage your visibility in the short term. Activating customers to leave reviews will also contribute to your reliability and final positioning. There is a reason why marketplaces such as Amazon offer to send customers reminders to leave a review for a fee. Every extra star is worth its weight in gold.
Marketplaces have not only evolved into search engines. They have also become objective product and business comparison tools. You need a good product, convincing product information, fast delivery and customer service on the marketplace itself to persuade your customers to buy and return. You therefore need to optimize your process, findability, and conversion with a PIM/MDM system and marketplace management tool to make sure you don't miss the boat.
This blog was originally published in Dutch in EMERCE, click here to read.