Is Your Retail Business Using Marketplaces? With $1 Trillion Spend by 2020, Should It Be?
Is your company focused on a local market? Do you make use of online market place or avoid them like the plague? There is increasing evidence to suggest that whilst there are significant challenges to the world of online marketplaces, it is a key driver for growth within E-Commerce. With global cross-border spend forecasted to reach $1 trillion by 2020, it seems of paramount importance to widen your consumer net.
Pitney Bowes report that over 66% of consumers have now made cross border purchases. Over 30% now do so once a month. Why is this important? For a start, how many more potential customers would have visibility of your product where no prior consumer relationship existed before? With consumers now wanting to be able to find the best product anywhere, from anywhere, they more and more use the online marketplace. For retailers with ambitions to increase their lot, this opportunity might be too good to miss.
Couple the increased visibility of your product with the not so small benefit of removing the need to invest huge sums into marketing campaigns, consumer trend knowledge collection, seasonal trends understanding, which are less important when selling via marketplaces – it becomes easy to see why 85% of ecommerce transactions in China and 83% in India occur on these platforms. The borrowed authority and trust consumers experience with leading marketplace transfers to your product, levelling the playing field for sure.
That said, when I have spoken to industry leaders, the logistics is of course a key sticking point. How will you deliver the goods? How long will that process take? How will you handle transactions? Will you hold inventory in country? Will you go whole sale model? These are no small matters and are key factors as to why business’ delay or indeed rule out the idea of cross boarder options. As with all success however, there have been clues left by those who have successfully navigated these waters. What can your business learn from the leading players in this regard?
Whilst of course these broad issues do not even scratch the surface as to why to embrace or avoid these platforms, it appears to be an important decision for every retail business. What is your company doing in this area? As always, I would love to hear your feedback.