Last week, we heard from Mirakl partners on their 2020 predictions for B2C eCommerce. This week, we turn to marketplaces.
Whether you’re a retailer, manufacturer or distributor, the online marketplace model empowers businesses to gain a competitive advantage. In B2B eCommerce in particular, marketplaces offer agility, empowering players to manage not only their customers and their competition, but also their direct and indirect channels.
Our second set of predictions comes from McFadyen Digital, LiveArea, and Gorilla Group, three firms with expertise in both B2C and B2B commerce. Fittingly, they focus on marketplace trends across both categories.
Brands are becoming retailers. Retailers are becoming brands.
Tom McFadyen, CEO, McFadyen Digital
Marketplaces are enabling brands to sell director to consumer.
Marketplaces are enabling retailers to extend their brands.
More brands are starting to sell direct-to-consumer (DTC), either by selling on marketplaces or creating their own marketplace. A brand selling on a marketplace streamlines their value chain by disintermediating resellers & distributors, and by controlling their product messaging and pricing. The brand benefits from improved margins, additional customer insights and better brand control.
Brands can also sell DTC by creating their own specialized marketplace to “own” their segment or to enable resellers. Hewlett Packard Enterprise is just one example of a brand that leverages Mirakl to sell to customers (usually B2B customers) and also enable partners to complete the sale.
With marketplaces, retailers gain extensive real-time data about trending, profitable categories and products which can be leveraged to create private label brands. For example, AmazonBasics has over 1,300 category-leading products.
The common factor enabling these transformations of retailers and brands is the marketplace platform.
Momentum builds for B2B marketplace technology
Chris Hogue, Head of Strategy & Product, LiveArea
We see increasing momentum in B2B as more companies go to market with flexible, much more robust commerce platforms – including technology that support B2B marketplaces. Today companies are deploying websites that behave on par with some of the best consumer websites and that can compete with Amazon. B2Bs are looking to deliver greater value to customers and more personalized experiences, including assistance finding products, seeing stock levels, accessing tiered pricing, getting visibility into lead times, and setting up complex delivery schedules. The fact is that experience matters more now than it ever has in B2B. Buyers expect seamless interactions and this trend will continue to accelerate.
But the biggest headwind in B2B is the emergence of marketplaces. There are public marketplaces like eBay and Amazon. Social media-related marketplaces – Facebook and Instagram – are also looking for a seat at the table. They are getting into B2B in a big way. The days of forcing customers to log into archaic, homegrown systems are gone. Choice is key. As a result, companies need a robust digital strategy. Not all customers interact in one channel, so B2Bs must be proactive about building direct or “owned” channels. With the growth in marketplace transactions and searches, a digital program is incomplete without a marketplace presence.
Emergence of curated marketplaces
Randy Kohl, Head of Marketing, Gorilla Group
Owned experiences are more important than they have ever been for businesses. A greater effort needs to be made to avoid counterfeit merchandise and ensure that customer’s expectations are being met. Trust must be established prior to earning a purchase and Amazon’s inability to police its sellers and provide authentic products to its customers exposes a flaw that other brands and retailers can exploit.
In 2017, Nike started a pilot program with Amazon to sell their products in an effort to limit the sale of counterfeit items through third-party sellers. Two years later, Nike has made the decision to stop the pilot program. In a statement, the company said: “as part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail”. Nike was under the impression that partnering with Amazon would help eradicate unauthentic third-party sellers but found that was not the case. For every seller of counterfeit merchandise booted from Amazon’s marketplace, another took its place. Often, authentic Nike products ranked worse on product pages than the fakes.
This recent split creates a compelling opportunity for brands: Curated Marketplaces. Brand manufacturers can begin creating their own curated marketplaces, with their existing eCommerce properties, to build the direct relationships necessary to further facilitate trust between businesses and consumers. Brands that share similar ideologies and audiences can band together and create co-retailing marketplaces, which will offer consumers authentic, personalized experiences, while at the same time eliminate third parties and potential counterfeit items.
For example, imagine Nike, Fitbit, and Hydroflask creating shared storefronts, each promoting the other’s products. This also allows brands to attract customers that otherwise might not have shopped at an individual brand site in the past. The partnership between Nike and Amazon resulted in playing a game of whack-a-mole with counterfeits and ended up not being a good fit overall. It makes sense to create a curated marketplace based on complementary relationships, not competitors.
Co-retailing can work just as well in the B2B realm, providing an alternative to the distributor/wholesaler model. If businesses are able to find complementary relationships and create a curated marketplace, this could result in huge alliances that could upend the traditional incumbent marketplace and retail channels.
The ever-expanding marketplace opportunity
Retailers use marketplaces to expand their assortment and offer an “endless aisle” online, delivering more of what their customers want. As these predictions show, however, the marketplace model beyond B2C retail. Manufacturers, distributors and procurement providers make up a fast-growing percentage of Mirakl’s new customers – a clear sign of the flexibility and agility of the marketplace model across verticals.
There’s no question that this momentum will continue into 2020 – and our partners are here to offer their expertise and support.
Written by Art Boyd
VP Global Partner Sales & Alliances, Mirakl